WAYNE SWAN MP
MEMBER FOR LILLEY
ACTU CONGRESS, BRISBANE
WEDNESDAY, 18 JULY 2018
SUBJECTS: enterprise bargaining; trickledown economics; workplace relations; CEO salaries; company tax cuts; minimum wage; Fair Work Act; immigration.
SALLY MCMANUS: Australia needs a pay rise. Australians deserve a pay rise. And we’re not going to get that pay rise unless working people have a stronger voice at work, stronger rights to bargain. At the moment, we’ve got a situation where there’s record-low wage growth, yet we’re seeing company profits continue to soar. Productivity has gone up, but our wages haven’t. There’s a break in our wages system and we’ve got a serious structural problem. And Australians will not get a pay rise, we will not fix this basic problem, we will not get a fair go unless we ensure that working people get the voice they need to win those pay rises. And that means we need a change to our bargaining laws. That means that working people need the same rights that nearly every other country has, that workers in the OECD have. And that is to bargain on a sector basis, not just on an enterprise basis.
That means that working people will be able to band together across a sector – so an occupation, like childcare workers, like in the manufacturing industry – so that they can set fair prices for the work they do. It’s not reasonable to say that working people in small workplaces should bargain at an enterprise level and expect that wages are going to go up in a fair way.
In countries that do have sector bargaining, there is less wage inequality and there is less unemployment. It’s actually good for the economy that we have that type of wages system. And the reason why we need to change from the system that we’ve had for the last 25 years is because our economy has changed. The world has changed around us, and we need to change with the world. So the ACTU today says, out of our Congress, all unions are united to go out and fight for Australians to get the pay rises they deserve. We want to bring back a fair go, and we can’t have a fair go unless we have a fair system. Thanks very much.
WAYNE SWAN, MEMBER FOR LILLEY: Thanks Sally, I just wanted to say a few words. I had the privilege of speaking to the Conference this morning and to talk about how inequality in this country is growing and how inequality in this country is not only a handbrake on economic growth, but it’s not good for the future of this country and relationships as well.
The truth is that extreme trickledown policies such as huge tax cuts for the wealthy and powerful companies, deregulation in key parts of the economy, hacking into the social safety net, cutting back on health and education, and wage suppression is not only bad for equity, it’s bad for living standards across the board.
If you make your society more unfair, if you give the most to a few at the top and the least to the people at the bottom what you really do is tank economic growth and make your economy less fair, and you create an outlook which is much more pessimistic for the future.
So we need to have an inclusive approach to economic growth and fairly share the growth in our economy. We need to do that through a progressive income tax system, through a fair industrial relations system where workers have some bargaining power, and through investment in health and education.
But you can’t have a prosperous economy when you have stagnate wage growth and where you’ve got a government bearing down on unions and handcuffing their ability to actually bargain for decent wages in our society. You cannot have a prosperous economy if you are reducing the amount of money going to working and middle class people, which is precisely the outcome that we get from the extreme trickledown policies of the Turnbull Government.
JOURNALIST: Mr Swan, the rules that we’ve got now around workplace relations – they’re rules that were written by the Labor Party. So why aren’t they working?
SWAN: Certainly there were rules that we brought in when we abolished WorkChoices. The truth is that capital has decoupled from the community. The behaviour of employers within the bargaining system itself is not in good faith on many occasions, and there are plenty of examples of that, that Sally can take you through. So we do need to look at the bargaining system. People are opting out of it; employers are withdrawing. Workers are being forced back to the bare minimum wages. So there is a need to rewrite the rules when it comes to bargaining. But it’s not just bargaining in the wage system. It’s the power that large companies and groups within our society are using to rewrite the rules of our whole economy – making our tax system more unfair is part and parcel of that equation.
JOURNALIST: In today’s globalised world, what’s to stop companies from just taking their capital elsewhere if we have these kinds of high prices or bargaining system?
SWAN: Well I’ve heard this argument a lot, but capital keeps investing in Australia because we’re a fantastic place to invest! Investors come here for the quality of our people, because we’ve taken the money and resources and invested it in education and training. They come here because we’re a large economy – the 12th or 13th largest economy in the world. We are an economy that people come to because they can do business, the rule of law is there and we have invested in human and physical capital. That’s why they come here. This ugly race to the bottom when it comes to tax is bad for the global economy and bad for this country.
JOURNALIST: Domino’s CEO Don Meij earned, I think it’s $36 million last year. Do you think Australian CEO pay is too high for what they deliver to shareholders?
SWAN: Unquestionably too high, and that’s what the report yesterday showed. It’s the highest it’s been since prior to the Global Financial Crisis, when it got out of control. So think about that for a moment. Ten years on this year from the Global Financial Crisis, when executive pay was completely out of control, and part of the reason for the collapse of the global economy, we are back to the point where executive pay is higher than it was then. So those numbers you saw are a disgrace. And what we need to see is fundamental change to the rules of how executive pay are set. And I said in my speech here today that one thing that should be considered is that shareholders should take an active role and decide on maximum limits for executive pay in the companies that they purport to govern.
JOURNALIST: Sally, your unions and industry super funds are shareholders in some of these companies; can we expect some kind of action on that, in that respect?
MCMANUS: Well of course that will be up to individual trustees to make the best decisions on behalf of their members, but I do know that many of those trustees have raised many times the fact that you’ve got to ensure that you’ve got within your company ethical standards. And when you’ve got a situation like at Domino’s, where they’ve also engaged in wages theft and are rewarding the CEO who’s been part of an operation that’s breaking our laws, that that’s not the type of business model that they would support.
SWAN: It’s this sort of hypocrisy that makes people sick in the stomach. Here we have a CEO that is earning the equivalent of 600 times an average employee, and the company at the same time has had examples of wage theft.
JOURNALIST: Sally, can I ask a question about the minimum wage, which is slightly different from the bargaining side – what changes is the ACTU looking at? You’re actually calling, I think, for the return of an arbitrated national minimum wage case, heard by a Commission. Can you explain what you’re after?
MCMANUS: At the moment we’ve got a minimum wages system, where there’s a panel of experts – mainly economists – who make decisions according to a whole shopping list of issues. And on that shopping list, only one of those issues is what workers need in order to survive. So what ends up happening is that panel has to tick every box in order to deliver their decision. We’re not saying that a new system shouldn’t consider what’s important for the economy, because that affects workers as well. What we want is a primacy put on the basic principle that no one should work full-time and live in poverty. So we want those rules rewritten so that the Commission there considers the evidence before them and brings the minimum wage in line with a living wage. So we would like the Commission to make a decision based on the evidence before them, on what is needed in order to ensure a working person, who’s working full-time, isn’t living in poverty.
JOURNALIST: What do you think that wage is?
MCMANUS: In OECD countries it’s a pretty common thing now to tie it to 60 per cent of the median wage – for us, that’d be around $42,000 a year. A current minimum wage is only $37,000 a year. You cannot live on $37,000 a year, not even in our regional towns, let alone in any of our capital cities.
JOURNALIST: So of the considerations that the Commission has taken now, there’s six and only one of which is the needs of the low-paid. You’re saying that’s got to be really up-front?
MCMANUS: Absolutely. And not just the needs of the low-paid; we want the principle to be that the Commission needs to set a minimum wage so that workers working full-time won’t live in poverty.
JOURNALIST: You mentioned making it easier to take strike action and so on – what kind of changes are the practical changes that we’re going to see to bargaining rules under your system?
MCMANUS: Well I didn’t mention that; what I did mention was that workers should be given other options than enterprise based bargaining in order to have the bargaining power that they need in order to get pay increases, in order to reflect what is happening in their industry. For example, today we had an announcement about more job losses in one of the big banks and we see what’s happening at the Royal Commission. Why should not the finance workers at the big four banks be able to say, we’re going to bargain an agreement for the big four banks that will set the pay and conditions for those workers to get rid of the system of performance-based pay which has led to a whole lot of the terrible circumstances which you have seen at the Royal Commission. Why should not they be able to do that? Where they’ve left to be pitted against each other, you have this system where none of the big four banks move away from that type of pay system, because they’re competing against the other bank. So if you move to a proper system, of set to base bargaining which is totally normal around the OECD, with really no exceptions, we would see that workers would have more bargaining power. Now with that, of course, would come the issue of industrial action. What we are saying is this – the trade union movement of Australia knows we’ve been at our best where workers have been more free, but also where we’ve had a strong and fair independent umpire. We don’t want to see an outbreak of strikes, we want to see an outbreak of pay rises – that’s what we want to see. We want to see the independent umpire being an activist one that intervenes when needed so we don’t see any damaging action against workers or against the economy either. We want to see them play more of a role in bargaining to ensure that everyone plays fair.
JOURNALIST: Mr Swan, was there a reason the media was locked out of Mr Shorten’s speech to the Congress Dinner last night?
SWAN: I’m not aware of any of those arrangements.
JOURNALIST: Would there be a reason why? In previous years I understand they’ve always been allowed in?
SWAN: Look I was completely unaware of what you’re talking about.
JOURNALIST: Can you explain what we are seeing in the US economy? Like are we seeing wage growth independent of the kind of interventions that you are talking about?
SWAN: No we’re not. I mean the United States in an interesting example of what we’ve all been talking about here. Essentially a very large corporate tax cut has been given; it has not gone to investment, it has not gone to increase wages, it’s all gone to share buybacks, dividends and executive salaries. And there’s a reason for that, because if you an economy which has high levels of inequality, then the most fundamental thing you need to drive your economy is strong demand but, if you suppress the wages of your workforce, and you have high levels of underemployment, it’s very hard for working people through their unions to progress decent wage rises because there’s so much slack in the labour market. This agenda for tax cuts for wealthy corporations doesn’t drive investment into the jobs Malcolm Turnbull and Donald Trump claim. It’s a farce, it’s a fiction, it doesn’t work, and it’s simply an excuse for wealth and income concentration at the top of the economy and suppression of wages for working people.
JOURNALIST: But how are they claiming that wages have gone up?
SWAN: Well they’re not. I can refer you to any number of reports that wages have not been going up in the United States. In one or two companies they have claimed they have gone up because they have progressed with some increases which were already in the pipeline before the tax cuts. Some however have claimed wage rises for one off bonuses that they’ve given, as if a one off bonus is a substitute for an enduring wage rise over the years.
JOURNALIST: You talked about rewriting the Fair Work Act in your speech; what specifically would the Labor Government change about the Fair Work Act?
SWAN: Well our leadership in the Parliament, our Shadow Ministry and Bill Shorten are talking constructively with the Union Movement about the nature of those changes and when they’ve reached their decisions they’ll announce them. You might have noted that Mr Shorten made an announcement in Brisbane yesterday about labour hire, that’s entirely appropriate, and there’ll be more announcements to come from the parliamentary leadership.
JOURNALIST: Mr Swan, as the National Labor Party President, how do you feel about the media being locked out— [inaudible] But it’s a fair question though—
SWAN: The question is – I’m unaware of what you’re saying so I’ve got nothing to say about it.
JOURNALIST: Well let me tell you what it is; they were locked out of the dinner last night—
SWAN: Well that’s what you’re saying—
JOURNALIST: —something that they’ve been allowed into in previous years; as the Party President, what’s your reaction to that?
SWAN: I back my leader all the way.
JOURNALIST: Immigration has often been cited as a depressant on wages; what’s the Labor Party and the union movement’s view on the immigration number?
MCMANUS: We support maintaining the permanent migration numbers that we have. Migration has led to prosperity for our country. It has what we see as a big problem, which is the number of temporary work visas that are currently been issued. So around one in ten workers are now on a temporary work visa. That means that those workers are hyper-insecure. And that’s why we see them being so badly exploited. That’s why we see not just wage theft, but really serious slave-like conditions in a whole lot of industries which are happening right under Peter Dutton’s nose. And we think that’s abhorrent, but also of course when that happens, it drives down wages for everyone. Because those workers – it’s not just that they’re casual – they can have their visas cancelled and sent home if they complain about things. So we want to see a reform to our temporary visa system so that we don’t see that type of exploitation. But also so we have fair balance, because there’s a whole lot of industries where there’s actually not genuine skills shortages, and there’s a whole lot of places in our country where young people can’t get jobs, especially in regional Australia, where the temporary visa system is being used, and I think it’s being used inappropriately.
JOURNALIST: Can I just get your view on what’s happening in Victoria between the UFU and the CFMEU. As a sort of leader in the union movement, do you have a role to step in and calm things down in Victoria a little bit?
MCMANUS: I’m unware of what you’re talking about.
JOURNALIST: Between Peter Marshall and Adem Somyurek?
MCMANUS: This is an ALP issue, isn’t it?
JOURNALIST: Well, they’re union— Peter Marshall is a union secretary.
MCMANUS: I don’t have any involvement at all with that.
JOURNALIST: Just to be clear, you’re ok with the media being locked out of the dinner, and the lack of transparency—
SWAN: I don’t understand your question and the premise of it. I support my leader.
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Authorised by Noah Carroll, ALP, Canberra