Transcript - Sky News PM Agenda



SUBJECT/S: ACTU Congress, Inequality, Industrial Relations, Executive Remuneration

DAVID SPEERS: Wayne Swan thanks for your time this afternoon. I just want to go through some of the ideas you've raised at this speech here today, starting with giving workers more power to negotiate better wages and a greater say in our economy. What specifically are you talking about?

WAYNE SWAN: Well firstly at the moment we've got record high underemployment and we've got record low wage growth and to me that reflects the fact that the workforce is not having a say and doesn't have a stake in our economic growth. And as a consequence our economy is weaker. The Reserve Bank governor has said so and I think the Treasurer has even admitted so as well.

SPEERS: Well you're right, we've got basically no wages growth, no real wages growth.

SWAN: The worst since the 1950s.

SPEERS: Easy to say we can fix that, but harder to do it - how do we fix that?

SWAN: Well firstly we need to strengthen the voice of the work force in the economy and also within companies.

SPEERS: You're talking about giving workers a seat at the board table?

SWAN: Too right. Definitely a seat at the board table but a stronger voice for workers. I think they deserve a seat at the RBA table as well. I don't think that the voice of working people is heard in our corporate boardrooms and in fact I'd characterise our boardrooms as having the blindness of affluence. They don't mix or readily relate to the needs of their workforce let alone the general population. Well we need to make those boards more broadly representative of the population to start with.

SPEERS: So it would be a union representative sitting at the board table or some other worker?

SWAN: It could be, but it doesn't necessarily have to be a union representative. The unions represent the workers but workers having a voice is something that's broader than just the union movement - a very important part of it, but broader as well.

SPEERS: And the idea would be, that representative would push the case more strongly for wages?

SWAN: Well I think the common sense of everyday people at the boardroom table seems to be lacking in a lot of corporate decisions that I see. I think it's a reflection that boards need to be not as preoccupied with their bottom line and more preoccupied with the community in which they work and earn their profit.

SPEERS: And is that something government can do? Require somehow perhaps through the tax system that companies do this?

SWAN: Well I think you know the blowout in executive pay illustrates the problem some of the packages that are there are simply obscene; now that can be solved by government legislation and I'm in favour of tougher legislation, but it can also be solved by better commercial and community practice at the boardroom table in the first place.

SPEERS: Well there's a couple of things that you're talking about the Buffet Rule which Bill Shorten and Chris Bowen have said no to but you think it's still something Labor should be looking at?

SWAN: I think it should be on the table and I think we share the common objective of making sure that higher income earners actually pay the marginal rate of tax that is there, rather than using a whole set of artificial means to deflate their effective tax rates far lower than their marginal tax rates.

SPEERS: But then getting back to how workers should be represented at the board table government should somehow require that, force that?

SWAN: Well I think we can take action in terms of corporate law but I think we need a broader debate about not only the ethics of our business community but how representative they are of the community more generally. I mean the other day even the Reserve Bank governor said that low wage growth was a challenge for the economy and he'd like to see wage increases and the head of the BCA said "not now, thanks". Despite the fact that profitability, the profit share of the economy is at record highs and the wage share of the economy is at record lows.

SPEERS: When we talk about executive salary I mean the Buffett rule may be one way of ensuring that they do pay a certain amount of tax...

SWAN: Or we could deny tax deductibility to certain levels of executive salaries. There's a whole series of actions that need to be taken.

SPEERS: Just on that idea, so when anyone earning over say, a million dollars a year, they can't deduct anything? Negative gearing, any expenses?

SWAN: One thing that has brought the corporate community into complete disrespect in the public is the obscene executive packages that are out there. Now we legislated a two strike rule when we were in government maybe that should be a one strike rule.

SPEERS: Explain that to me.

SWAN: What that means is that the shareholders can vote down with one strike or two strikes an executive package.

SPEERS: If it was a one strike rule workers would say no good and then it just can't happen?

SWAN: Then there could be a spill of the board.

SPEERS: Workers or shareholders?

SWAN: Shareholders.

SPEERS: Right ok. What about workers?

SWAN: Well workers don't get a vote.

SPEERS: Should they get a say in executive salaries?

SWAN: Well perhaps.

SPEERS: We do work, operate, in a global marketplace as you know some would argue that this is only going to mean we get the second rate executives in Australia if we go down this path.

SWAN: Well I think a lot of people would argue we don't necessarily have the top rate executives now. I think there needs to be a broader debate. I mean if you take a company like Germany where it's absolutely normal for the work force to be integrated and much more involved in corporate decision making - it hasn't hurt them. But more broadly what we're seeing here is a set of arrangements and economic outcomes where the voice of the workforce has been suppressed and the voice of corporate Australia carries the day all of the time.

SPEERS: You're just back from the United States where amongst others you met with Bernie Sanders. You are putting forward ideas that do sound similar to the sort of things Bernie Sanders campaigned for last year in the United States - is this the approach you think Labor should be taking?

SWAN: I think anyone who has watched what I've had to say about these matters since 2012 will know that I've been talking about a lot of them for a long period of time. But the truth is the public are fed up, absolutely fed up, with the growing inequality of wealth and income and its distribution not only overseas, but in this country and particularly that that inequality has begun to accelerate and it's now manifested in record low wage growth and record high profits share.

SPEERS: But politically are you saying that the way to success for Labor is to champion these sorts of issues?

SWAN: Well the way for success for Labor is to have a set of policies which produce a strongly growing economy which produce full employment and produce a fair distribution of wealth and income for all. We're not getting that now.

SPEERS: Well Wayne Swan we'll see where it goes. Thank you very much for joining us.

SWAN: Thank you