Interview with Alan Jones, Radio 2GB

  • Leader of the Government in the Senate
  • Minister for Employment
  • Minister Assisting the Prime Minister for the Public Service
  • Senator for Tasmania

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SUBJECTS: Penalty rates, Productivity Commission review of the Fair Work Act, apprentices, Fair Work Commission, 457 visas, Individual Flexibility Arrangements.

ALAN JONESThree stories come together at the beginning of the week and many of them, the issues here dominate your correspondence to me. On Friday, employers were demanding the Abbott Government introduce legislation to make it easier for businesses to cut penalty rates, saying that companies were growing increasingly impatient with the slow pace of workplace policy change. That's in my correspondence every day.

The Australian Industry Group Chief Executive – they represent stacks of businesses across Australia – Innes Willox called on Joe Hockey on Friday to release the terms of reference for the Productivity Commission inquiry into the Fair Work Act, saying the window for reform is narrowing. He's urging the Coalition under its legislation to scrap the, quote “modern awards objective” – that's the Gillard stuff in the Fair Work Act which protects penalty rates.

Now, remember the background to this is that Gillard won the Prime Ministership with the backing of the union movement. She stayed in the Prime Ministership, when she was hopelessly unpopular, with the backing of the union movement and so she delivered what the union movement wanted. She introduced changes to industrial relations in this country where penalty rates, overtime, shift-work loading and public holiday pay had to be quote, “definite, formal considerations of the Fair Work Commission”, unquote.

In other words, when the Fair Work Commission is setting award rates and conditions of employment, it must – not may – must have definite, formal consideration of penalty rates, overtime, shift work and public-holiday pay. Now, as this bloke, Innes Willox, the Australian Industry Group chief executive – as I said, representing a stack of businesses – said, we're talking about the fast food industry, the retail industry, the restaurant industry.

He said many of these employers struggle to keep their doors open because of the level of penalty rates at the relevant awards. And he said, correctly, in many cases the employees who work at the weekend in these industries are young people who are not available to work during the week due to study commitments and would be happy with the rate of pay which applies on weekdays. He said a high proportion of employees get their first job in the fast food, retail or restaurant industry, regardless of what industry they end up building their careers in.

Now, remember I spoke last week about the total drop-off in apprenticeships and, in particular, the issue of bricklayers and that there are literally hundreds and hundreds of apprenticeships available out there and no one to fill them. So the employment situation is ridiculous. The minimum rate for Australian workers – hourly rate – is the highest in the developed world.

You've got to say this slowly, here, $16.37 an hour, United States, $7.10, the UK, $9.40, Canada, $9.80, France, $11.70, here, $16.37. The minimum wage is $620.20 per week. Now, every person in the Abbott Government knows this is ridiculous – everyone – but they are terrified to do anything about it.

Restaurant staff – again, you have to say this slowly – have to be paid penalty rates of 25 per cent for working on a Saturday, 50 per cent for working on Sundays. It used to be 75, 50 per cent for working on Sundays, two-and-a-half times their wage for working on public holidays, an extra 10 per cent for working between 10pm and midnight – this is all Gillard paying off the union movement – an extra 15 per cent for working between midnight and 7am.

For Senator Eric Abetz, the Employment Minister, is saying to people who are getting excited with new and other agendas, he said, go and have a shower. You have to wait until after the next election. He was speaking at an industrial relations conference on the Gold Coast last week. He's on the line. Eric Abetz, good morning.

MINISTER ABETZ: Good morning, Alan.

ALAN JONES: You're kidding me, aren't you?

MINISTER ABETZ: Alan, we went to the last election promising the people of Australia that our workplace relations agenda would be as per the 38 pages that we announced, and we intend to pursue that. Having said that, we have always said that penalty rates and wages should be determined by an independent umpire and not the Parliament, and the independent umpire is the Fair Work Commission.

As you said in your introduction, in relation to one of the penalty rates, that recently was reduced from 75 per cent to 50 per cent. How did that occur? Not with any Government intervention, but by employers making an exceptionally strong case to the Fair Work Commission that they, themselves, had to acknowledge that these high penalty rates were actually costing jobs.

Previously, we saw the Fair Work Commission reduce the minimum hours for school-aged children from three hours to one-and-a-half hours of engagement. Now, they're the sort of common-sense decisions that we think should be made, but by the independent umpire.

ALAN JONES: Now, listen, I've known you for a long, long, long time. You don't believe a word that you are saying. That is absolute crap. Now, you're talking about an independent, Eric, Fair Work Commission. Now, why don't you tell our listeners that they're neither independent nor fair? That 11 of the 14 appointments to the Fair Work Commission since 2007 have come from a union background. The Fair Work Commission is nothing more than an endless tribe of unionists put there by Gillard and Rudd, and they know nothing about productivity, employment, profit or anything else.

MINISTER ABETZ: Alan, your observations about the type of appointments to the Fair Work Commission are similar to the observations that I made whilst in Opposition. But, at the end of the day, it is the institution, the Fair Work Commission, that makes these changes to people's entitlements.

ALAN JONES: But you went to the election telling us – along with Tony Abbott and everybody – that you were going to turn the economy around. That's what you said. You cannot turn the economy around with a Fair Work Commission full of unionists who sponsor a notion where our minimum wage is $16.37, where Canada's is $9.80, the UK $9.40. And, privately, you know that is the reason why people are not being employed.

MINISTER ABETZ: There is no doubt, Alan, that, as Frank Crean, a former Labor Treasurer, said, one man's pay rise is another man's job. I think we all know and understand that, but we did go to the Australian people indicating to them that we would not change these things other than as we announced in our policy. And what I invite everybody to do is to consider the history of workplace changes in Australia.

ALAN JONES: [Speaking over] You went to the electorate, Eric, you went to the electorate saying you'd abolish 18C.


ALAN JONES: And you haven't, you've backed off. Okay, now forget that. Nothing wrong with saying to the people, in the light of the current circumstances, this has to be done urgently rather than wait for another election. Now, Martin Ferguson – oh my God, I'm going to fall off the chair quoting Martin Ferguson, a former Minister in the Labor Government – has said in the last week there has to be industrial relations reform, that spiralling wage claims on resource projects are undermining Australia's competitiveness.

I mean, there you are, you've got a bloke who is the former president of the ACTU who said Australia's inefficient industrial relations and labour-market systems have caused labour shortages, poor productivity and repeated union disruption. Now, you're the Government.

MINISTER ABETZ: And, Alan, in that very space we went to the election with part of our 38-page policy to put a cap on these wage increases with our greenfields policy, and that is what is currently before the Parliament, and we are seeking the support of the crossbenchers to support us in that. So our agenda is to reinstitute the Australian Building and Construction Commission, to get rid of the ‘strike first, talk later’ aspects of the Fair Work legislation, to introduce greenfields legislation that stops this sort of wage gouging, to restrict the right of entry that Julia Gillard promised on the life of her mother she would not change and then did change.

We have said we're going to change that. All of that is currently, as we speak, before the Parliament. For nine months we were blocked by the Labor-Green majority, and all I'm saying to the people of Australia is we do have a reform agenda, but if you want reform in the workplace relations space, revolution, virtually, never works. Evolution is the way to go, and we do have an evolutionary-type policy that we took to the electorate, and it's before the Parliament as we speak.

ALAN JONES: Now, Eric, when you get up in the morning and shave and you're in your own little private room, you know that you mob are spooked by WorkChoices. That's all you're worried about. You're terrified that the Government's Opposition, who have got no hope of winning the next election, none whatever, and you're terrified of saying they'll say this is WorkChoices. The most sensible industrial relations policy ever – you made a big mistake because you didn't include a no-disadvantage test and that cost you.

But what's wrong with an employer negotiating with an employee as to the terms and conditions of their employment without having to get the green light from that union-riddled Fair Work Commission? So I own a restaurant and I have to pay my workers a loading of 25 per cent for working on Saturdays, 50 per cent for working on Sundays, two-and-a-half times their wage for working on public holidays, an extra 10 per cent for working between 10pm and midnight. You're not stupid. You know that is nonsense.

MINISTER ABETZ: Alan, can I also indicate to you and your listeners that part of our policy is to flesh out the Individual Flexibility Arrangements in the Fair Work legislation. That also is before the Parliament. And so we are moving in all those directions, but in a manner that I believe is evolutionary and which will bring the Australian people with us. WorkChoices swung it too far one way. The Fair Work Act swung it too far the other. And we are seeking to bring it back to the sensible centre.

ALAN JONES: But no Labor appointment to the so-called Fair Work Commission –  what a misnomer that is – has a business or an employer background, none of them. They wouldn't know about business. They have never, Eric, filled out a payroll tax slip. How the hell would they know about employment? And to prove that they know nothing, you're now saying, oh well, if you can't get workers because they're too dear in Australia, you can get foreign workers and you will be allowed to pay them 10 per cent less.

MINISTER ABETZ: Well, Alan, that is incorrect. That is incorrect. I know that has been part of the publicity surrounding the designated migration area for Darwin, but anybody employing people from overseas has to employ them at the rate that an Australian citizen or permanent resident would be employed.

ALAN JONES: Well, what's the 10 per cent about?

MINISTER ABETZ: That, I don't know. That is – that was in the media on Friday. I read it, and Michaelia Cash, my ministerial colleague, immediately put out a statement indicating that those reports were incorrect. You might check with…

ALAN JONES: So the deal about a 10 per cent reduction in pay for 457 skilled workers only if employers prove they can't find local workers for the same jobs, that's got nothing to do – that's not an initiative of the Government?

MINISTER ABETZ: That is incorrect, and I've got my own Department to confirm that as well. So the Immigration – because 457 visas are initiated by the Immigration Department - the Assistant Immigration Minister went out on that, but that is incorrect. I can assure your listeners that when we have an unemployment rate of 6.4 per cent, the last thing we want to have is people coming in from overseas undercutting job opportunities for Australians.

ALAN JONES: It might have something to do with the fact that the hourly rates are too high and that the penalty rates are far too high because the employment rate is going up. But aren't there mandatory individual flexibility clauses in awards and agreements? Don't they allow workers to specify their preferred hours of work? Why not restrict the payment of penalty rates to those workers required to work during their non-preferred hours?

MINISTER ABETZ: That is where – with the Individual Flexibility Arrangements that we want to flesh out legislation currently before the Parliament, subject to the workers being better off overall, those sort of issues can, in fact, be discussed and determined and hopefully a resolution come to between the employer and the employee.

ALAN JONES: But I don't hear – why aren't you selling that? Why aren't you saying hey, listen, all you people out there complaining about penalty rates, let me tell you that under the industrial relations system, there are mandatory – mandatory, not voluntary – mandatory individual flexibility clauses, so workers can specify their preferred hours of work?

MINISTER ABETZ: And, regrettably, what happened is that unions in enterprise agreements closed down those Individual Flexibility Arrangements to, basically, make them worthless and useless, and we went to the last election saying that we would flesh them out to allow individual workers the genuine opportunity to come to an arrangement, subject to them being better off overall.

ALAN JONES: God, we're doing a lot of fleshing out, Eric, I can tell you. I would just like you to flesh out the fact that $16.37 an hour for the minimum rate, hourly rate, is beyond comprehension. But we've got to go. You always talk, and I'm grateful for that. But for God's sake, come on, stiffen someone up down there. We need urgent reform.

MINISTER ABETZ: Thank you very much, Alan.

ALAN JONES: Right. Good to talk to you, the new…

MINISTER ABETZ: Good on you (indistinct).

ALAN JONES: The Employment Minister or the Minister for No employment – I don’t know what it is.



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