Release type: Transcript


Release of Productivity Commission review – Workplace Relations Framework


Senator the Hon Michaelia Cash
Minister for Employment
Minister for Women
Minister Assisting the Prime Minister for the Public Service
Senator for Western Australia


SUBJECT:   Productivity Commission review into workplace relations

MINISTER CASH: Ladies and gentlemen, today I'm announcing the tabling and public release of the Productivity Commission's review into Australia's workplace relations system. Prior to the 2013 election, the Coalition Government or the then Opposition gave a commitment that if we were elected to govern we would undertake an independent review with the Productivity Commission into the workplace relations system. Why? Because we want to ensure that our Fair Work laws work for everybody, employers and employee alike.

The terms of reference for the Productivity Commission review were carefully considered. They were considered in consultation with unions, with employers, and with state governments. The Productivity Commission publicly released earlier this year a draft report. It then sent the draft report out for further consultation around Australia. The Productivity Commission has now provided its final report to Government. I remind everybody that this is a report to the Government, it is not a report by the Government. It is a substantial report, and it has been prepared after extensive public submission and consultation processes. For example, more than 20 unions, including the peak Australian union body, the ACTU, participated in the review by making detailed submissions. The Productivity Commission also received hundreds of submissions and comments, and contributions, demonstrating the broad community involvement in this review process.

As the Government has stated all along, we will now carefully consider the review’s recommendations and the final report. If there is a case for sensible and fair changes to the Fair Work framework, these will be clearly outlined and they will be taken to the next election, and we will seek a mandate from the Australian people. This is exactly what we promised prior to the last election, and it is a commitment that we will keep. Any changes that are made to the workplace relations framework should continue to ensure that Australia remains a high wage, a high productivity 21st century economy with a strong safety net.

I just want to address very briefly some of the scaremongering that has occurred in relation to the Productivity Commission review, the draft report, and of course as we stand here today, the final report. When the terms of reference for the Productivity Commission inquiry were released, the unions and Labor launched a scaremongering campaign. They were only terms of reference of which the unions had been able to contribute to. When the Commission earlier this year released its draft report, what did we see again? Before Labor and the unions had ever seen the report they had launched a scaremongering campaign. I therefore don't believe that anybody is surprised by the fact that all of last week and all of this week, or to date, we have seen Labor and the unions yet again launching a further scaremongering campaign based on a report that they have not yet seen. I believe that this shows that they are just interested in playing tired old political games; quite frankly games that the Australian public are well and truly over.

What we want to do as a Government is we want to engage in a public consultation process with the Australian people. We want to have a genuine evidence-based conversation with the Australian people about the fair work laws and how they can work best across the board for employees, employers, and the Australian community as a whole.

In terms of the specific findings and recommendations of the Productivity Commission review, I don't intend to play the political rule-in rule-out game. The Government, as I've said, is focused on having a mature conversation with the Australian people about the recommendations in this report and the future of the workplace relations system in Australia.

There is though one issue that I will comment on, because of the deliberately false and misleading campaign that has been waged in relation to it by the unions and Bill Shorten. And of course the issue is that of penalty rates. The Government's position on penalty rates has been and continues to be that penalty rates are determined by the independent Fair Work Commission. Anyone who says otherwise is deliberately misleading the Australian people, and quite frankly probably doesn't have an understanding of the way workplace relations works in Australia. Given that I have no confidence that at 2:15 today when the Shadow Opposition Spokesman does his press conference in relation to the PC report that he is not going to take it as another opportunity to deliberately mislead the Australian people, I'll outline some of the recommendations the Productivity Commission has found in relation to penalty rates.

The Productivity Commission has concluded that award penalty rates should continue to be set by the independent Fair Work Commission. The Productivity Commission does not recommend any changes to overtime penalty rates, night penalty rates or shift loadings. It has not suggested any changes to the penalty rates of nurses, teachers, or emergency service workers. The only recommendation that the Productivity Commission makes on penalty rates is directed to the independent Fair Work Commission, and that is in relation to the weekend penalty rates for the retail and hospitality industry. Whether or not the independent Fair Work Commission accepts or rejects this particular recommendation is a matter for the Fair Work Commission.

The Government will now engage in a public consultation and a conversation with the Australian people in relation to the Productivity Commission review's final report and findings. In particular, we want to hear from people as to how our workplace relations system can better benefit all Australians by promoting jobs and productivity by providing incentives to end long-term unemployment, especially incentives for young people. We need a workplace relations system that is future-focused and adaptable and, of course, we need to increase women's workforce participation. This whole process is part of the Government's plan for responsible, economic reform to contribute to the prosperity of all Australians. This is a Government that is focused on increasing productivity, on growing our economy and increasing jobs. Our future working lives are going to be defined by adaptability and collaboration. Why? Because this is a reflection of the technological change which is happening at a rapid pace and, as we know, is reshaping the world in which we work.

Today I announce that early next year I will be conducting a series of roundtable discussions with employees, employers, unions, social welfare groups, and women's groups to consult on the recommendations and what we as a nation need to do to promote the best interests of all Australians for the future. There will of course be some that rush to judge the Productivity Commission report and call for measures to be immediately rejected or accepted; as I said, I will not be playing the political rule-in rule-out game. There will be some who see this as an opportunity to nothing more and nothing less hijack the debate and make a political point. I however, look forward to engaging in that conversation with the Australian people to ensure that the system that we have works for the benefit of all Australians.

The Government has said that if there is a good case for fair and sensible changes to the workplace relations framework, these will be clearly outlined and they will be taken to the Australian people, and we will seek a mandate at the next election. That is what we promised, and we intend to keep that promise.


QUESTION:  If you go down the path of accepting the changes to Sunday penalty rates, does that require legislation or are you saying that the Fair Work Commission has existing powers to make that change?

MINISTER CASH: Rebecca, the way that penalty rates in Australia are determined, Government does not have a role in determining penalty rates. I use a very similar analogy. Government does not set the interest rate; this is done by an independent body. It is the exact same process with penalty rates. Penalty rates are set by the independent Fair Work Commission. Government does not have a role to play in that. That is the position of this Government. Brendan O'Connor may have a different view. He may want a Labor Government to set penalty rates in Australia, that's for him to tell the Australian people. But I can assure you that this Government will continue to see the independent Fair Work Commission set penalty rates in Australia.

QUESTION:  So no legislation is required?

MINISTER CASH: Legislation would be required if you were to do that. And I think everybody knows that legislation would not get through a Senate. But in any event, it's not the Government's intention because why would the Government set penalty rates? It's like asking the Government to set interest rates. It is not something you want your Government doing. You want that left to an independent body, and that is the position of the Government.

QUESTION:  But you would have to legislate to give them the ability to make that change, is that right?

MINISTER CASH: No, at this present point in time the way the framework is set up is that penalty rates and the minimum wage, et cetera, it is set by the Fair Work Commission. That's it. That is the Government's position and we have no plans to change that.

QUESTION:  So what would you be taking to the next election, then?

MINISTER CASH: Well, at this stage, that's why I've announced today that I will now be embarking upon a series of public consultations with all stakeholder groups to discuss with them what they believe are fair and sensible changes to the workplace relations framework in Australia. That will ensure that we continue to grow as a country, that will ensure that our business is able to continue to create jobs, but at the same time ensures that we have a strong safety net.

QUESTION:  Minister, you've read the report, do you consider it fair and sensible?

MINISTER CASH: I think that this is, without a doubt, a report that is based on copious amounts of evidence. The Productivity Commission, as you know, is an independent commission, it is independent of Government. This is the same Productivity Commission that carried out the inquiry into the NDIS. It's the same Productivity Commission that carried out the inquiry into childcare. So they are an independent body. When you look at the amount of evidence, and the number of submissions, and the number of persons and the type of groups that put in - whether it be a verbal submission or a written submission - to the Productivity Commission, I don't think anybody can be under any an illusion that this is an evidence-based report. But the evidence is not from one side of the political spectrum, it is from across the board. And that is why in my opening statement I said that the Productivity Commission consulted with in excess of 20 unions, including the ACTU. Because you need to take into account everybody's views when you're looking at the workplace relations system.

QUESTION:  Is it scaremongering to point out that some people will be worse off if [indistinct] …

MINISTER CASH: I'm not sure upon what basis they'll be worse off, because the Government has no plans to change penalty rates. So if the allegation is that people will be worse off because the Turnbull Government is going to lower penalty rates, then absolutely I refute that, because the Government has no plans to change penalty rates. As I have said, penalty rates are set by the independent Fair Work Commission, just as interest rates are set by another independent body. The Fair Work Commission has, under the inquiry that was set up by Bill Shorten when he was in Government, moved to lower Sunday penalty rates; but that is a decision that is independent of Government, and it is a decision that the Fair Work Commission makes after it has looked at the situation in total. But, again, it is independent of Government.

QUESTION:  You say it won't apply, the recommendations don't apply to nurses, teachers or emergency...

MINISTER CASH: Emergency service workers.

QUESTION:  … service workers. Is there any prospect that after you consider the report, that you could include those workers in your response?

MINISTER CASH: Well no the position of the Government is that this is for the independent Fair Work Commission. That's it. It is for the Fair Work Commission to make a determination. And in relation to the findings of the Productivity Commission, they do make a finding that the only case for change in relation to penalty rates, if there is to be a change, again, the Fair Work Commission does not have to do this, but is in relation to those industries. And they make that finding - they actually dedicate five chapters of the report to it, because it is a contentious issue, it is an economic issue, it is one that is they have given considerable thought to, and when you actually read the final finding, it is based on evidence, but it's also only a recommendation.

QUESTION:  You seem to be keen to keep the Government at arm’s length from these recommendations, but business has been asking for changes to penalty rates for years. They will be seeking some leadership from you. Can you understand why they would be disappointed that you're not coming out and supporting their case?

MINISTER CASH: No, I can understand why business would be disappointed. However, I think people need to remember that the penalty rates issue was only part of the Productivity Commission review. This was a holistic review of the workplace relations framework. It is unfortunate that because of the scaremongering by Labor and the unions, penalty rates has become the focus of what people are talking about. It was only a part of the review. The Productivity Commission report itself, I think it's over a thousand pages, and it literally goes through a number of recommendations, because, as I said, they actually looked at the workplace relations system in Australia. And again, that is why I will be talking directly to the Australian people. Let's talk about how we can make the workplace relations system in Australia one that works for employers, one that works for employees, one that ensures that employers are able to grow, because you don't have employees if you don't have employers, and we must ensure we get the balance right. The more employers we have, the more opportunity for people to put their hand up and say: I want to work. But at all times, the Government acknowledges that we must have a strong safety net. And, again, anyone who says anything to the contrary, you're basically writing yourself out of this conversation. I'm going to be talking directly to the Australian people about what they need from their workplace relations system to ensure that the jobs that they do today, but more than that, the jobs in particular that our young are going to be doing tomorrow, are supported by our framework.

QUESTION:  Minister, can you comment on any of the other recommendations?

MINISTER CASH: In relation to the recommendations, a number of them, in fact the majority of them are very similar to what was in the draft report. There are some recommendations which are new recommendations and they are because when the Productivity Commission released its draft report, there were a number of areas which they sought further information on. That information was then provided to them, and they were able to then in the final report make a number of recommendations. One is in relation to the transfer of business. One of the longstanding issues on the transfer of business is that often when a company buys out another company, there is a disincentive to bring on the employees from the company that it is buying. The Productivity Commission acknowledges this, and it wants to look at ways you provide these companies with an incentive to take on those employees so that they are not left without a job. Another recommendation is in relation to greenfields agreements. The Productivity Commission very much takes the view that greenfields agreements should not be hamstrung by some parties, because at the end of the day these major projects will not get off the ground if you just continue to fight. We need major projects getting off the ground; we need incentive for people to invest in major projects in Australia. Because when these greenfields agreements get up, you suddenly have a workforce, you suddenly have Australians with jobs. And very much the Productivity Commission recognises that.

One of the other issues that I think people will be very pleased with, and one of the other recommendations, is that the Productivity Commission has recommend the Government strengthen protections against sham independent contracting. That is something obviously that we will look at very carefully. But in the main, the majority of the recommendations are similar to those in the draft report, but there are some that the Productivity Commission had sought further information on and they have now formed the basis of new recommendations in the final report.

QUESTION:  Maurice Blackburn put out a statement saying that they’ve come to an agreement with the Government on intellectually disabled workers being underpaid. Do you know about that dispute and the resolution?

MINISTER CASH: Not in relation to Maurice Blackburn, no, I'm not aware of that.

QUESTION:  And just one more about the- Colin Barnett has just announced a $3.1 billion deficit for this financial year; I'm just wondering with your West Australian hat on, how is it going to come to pass that WA gets a better GST deal?

MINISTER CASH: Well that is why you elect Senators and Members that are prepared to take the fight to Canberra. I believe that the WA Liberal team has shown to all Western Australians that we are prepared to stand up for WA. And in particular, the additional share of infrastructure funding that Mathias Cormann was able to have delivered from the former Abbott Government to Western Australian in compensation for our fall in GST, I think should reassure Western Australians that you do have a team in Canberra who are not backward in coming forward. It's not always liked by other states, I can assure you, but we recognise that WA is at a disadvantage when it comes to the GST, and certainly we are prepared to take that fight to Canberra.

Thank you very much.