SUBJECT/S: Fair Work Commission ruling on Sunday penalty rates.
ROSS GREENWOOD: Welcome to back to Money News right around Australia. Well, if there’s been one issue over the past week that has been the hot button for politics but also for community debate, but then going forward it will be the hot button right into the next federal election in around two-and-a-half years time. That is the issue of penalty rates. Now, penalty rates as you know, from the independent commission, the Fair Work Commission, decided to make the penalty rates on a Sunday be reduced. Not to the whole level of what they are on a Saturday, but to around 150 per cent for those working in hospitality and also the retail trade. Now, those people who are on those penalty rates, well of course, they’re blowing up. The unions are blowing up, the ACTU says it will launch a significant campaign against the Government, trying to force the Government to change, but the interesting point is it is not a government decision. It’s a Fair Work Commission decision and of course the Fair Work Commission was created by the Labor Party, and so this is where it all goes in a bit of a circular motion.
Let’s go to the person in the middle of this particular debate and that is our Industrial Relations Minister, Minister for Employment Michaelia Cash who’s on the line right now. Many thanks for your time Michaelia.
MINISTER CASH: Always fantastic to be with you, Ross, and good afternoon to your listeners.
ROSS GREENWOOD: Alright, I want to go to one issue here because it’s absolutely key. A person who is currently receiving penalty rates on a Sunday when they work is going to take a pay cut. Many of those people are lower income workers in Australia, they say they cannot afford a pay cut. That’s the reason why the ACTU’s campaign is going to gain some resonance because it feels as though somebody who’s currently got something is losing something. How can the Government respond to that?
MINISTER CASH: Well, as you said in your opening, in the first instance, this is a decision of the independent umpire, the Fair Work Commission. Bill Shorten and Labor need to make a decision: you either support the umpire or you don’t, and Bill Shorten in trashing the independence of the Fair Work Commission shows you that he’s nothing more and nothing less than a populist. When you look at the decision, it took three years and many, many hearings and thousands of submissions and President Ross and the panel carefully analysed the evidence and based on that analysis, they determined that there needed to be a small shift in Sunday penalty rates so they were more properly aligned with Saturday penalty rates.
But what I would say to you listeners, Ross, is what Labor is not admitting to, and certainly the unions won’t admit to, is the fact that even President Ross himself admitted that there would be positive employment benefits following on from this decision. So, if you are unemployed or underemployed, this is a positive for you.
ROSS GREENWOOD: Yes, except that if I am employed and I’m getting those penalty rates, I’m still taking a pay cut and if that pay cut that I’m going to take is really the difference between a bit of child care during the week or a bit of, I don’t know, the mortgage being paid, whatever it might be, you might actually be enjoying the fact that you work on Sunday and get double time, rather than in the future getting time-and-a-half.
MINISTER CASH: And in that respect, again, President Ross has acknowledged that there needs to be transitional arrangements put in place and he’s called for submissions in relation to that. So, at this point in time, he’s made his decision but we now need to see what those transitional provisions are. But, again, Ross I go to, you know, this is all about a benefit for small business when you look at the decision. Why is it that the big end of town are able to cosy up to the SDA, do deals that within reason get rid of penalty rates, but a small business unfortunately has to work under what is a much tougher regime?
ROSS GREENWOOD: In other words, what you’re saying is that the unions, the big ones like the Shop, Distributors and Allied Associations, the retail unions, get together with the big shopkeepers and effectively cut a deal with them, get rid of the penalty rates, and this is a reason why Trent the bloke who Bill Shorten put up front…
MINISTER CASH: Trent.
ROSS GREENWOOD: Trent, that’s right, doesn’t actually receive any penalty rates.
MINISTER CASH: I’ll give you an example. So a small takeaway business has to pay $29.16 an hour on Sunday for an employee under its award. The fast food giant next door, because of the cosy deal they’ve done with the union, only has to pay $21.08 on a Sunday for the same worker. How is that fair to small business? You know, the majority of businesses in this country are small businesses. The majority of businesses that are affected by the decision of the independent umpire are small businesses. We should be doing everything we can as a society and as a Government to empower small business and ensure that they can prosper and grow.
ROSS GREENWOOD: But you would acknowledge politically going into the next election, and it’s going to be a long campaign, that this is one that the ACTU and Bill Shorten can gain some populism about simply because it’s a pretty simply message to sell to somebody that they might be taking a pay cut.
MINISTER CASH: And you hit the nail on the head there. This is all about populism. Shorten is a populist. Why is he a populist? Because it was only a few months ago he was running around and he was saying you absolutely have to respect the decision of the independent umpire. And in fact if you remember when the Greens first mooted that they would bring in legislation in relation to penalty rates, Bill Shorten actually criticised them. Bill Shorten is now showing Australians he is a populist, he dances to the tune of the unions, but I think the bigger worry for Australians is this: Bill Shorten is showing he’s anti-growth and so many of his policies – higher taxes, costs being high with the 50 per cent renewable energy target – are all about anti-growth. But he’s also about freezing things as they are now and not looking towards the future. We need to ensure that we have a framework in which business operates and it needs to be modern, fit for purpose, and conducive to growth. And as I said, in relation to the decision of the independent umpire, it took almost three years, in excess of 5,000 submissions, and careful analysis for the independent umpire to come to its decision - and a decision which acknowledges positive employment benefits.
ROSS GREENWOOD: OK, but the Government, I presume, agrees with the decision of the Fair Work Commission. The reason I say that is because, say for example, another issue you and I have spoken about before is the Road Safety Remuneration Tribunal where, of course, small independent truck operators were virtually being forced out of business because of the decision of that organisation. What you did, you went back into Parliament, you legislated, you got rid of that tribunal, and technically if you really felt so strongly about the penalty rates, you could do a similar thing there as well.
MINISTER CASH: I’ll just pull you up there. In relation to the Road Safety Remuneration Tribunal, that was a gift from Julia Gillard to Tony Sheldon. And the reason it was a gift was because Tony Sheldon and the TWU had said they would campaign against the imposition of a carbon tax and they were given the Road Safety Remuneration Tribunal and they were able to stack it with their mates. That was not an independent tribunal; it was a tribunal that was set up nothing more and nothing less …
ROSS GREENWOOD: Isn’t the Fair Work Commission stacked with union mates though?
MINISTER CASH: Look, it is, as you know, both sides of politics put people onto it but there certainly has been that allegation and if you looked at a number of the resumes that that is the case. But in saying that, I’ve also made a number of appointments of incredibly qualified people to the commission. But you know, I think one of the bigger issues is this: Bill Shorten is trashing the independence of the Fair Work Commission, ironically a commission Labor set up, he is deliberately ignoring the decision of the independent umpire that made its decision based on expert evidence. But more importantly, in terms of the decision and the reasons for the decision, he is turning his back on unemployed Australians who might now be able to get a job on a Sunday because a small retailer is able to open. And he’s turning his back on under-employed Australians who might now be able to do more hours, again because a small business person is able to open. And you know, when you look at the fact that unions are able to do deals with the big end of town at the expense of small business, we’ve got to start standing up for small business. Let’s grow small business in Australia.
ROSS GREENWOOD: Michaelia Cash is our Employment Minister and as always, we appreciate your time.
MINISTER CASH: Great to be with you Ross.