SUBJECT/S: Productivity Commission’s final report on the industrial relations framework.
DAVID SPEERS: So should workers receive a higher penalty rate for working on a Sunday than they do for working on a Saturday and would cafes, restaurants, other retailers actually open on Sundays or open for longer hours on Sundays if they didn’t have to pay a higher penalty rate to their staff on a Sunday than they do on a Saturday? This is the key debate coming out of today’s final report from the Productivity Commission on the industrial relations framework.
There are a number of recommendations on a number of fronts but this has been the most controversial and most sensitive area. What the Productivity Commission is arguing is that there should be a standard weekend penalty rate, not remove it altogether but a standardised weekend penalty rate for Saturdays and Sundays. This would boost overall employment. There’s been a fairly predictable response. Unions and the Labor party say many, many workers rely on those Sunday penalty rates and they should not go. Business groups, all of them, say that those Sunday penalty rates do hamper business activity, do hamper employment and they should be bought in line with Saturday penalty rates.
As for the Government, well they are somewhat sitting on the fence on this saying it should be entirely left to the Fair Work Commission to decide. The Fair Work Commission, the independent umpire, is currently hearing a case in relation to the retail and hospitality sectors and these penalty rates. The Government, though, isn’t too keen to get involved at all in this. I spoke a little while ago to the Employment Minister Michaelia Cash.
DAVID SPEERS: Minister, thank you for your time, can I start by asking do you think Sunday penalty rates are hurting the economy?
MINISTER CASH: I think when you look at the numerous chapters that the independent productivity Commission has put forward as a basis for their recommendation, there is a good case to say that penalty rates on the weekend, if we did look at the creation of a weekend penalty rate, could see an increase in the number of jobs created. That is a good thing. David, can we be very clear though, this is not a decision for government. I need to be very, very clear on that.
The Government has consistently stated that any decision in relation to penalty rates is a decision for the independent Fair Work Commission and we stand by that. But in saying that, I mean, there’s predictable and then there’s Brendan O’Connor. I’ve just watched Brendan’s interview and I have to say, you’d think the entire report was on penalty rates. That is just one of the recommendations. The report itself has 31 chapters that look at the workplace relations framework within Australia and how, as a government, we can improve it so that employers and employees are better off.
David, I’m not about to out my head under a doona…
DAVID SPEERS: As you know- okay [laughs] as you know Minister, the issue of Sunday penalty rates is a sensitive and contentious one. You acknowledge there the start of that answer that you do see a strong case that having a standardised weekend penalty rate may help boost employment. So, what then, as a government, are you going to do about that?
MINISTER CASH: As I’ve said, the Government does not set penalty rates for Australia. That is for the independent Fair Work Commission. That is our position and we’re not…
DAVID SPEERS: [Talking over] No, but the Government can seek to legislate here, the Government can seek to change the law and rule out Sunday penalty rates from award conditions.
MINISTER CASH: I can assure you that is not what the Government will be doing David. And anybody who says that the Government is going to go down that path is just wrong. What I think’s a great shame though, David, is that when we released the terms of reference, a long time ago now, for the PC review, there was a scaremongering campaign. Penalty rates were not mentioned in the terms of reference. When the Productivity Commission released their draft report, there was another scaremongering campaign. I’ve just listened, as I said, to Mr predictable himself, Brendan O’Connor in relation to his response. There are 31 chapters in this independently considered evidence-based report.
I’m going to take it to Australians and have a conversation with them…
DAVID SPEERS: [Talking over] Okay but if we can just stick with your response for a moment to this- and I’d like to get to that, I’d like to get to that. But when you say you rule out any legislative change, are you saying you won’t take such a position to the election either?
MINISTER CASH: Look, at this present point in time the answer is no. I cannot see how the Government would change that position. Our position has consistently been that when it comes to penalty rates they are set by the independent Fair Work Commission. We do not propose…
DAVID SPEERS: And why won’t you…
MINISTER CASH: …we do not propose to change that.
DAVID SPEERS: …why won’t you as a government legislate in this respect given- and I’m sure you would have been following the Fair Work Commission hearing into this issue as well, last week at the commission, a survey from a number of business groups was presented- submitted, nearly 9000 employers were surveyed and 88 per cent said their Sunday trading hours were less than their weekday trading hours and 53 per cent cited wages and costs as the reason. This is, as you acknowledge, stopping businesses from opening up as much as they’d like to on Sundays, employing as much as they’d like to on Sundays.
MINISTER CASH: Absolutely, that is exactly all the evidence that was given. And what I would say is the independent Fair Work Commission will take that into account. The Fair Work Commission has already made a slight adjustment to Sunday penalty rates so they have certainly shown that they are capable of doing that. In relation to this issue, it is very well-known that there are numerous opinions on it, and I’m sure the Fair Work Commission is doing exactly what it should be doing and that is canvassing those positions to then make an evidence-based determination. David, we can not …
DAVID SPEERS: [Interrupts] Will you make a submission to that Fair Work Commission hearings?
MINISTER CASH: … no, I’ve made it very clear that the position of the Government has consistently been that we will not be doing that.
DAVID SPEERS: And yet you have- the Government has made a submission to another Fair Work Commission hearing this year on child care, equal pay for childcare workers. What’s the difference with this case? Is it just too politically sensitive?
MINISTER CASH: No, no, not all. In relation to the child care case it was to provide factual information and that was what we did. We didn’t provide an opinion either way. The Government is often called on to provide submissions and it makes a decision as to whether it should or it shouldn’t. And in relation to penalty rates I think that employers, unions, employees, they are more than capable of providing submissions to the Fair Work Commission.
I mean, you only have to look at the Productivity Commission review to see that over 20 unions were consulted. Hundreds of submissions were received from stakeholders. So Australians are prepared to have a conversation in relation to the Workplace Relations Framework. And I believe they’re also prepared to have a conversation in relation to penalty rates via the Fair Work Commission.
Can we just remind ourselves of one thing, though, David. The reason that the Fair Work Commission is reviewing penalty rates is solely the work of Bill Shorten. He specifically ensured that penalty rates were to be considered as part of the review of awards. So if we should be asking anybody about why penalty rates are currently being considered, it’s Bill Shorten because he’s the reason this is occurring.
DAVID SPEERS: Alright, but as you point out, there have been some 255 submissions, initial submissions, to the Productivity Commission review. There were I think another 118 after its draft report. Hundreds of submissions. Fair Work Commission also looking at this. Why then do you need another round table process next year? Is anything new going to come out of that?
MINISTER CASH: Well, I can’t pre-empt what those consultations will be. But David, at the end of the day, workplace relations in Australia, it is a contentious issue. It’s long been pitted as an issue between unions and the government, employers and the unions, employers versus employees, rightly or wrongly. Any changes that we propose to make to the workplace relations system in Australia, I want to talk to the Australian people about them. I’m not going to be side-tracked by what Labor and the unions are saying today. I’m going to have a conversation with the Australian people via the varying stakeholder groups that represent them and then we will formulate a workplace relations policy. I’m bringing Australians with the Government on this journey. That’s a really, really healthy thing to do …
DAVID SPEERS: [Talks over] Okay, but what further information are you looking for before making- what further information are you seeking before making a decision here? I mean, what more do you need to make a call?
MINISTER CASH: … well, its comments basically on the recommendations and how they see those recommendations working out on the ground. What recommendations are more important than other recommendations? So again, you know, I always thought, David, that talking directly to the people and seeking their views was a healthy thing.
We’re going to an election next year. The Government had always said, prior to the 2013 election, that if we were given the honour of governing, we would have an independent Productivity Commission review of the entire Workplace Relations Framework. We’ve done that. We now have the final report. It’s in excess of 1000 pages, it has 31 chapters – we will now consider that report.
But I think it would be irresponsible of the Government not to now say in relation to what is such an important part of the Australian working life, the Workplace Relations Framework, we’re not going to seek further comment. That to me is healthy. I will be doing it and we will then formulate our policy on the basis of that.
DAVID SPEERS: And yet you have, in our conversation this afternoon, ruled out any move on Sunday penalty rates from the Government, any legislative change there. I mean, given you’ve got such a comprehensive Productivity Commission report saying they should be brought into line with Saturday penalty rates, is this the economic leadership that Malcolm Turnbull said that he would deliver when he replaced Tony Abbott?
MINISTER CASH: Again, this is just one part, one part of a wide-ranging review. We are absolutely showing economic leadership …
DAVID SPEERS: [Interrupts] But a very important part, according to all business groups and according to many of your colleagues privately, this is the low-hanging fruit that you should take, is what they say.
MINISTER CASH: Well as I said, the Government’s position is, and it remains, that the setting of penalty rates is for the independent Fair Work Commission. If the Government was suddenly decide- suddenly decided to set penalty rates, David can you imagine what that would mean in the Parliament every day? I think we’d be debating penalty rates every single day of the week.
DAVID SPEERS: [Talks over] I don’t think, with respect, I don’t think anyone is saying the Government should set penalty rates, it’s about whether Sunday penalty rates should exist separate to Saturday penalty rates. It’s not whether the Government should set them.
MINISTER CASH: The Productivity Commission- can we just make it very clear, the Productivity Commission does not recommend abolishing Sunday penalty rates or Saturday penalty rates. It says that there is a case for penalty rates to be paid on Saturday and Sundays. The question is, in the context of moving into 2016 and the way that we now work, the way that Saturdays and Sundays are often in a very small industry or industries are really the same day, should there be a weekend penalty rate, and that is the recommendation they’ve given to the Fair Work Commission. And as I’ve said, the Fair Work Commission has already shown it is prepared to move on penalty rates. Let’s just wait and see what the Fair Work Commission does now.
DAVID SPEERS: And if the Fair Work Commission does decide to have a standardised weekend penalty rate, will you be comfortable with that?
MINISTER CASH: Well that is something that Fair Work Commission itself will decide. I’ll wait and see what the decision of the Fair Work Commission is. But as I said, I’ve got an entire 31-chapter Productivity Commission review that looks at the workplace relations system as a whole. You are right, penalty rates are an important part of that system and they’re a really important part for certain groups, both small business and for employees. But David I am not going to be side-tracked by Labor, by the unions, and forget about the rest of the Productivity Commission review. Penalty rates are a recommendation, but they are part of what was a comprehensive evidence-based review by the Productivity Commission. And as I said …
DAVID SPEERS: Okay, but …
MINISTER CASH: … today I announced that I will be seeking now to engage with Australians in relation to the review’s recommendations.
DAVID SPEERS: Let me finally ask you then, will there be any industrial relations change taken to the next election?
MINISTER CASH: Well I would certainly hope so, because even the Productivity Commission itself says that whilst the system itself is not broken there are certain instances where it is in need of repair. I think it would be very naive as a Government to say that we don’t propose to take any changes to the next election. The answer is I will be taking a policy to the next election. But David, that is just it; the Australian people, they will be very clear about what our policy is. As you know, I will shortly receive the report from the Heydon Royal Commission. That is industrial relations policy as well David, and based on the findings of the Royal Commission, as you know, I still want to see the Registered Organisations Commission commence, I still want to see the restoration of the ABCC. So yes, we will be taking an industrial relations policy to the next election, but the Australian people will be given the opportunity to vote on that policy. We have always said any changes we make will be taken to the Australian people; I and Mr Turnbull, Prime Minister Turnbull, we stand by that commitment.
DAVID SPEERS: Employment Minister Michaelia Cash, appreciate your time this afternoon, thank you.