Interview — Sky News Business Weekend with Ross Greenwood
ROSS GREENWOOD:
Yeah, welcome back, it's great to have your company here on Business Weekend. The election is coming. The opinion polls look bad for the Government. But how can that be when employment's so strong, home values are soaring, interest rates are so low and the Government's pumped so much money into the economy? I've tried to work it out this week with Employment Minister Stuart Robert.
[EXCERPT]
ROSS GREENWOOD:
Stuart Robert, as Employment Minister, could you have ever imagined in your life, your career, that Australia would have an unemployment rate with a three in front of it?
MINISTER ROBERT:
You need to be operating in the 70s, 50 years ago, Ross to have seen that. Now, we knew as we invested in skills, that we've got our macroeconomic settings right, that we could see unemployment coming down. Heading towards a three in front of it, is historic and it's historic for families. Think about what that means for everyday Australians and especially school leavers.
ROSS GREENWOOD:
Okay. So for Government, though, does that mean at some point there's inevitably going to be a push from unions, new enterprise bargaining agreements when they're when they're negotiated that there's going to be a push on wages? Because that's what the Reserve Bank governor seems to say is going to be the catalyst also for higher interest rates.
MINISTER ROBERT:
Wage increases, of course, this year are forecast at 2.25 per cent. The Reserve Bank governor is now saying that will increase, moving into sort of three, three and a quarter next year. He made a really interesting point yesterday in his speech to the press club that there's a lot of inertia in the wages market in Australia, driven by long run EBA's. And, of course, the award system. But as unemployment comes down and as the nation competes for high skilled workers, you'll inevitably see pressure.
ROSS GREENWOOD:
Ok, so what I'm wondering here is, you know, whichever government is after the next election, whether there is really a hot spot coming with unions, with employees over the value of wages? That given the fact that price pressures are rising, petrol, interest rates potentially into the future, food prices are rising, that they are going to demand higher wages.
MINISTER ROBERT:
I think you'll always see a hot spot with the unions. Even Mr Hawke in the Accords still had enormous industrial action. Now the governor, of course, the Reserve Bank made the point fuel prices up 32 per cent. But there's external shocks that are driving a lot of that. A lot of the supply disruptions we're facing are starting to moderate a lot of the increase in goods over services, because of what the virus has done, will start to moderate over time. So those pressures should start to lessen. But of course, as unemployment comes down strongly as we have a full market where anyone able to get a job can move around. I think those pressures are inevitable.
ROSS GREENWOOD:
Ok, so wages start to rise. Inevitably, that's also the catalyst, potentially for interest rate rises. So if you think about coming into an election campaign, you have got to fight and to argue against rising fuel prices, rising costs and rising interest rates. Is that really a mixture that a government feels fired going into an election campaign?
MINISTER ROBERT:
Well, I slightly disagree with you, Ross. The Reserve Bank governor did not make any indication of rising interest rates in the short term. He made it very clear. His legislative mandate, of course, is to ensure inflation stays comfortably in the ban of 2 to 3 per cent, and of course, he's got a requirement for a full employment. Now we're starting to see full employment coming through 3.75 per cent is his forecast end of the year. We've now touched for the first time in six odd years between the band. One swallow doesn't make a spring. The Reserve Bank governor made the point he'll need to wait and see if the board will need to wait and see what inflation looks like within that band when these international pressures moderate where it goes to.
ROSS GREENWOOD:
Okay, so can you then answer this one? For me, it's a riddle I can't work out. How does a government that has house prices up 20 per cent in the past year that has unemployment at 50 year lows? That has just given out some $350 billion in subsidies and funds. How do you find yourself behind in the polls going into this next election campaign?
STUART ROBERT:
Well, a week’s a long day in politics. There’s four months to go for an election, give or take, so there’s going to be lots of to-ing and fro-ing.
ROSS GREENWOOD:
But you get my point, don’t you?
STUART ROBERT:
Oh, I do. But I’d say to Australians: why would you want to live anywhere else other than Australia right now? More of our citizens employed now than pre-pandemic, the only OECD country in the world to boast that. Unemployment coming to a 50 year low, participation levels rising in terms of mums and dads in the marketplace. A million more women employed since we came to office eight years ago, underemployment now coming down into the 5 per cent, youth unemployment the lowest in 11 years. That is a recipe for re-election, because economic factors sit there front and centre. Now, the Australian people are pretty canny, they’ll always make the right decision, and we will continue to articulate this position from this day to election day.
ROSS GREENWOOD:
You’re right, it’s a great story. But you’re still behind in the polls. So, what’s gone wrong? Is it a messaging thing? What is it that the public appear not to be getting with this government right now?
STUART ROBERT:
COVID hasn’t finished yet and people remain frustrated. I remain frustrated in terms of COVID restrictions and what it means for everyday life. It’s been a difficult summer, with Omicron coming quickly upon us and where it sits. Now, sure, the macroeconomic settings are right and the Reserve Bank Governor made that point very clearly, but people are still frustrated. People want to go out and get back to their normal life. There are some restrictions in place, but of course that will moderate through, and we’ll see those frustrations start to dissipate. Australians pay attention, though, Ross, when elections get close, and we’d encourage them, clearly, to do that.
ROSS GREENWOOD:
Okay, let’s go back to the employment situation. The last time we spoke we talked about the opening of the borders and the relief that that might give. And of course, that might potentially take some of those wages pressures away. Have you started to see any evidence that that is having an impact in Australia?
STUART ROBERT:
Well, reintroducing migration is not designed to take wage pressures away. The economy will sort itself out in that respect. It’s about getting skilled migrants back through. Now, we’ve still got 650,000 in terms of the JobActive case load, those on Jobseeker payments, that we really want to see get into the marketplace. That’s why there’s billions in JobTrainer, 300,000 Australians right now taking those free or very, very low fee courses, over 130,000 having come through those courses into the workforce. And that’s on top of the existing VET and skills funding, $7.1 billion in the last 12 months. So we are investing in Australians and investing in getting them skilled, because that’s what gets them employed. We’ll still have skilled migration, we always have had.
Now, we’re not going to do what Mr Rudd did after the GFC, which was double it and bring in 600,000 skilled migrants. We’re not going to do that, but we are going to have sensible settings.
ROSS GREENWOOD:
Stuart Robert, always good to catch up.
STUART ROBERT:
Great, Ross, good to talk to you.