Interview with Steve Austin, ABC 612 Brisbane
STEVE AUSTIN, HOST:
The Federal Government has announced a Jobs and Skills Summit that's to be held in Parliament House at the beginning of next month, September. And it has echoes of something that happened when Bob Hawke was Prime Minister, as you know the Leader of the Opposition has said 'I won't go.' David Littleproud, the Nationals leader, has accepted belatedly an invitation to attend. And apparently unions, employers, civil society and other government organisations will be there. The Federal Treasurer is Queensland Labor MP Jim Chalmers. Jim Chalmers, thanks for coming on ABC Radio Brisbane this afternoon. If you drive around your city, Jim Chalmers, you will see posters, signs, almost pleadings from employers, seeking workers today, seeking employees today. How will the Jobs and Skills Summit do anything for them in the short term?
JIM CHALMERS, TREASURER:
Thanks for having me back on the show Steve, and I think it's true what you say about people needing workers and needing skilled workers. That's true of Brisbane, but it's equally true of other parts of Australia, too. I've just spent yesterday in Rockhampton in Central Queensland, today on the Sunshine Coast around Maroochydore. And it's a pretty common story that we need more workers, we need better trained workers and those workers need sustainable wages growth, so that's really what the Jobs and Skills Summit is about. Yes, there are some immediate needs, which we're very conscious of, but there are also some longer term issues in the labour market, which we need to deal with as well. So, what we'll try and do at the Jobs and Skills Summit, whether it's issues around training, whether it's issues around getting more people working more hours if they can, by reforming childcare. Whether it's issues around migration, whether it's how we involve and attach more people from disadvantaged groups into the opportunities of a labour market, which is pretty tight at the moment, all of those things will be central to the conversation at that Jobs and Skills Summit at the beginning of September in Canberra, but before that as well, as me and a lot of my colleagues, Senator Anthony Chisholm and others are doing regional jobs forums around Australia as well.
AUSTIN:
I understand that your electorate on the south side of Brisbane between Brisbane and the Gold Coast, that Logan-Beenleigh area has a particular feature that has a real issue with long-term unemployed, some people call it intergenerational unemployed. Why would you be considering bringing in skilled workers from overseas when the need is to train, to encourage those long-term unemployed those families who in some cases have never seen a fully-employed adult in their household? Why would you not focus on training them, encouraging them, focusing on getting or breaking that horrendous cycle of long-term intergenerational unemployment, Jim Chalmers? I understand that your electorate on the south side of Brisbane between Brisbane and the Gold Coast, that Logan-Beenleigh area has a particular feature that has a real issue with long-term unemployed, some people call it intergenerational unemployed. Why would you be considering bringing in skilled workers from overseas when the need is to train, to encourage those long-term unemployed those families who in some cases have never seen a fully-employed adult in their household? Why would you not focus on training them, encouraging them, focusing on getting or breaking that horrendous cycle of long-term intergenerational unemployment, Jim Chalmers?
CHALMERS:
That is the priority, Steve. You and I have been speaking for some years now, from time to time, I get the opportunity to talk to you about why I'm involved in politics and growing up in Logan City. That issue that you've just rightly raised about intergenerational disadvantage, the fact that as a country, we've created a fair amount of opportunities over the years, but we haven't always been good at putting those opportunities within the reach of more people, particularly in communities like mine, so that is a priority, absolutely. And nobody is proposing that we think about migration as a substitute for training local people or creating opportunities for local people, in the first instance. Our priority is to make sure that as the economy creates opportunities, and we recover from the worst part of COVID, that we put those opportunities within more reach of more people. But in recognising that, there's a role for that, there's a role for training locals for opportunities, there's a role for childcare reform, but there is a role for migration as well. And so what we should be able to do, is not to see one or other of these policies as a substitute for another. We need to pretty much do all of these things at once, because we've got some big challenges that we need to meet. If we do it right, then I'm pretty confident that we can turn what is pretty low unemployment by historical standards right now, into something more enduring where people are getting not just the chance to provide for their loved ones, but decent wages growth, which has been missing for the best part of a decade. A good opportunity, so that every business in Australia that wants a good well trained enthusiastic worker can find one and every worker that wants a good secure, well paid job can get one, that would be the ideal outcome.
AUSTIN:
Isn't that wages growth happening now through the demand that employers, unless they up their hourly rate, they're not attracting the workers to them in the first place? Just let me give you, it's a poor example, but here in Queensland, we're hearing a lot of stories of former Qantas employees who, when the pandemic hit had to find other work, and they found work in whole other areas that they really enjoyed. And so there's a lot of pilots now working high-end mining equipment in Queensland. A lot of people who were working as stewards or stewardesses, who are now working in completely different fields, because they found the conditions and the wages were better. In other words, the wages growth is there, in the areas where employers said 'I have to pay more to attract them', why would you need to artificially boost or try and stimulate wages growth when it's happening through natural demand anyhow?
CHALMERS:
A couple of things about that. First of all, we want people to be able to move freely, to better opportunities and higher paid opportunities. So, that is typically a good thing. Some industries, we're seeing the beginnings of some wages growth. And again, if that wages growth is sustainable, that's a good thing too. But in aggregate, we've had almost a decade now of historically stagnant wages, even now, wages are at about 2.4 per cent on the last figures, which were below what the economists expected them to be. And when you compare that to what's happening in inflation, you can see that people are going backwards. So there is a really dire need to get that wages growth happening again in the economy, after all of those years of stagnation. We're not talking about doing anything artificial as you describe it, we're talking about it being sustainable and long-term in areas like the care economy. Aged care workers are not getting paid what they deserve, minimum wage workers deserve that pay rise that we argued for at the Fair Work Commission, because in aggregate, we've got that wage stagnation. And so some people are doing okay, we welcome that, we applaud that. We want people to grab those higher wage opportunities, but across the economy, it's still a big problem. And what's got a lot of the economists scratching their heads right now, is we've got unemployment at 3.5 per cent. We've got all these labour shortages, all these skills shortages in the economy. And we're still not seeing that broad-based very strong wages growth. And that says to me, and to a lot of other people who watch this objectively, that there's something structural going on in the labour market, whether it's the way that people bargain for wages, outcomes, whether it's putting these opportunities within reach of people. As we were just discussing, there is something going on, where even when the unemployment rate is low, which should be creating really strong sustainable wages growth, we haven't seen that right across the economy. And that's a problem that we want to address.
AUSTIN:
Let me ask you about something that looks puzzling to many of my listeners, the Commonwealth Bank announced a really healthy profit margin, I think 11 per cent above what the market sought. But interestingly, the Commonwealth Bank head pocketed a 35 per cent increase in his remuneration package, just under $7 million, but then had the cheek to warn of the wage price spiral if businesses are required to peg wage rises to levels of inflation- that almost seems comical if it wasn't real. How do you view that Jim Chalmers as the Treasurer of Australia, who's seeking wage growth?
CHALMERS:
Well, I think this idea of a wage price spiral is fanciful. I've said that in different ways. I've probably said that less bluntly than I just said it then, in the past, but the reason we've got inflation is not because people are earning too much. On the contrary, people haven't been earning enough to keep up with the skyrocketing cost of living. And so I see from time to time that people, particularly from the other side of politics, want to pretend that we've got all this inflation because we've got this wage price spiral. But that's rubbish, largely because wages growth has been well below inflation.
AUSTIN:
The only wage price spiral has been for the top end of town who've been making record profits and getting remunerated accordingly.
CHALMERS:
One of the issues that we've got in the economy is the profit share of income has been growing much faster than the wages share of income. We've identified that as one of the big challenges in our economy. In an ideal situation - and the reason why we want to bring people from all sides of this conversation to the Jobs Summit - is because in an ideal world, you would get strong profit growth, but it would be accompanied by strong and sustainable wages growth as well. We've seen profits growing very strongly, ordinarily that would be a welcome outcome but we're not seeing those gains as fairly shared as we would like. That's why we've got to do things in the labour market around bargaining and the like, to make sure that people are getting a fair share of that. But if you go back to wages and prices, the reason we have got this inflation, there's a big international component. There's also an issue around some of our supply chains and a lot of your listeners at the supermarket would see when they can't get something they want on the shelves that it says `we've got an issue with our supply chain'. That's a big challenge which is pushing up prices. And these labour shortages as well. So if we want to deal with inflation, the Reserve Bank will do its thing. We will do our thing on the supply side of the economy, but wages are not part of the problem.
AUSTIN:
What about at the top end of town? It's almost like the normal economic fundamentals are broken in some way?
CHALMERS:
I think there is a structural issue. And that is that, as we've seen this strong profits growth, it hasn't been accompanied by the same sort of wages growth. If you look at the last decade, for example, the constant has been weak wages growth, the variables have been how fast the economy has grown, the unemployment rate, all of that has changed. But the wage stagnation has not, so that says to me, and to a lot of people who watch this professionally, that there is a structural issue in the labour market. So what we need to do to get those wages moving again, we need to do something about minimum wages and we've played a role in that that we're proud of. We need to do something about wages in the care economy, which begins with aged care workers, and we're working on that now. But we also need to train people for higher wage opportunities. We need to make it easier for newer parents, particularly women, to work more and earn more if they want to. All of these sorts of things will get wages growing again, so we get a healthier balance between profits growth, which is welcome, and wages growth which would be welcome, but has been absent for the best part of a decade.
AUSTIN:
My guest is Federal Treasurer of Australia, Jim Chalmers. Let me reword my question. I think I've worded my question to you poorly. Are you at all worried?
CHALMERS:
I find that hard to believe Steve.
AUSTIN:
Not at all. I know you're joking. Are you at all worried that the big end of town like the Commonwealth Bank and Qantas at the time when they've had their hand out with one hand, have been making record profits with the other hand, and then argue that no one else should get assistance? Qantas argued against Virgin getting a handout. The head of the Commonwealth Bank today is warning of a wage price spiral while his wage went up thirty-five per cent. In other words, beyond hypocrisy at the top end of town.
CHALMERS:
Let me explain to you how I see it. My fear is that Australians who work their tails off - on many occasions across two or three jobs - have not been getting anywhere near the wages growth they need. And when they see other people doing really well, that that can be divisive. That doesn't reward people's hard work, when they think they're working around the clock, multiple jobs, trying to do the right thing by their loved ones. They don't want to be lectured by people who are doing really well. And so my fear, there's an economic challenge there around the relationship between profits and wages, a big economic challenge, and I've addressed that, but also potentially a social challenge in the way that we think about our society and our community. And one of the reasons why I welcome this opportunity to do this job for Anthony Albanese and for the country is because the ideal outcome here, the big objective for any treasurer worth their salt, is how do we work out how we grow the economy in a way that everyone benefits and not just some people benefit. The situation that you've just described is contrary to that and so of course it's concerning to me.
AUSTIN:
This all goes into a White Paper at the end of the process of the Jobs and Skills Summit. And how long before that filters out to the states and into government policy?
CHALMERS:
We should think about it two ways. So there's some things that I'm hoping we can find common ground on at the Jobs Summit that can be implemented relatively quickly. And there'll be some things that go into the White Paper and subsequent budgets. The reason we scheduled it before the first budget in October is because we wanted to be able to move quickly if there was sufficient common ground and there was an idea that could be implemented quickly. So that's why we've picked the timing. We're not suggesting for a moment that any good idea that comes out of this conversation in September this year has to wait for the release of the White Paper twelve months later. If there are things we can do in the near term, we'll do them. But there will inevitably be some issues that come up, which will take a bit more work. What I'm hoping to do at the end of the Summit is to release effectively two columns of work: one set of agreements and outcomes that we can progress relatively quickly and another set of outcomes that we agree to work up further.
AUSTIN:
Just before I let you go, are you surprised that the leader of the Nationals, David Littleproud, said he'll be there but the leader of the Liberals, Peter Dutton, says it's a stunt and he won't.
CHALMERS:
On Peter Dutton's role, I was disappointed but not surprised. I don't want to overdo it here on your show Steve, but he is a particularly divisive, destructive character. I mean, he's more destructive and divisive than Tony Abbott was. So his response was disappointing, but not surprising. But when I invited him, I said 'if you don't want to come, would you like to nominate somebody else from the Coalition?' And he said no. And then David Littleproud said yes. They've divided themselves in record time, and left Peter Dutton pretty isolated, if not humiliated. So we'll have David Littleproud. there. As soon as I heard that he was keen, I issued him an invitation., I'm led to believe that he's accepted that invitation. That's a good thing.
AUSTIN:
Will you let him speak?
CHALMERS:
We will work out how we do all of that. We haven't allocated speaking roles to anyone yet, but we'll be respectful of his attendance. I think it would have been good if Peter Dutton had accepted and we would have created a good place for him. And we'll do our best by David Littleproud as well. But we genuinely want this to be collaborative and constructive. I issued that invitation to Peter Dutton in good faith. He rejected it. David Littleproud accepted it and we'll make sure it's a proper opportunity for him to participate and the same goes for the crossbench and the Greens.
AUSTIN:
Jim Chalmers, thanks for your time today.
