ABC 774 Melbourne Drive 11/3/19

March 11, 2019


SUBJECT/S: Nationals chaos; Liberals deliberate plan to keep wages low; Labor prioritising wages growth; Labor’s consultative approach to business community; coal; election


RAF EPSTEIN: Jim Chalmers, I think, is back in Brisbane. I think he's off the plane. He's the Shadow Finance Minister, which means he's part of Bill Shorten's Shadow Cabinet. Thanks for joining us.




EPSTEIN: Thank you. Any response to Michael McCormack that Labor doesn't get the regions?


CHALMERS: Poor old Mick's having a pretty bad day, isn't he? That's why he sounds a bit unhinged, more than usual. That's because his colleagues are trying to chop him from the leadership. So up to him what he says. I'm not especially fussed by it.


EPSTEIN: I just want to have a listen to one of the Government's new ministers over the weekend. The Government have tied themselves up a little bit. It's economic orthodoxy to suggest flexible wages mean that people keep their jobs when the economy's on a downturn. The Finance Minister though stepped away from economic orthodoxy and kind of made it sound like low wages were deliberate policy. It's something that was put to one of the Prime Minister's new ministers, Linda Reynolds. She was asked about it on Sky by David Speers.


DAVID SPEERS: Do you agree with the sentiment that flexibility in wages and keeping wages at a relatively modest level is a deliberate feature of our economic architecture - to actually drive jobs growth?


LINDA REYNOLDS: No, I don't believe, no absolutely not. And for Bill Shorten to even suggest that I think shows a fundamental lack of understanding about economics.


SPEERS: Well, I'm actually quoting Mathias Cormann the Finance Minister here, Minister. Your colleague. He says that wages flexibility is "a deliberate feature" of our economic architecture.


REYNOLDS: Ah, that, he, he's absolutely right.


EPSTEIN: Certainly a rampant turn around, Jim Chalmers.


CHALMERS: (Laughs) It was pretty quick.


EPSTEIN: But the point remains doesn't it? If you have flexible wages, it keeps your unemployment rate down.


CHALMERS: When Mathias Cormann was asked about these record low wages we've had over the last five-and-a-half years, he said it was a deliberate design feature of their economic strategy. Yes, Linda Reynolds humiliated herself on TV yesterday, but she still agreed fundamentally that that was the case. It's a bit funny, it's a bit of a Muppet Show incident to see the way that she was tangled up in that interview yesterday. But the fact remains, the difference between the parties is that the Liberals want to keep your wages low and we want to see if we can increase people's wages. Because stagnant wages growth is a defining feature of an economy that's not working for ordinary people anymore.


EPSTEIN: OK, so if we can talk about how you might lift people's wages. I think we've got, what, eight weeks to go before an election. You still haven't specified what changes to laws you would make. There's a Fair Work Act that is essentially unchanged. That was passed by Kevin Rudd and Julia Gillard. Would you change that by legislation or by regulation in some way, to lift people's wages?


CHALMERS: I'm happy to come to that, Raf, but I don't think it's entirely fair to say that we haven't proposed concrete changes. Already, we've said that we'd restore penalty rates. We'd crack down on sham contracting, the rorting of skills visas. We'd stop labour hire being used as a way to drive down wages and conditions. All of those things are already announced. We've also said, and Bill gave an important speech on this last week, that we're concerned that the minimum wage is no longer a living wage. So one of the options available to us, which we are working through, is to make sure that the Fair Work Commission has the guidelines they need to ensure the minimum wage can be a bit more like a living wage.


EPSTEIN: Can I stop you on the Fair Work Commission, because I don't think this is clear. Would you set new rules for the Fair Work Commission using new laws, or new regulations?


CHALMERS: The option is there for us to legislate new guidelines for the Fair Work Commission if we'd like to, and we're working through that as we've been saying now for the best part of a week. The Fair Work Commission relies on guidelines which are set by the Government.


EPSTEIN: So if you want a different outcome from the Fair Work Commission, you need to change the law, you can't just use regulation.


CHALMERS: You can. The option available to you is to change the law, to change the guidelines. And that's something that we are having a very good look at, that we are working through, because right across the board we want to see what we can do to help people on low incomes, whether it's penalty rates, whether it's this issue, whether it's bargaining in the workplace.


EPSTEIN: Can I try to pin you down though, Jim Chalmers, because let me see if I've got this right. You seem to be saying that the best way to lift minimum wages is to change the law to give the Fair Work Commission a really clear instruction. Will you change the law?


CHALMERS: That's something that we're working through, Raf. As we've said repeatedly. They have guidelines that they rely on when they make these minimum wage decisions. They also rely on submissions made across the community, but also from the Government. We've said that we are working on ways to ensure that those guidelines that they rely on give them the best chance of making the minimum wage look a bit more like a living wage. 


EPSTEIN: Is that a commitment to change the law or not? Because that sounds like having it both ways.


CHALMERS: (Laughs) I don't know how many times I can say that same thing, Raf! This is something that we're working through. It's an option available to us.


EPSTEIN: Working through and having an option are not definitive.


CHALMERS: We haven't announced our position yet, Raf. I've said repeatedly that we are working on this aspect of it. We've already got a whole range of policies out there - penalty rates, sham contracting, labour hire, dodgy visas - all of those things, which are important measures to give Australia a pay rise. But we're also working through what we can do with the guidelines for the Fair Work Commission so that they take these issues into consideration. And we're also looking at the way to get the bargaining arrangements right so that workers and employees can bargain on a level playing field.


EPSTEIN: 1300 222 774 is the phone number. Jim Chalmers is the Shadow Finance Minister. I will remind you, Newspoll has Labor ahead for the 50th time, so the Coalition hasn't been in front in Newspoll since September of the election year in 2016. That means it is very likely that Jim Chalmers will be the Finance Minister. I'm glad you raised bargaining, Jim Chalmers. It's something else I'm not 100 per cent clear about. Under the law that exists now, a union can go out and negotiate across several agreements, across several companies, they can negotiate across a broader range, across more than one workplace. But they can't launch industrial action, as I understand it, across more than one workplace. Would that change under Labor?


CHALMERS: We haven't announced a position on all of those sorts of things, Raf. That's something that Brendan O'Connor, our spokesman, is working closely with Bill Shorten and others on - consulting with the unions, consulting with the business community to make sure that we can strike the right balance. But that is an important consideration. How do we get the bargaining right so that workers and employers can sit down and get to a good outcome, which recognises that wages growth has been stagnant, as you rightly said a moment ago? But also, we want to make sure that workplaces are productive, that they're profitable, that they can keep on employing people. So those are our considerations, we'll take a consultative approach. But we haven't landed our final position on some of the ins and outs that you've just mentioned.


EPSTEIN: So to not yet reveal if you're going to allow wider industrial action, and to not reveal if there'll be any legal change to the Fair Work Commission's rules, are you not leaving it a bit late?


CHALMERS: I don't think so, Raf. We're working through all these issues. I don't think anybody could objectively accuse the Labor Party of not having a heap of detailed policy out there well in advance of the election.


EPSTEIN: No, no, I'm only talking about this policy.


CHALMERS: We're working through it, Raf. As we're working through some of the other issues as well. We've made announcements as we go on industrial relations. Brendan O'Connor's done a terrific job of that, working with other colleagues. I don't think it's unreasonable that we take the time to get this right.


EPSTEIN: In the lead up in the dying days of John Howard's Government, there were extensive discussions, weren't there, between Kevin Rudd and Julia Gillard with the business community? They don't feel they've had the same sort of consultation this time. Would you agree, it's different this time? You're not telegraphing your industrial punches in the same way you did last time?


CHALMERS: I wouldn't accept that, Raf. I think we've got a lot of industrial policy out there and I've run through some of it on your show. And when it comes to business consultation, I spend most of my week each week, and I know that Chris Bowen and others do as well, consulting with the business community. We need to make sure that we don't just take the word of a couple of people who might be in the Financial Review from time to time. I think our relationship with business is good. It's consultative. I've certainly had probably hundreds of meetings with senior business decision-makers over the last two-and-a-half years, and if we do get over the line in May, I hope that continues.


EPSTEIN: What measure can I use, if my wage doesn't go up under a Labor Government? If I throw wage growth figures at you, for how long do you expect wage growth to continue as it has been? And when do you expect wage growth to change? One year in, two years in?


CHALMERS: (Laughs) Well I'm obviously not going to give you a date, Raf. Nice try.


EPSTEIN: Do you think first term?


CHALMERS: What we're trying to do is to make sure we can turn this around. We don't know how long it will take, it's a big problem. It's become entrenched under the Liberal Party. It would be irresponsible to say, you know, on this day on this date that things will turn around.


EPSTEIN: I agree. But if you're a voter who feels their wage growth has been stagnant, is it reasonable to expect that Labor will deliver significant wage growth in the first term, or do you have to wait two terms?


CHALMERS: My message to your listeners who care about wage growth is that the choice is between a Government which says that low wages are a deliberate design feature of the economy and their strategy, versus a Labor Party that listens and cares about this. We think this is the major problem in the economy. Not just for workers, but for growth itself.


EPSTEIN: But if it's a major problem, surely you can commit to substantial change in the first term.


CHALMERS: I don't think it's reasonable to nominate a date, and I'm not going to do that. What I will say to your listeners, and I think that they would understand this and appreciate this, is that we will make this a priority. We've got concrete policies already on the table to do it, and we're working through some of the other issues we've discussed at length this afternoon. That's because, in the Labor Party, we want to see responsible decent wage rises so that people can keep spending and investing and providing for their loved ones. The other side has overseen a period of time where every single quarter under this Liberal Government has seen wages growth lower than any other quarter since these records started to be kept in 1998. So that's the comparison point, and people can judge us on how we go as we implement our policies.


EPSTEIN: Just on coal, I think there are six coal mines in the seat of Capricornia that you visited, either under construction or under planning. Does Labor support them?


CHALMERS: We've said repeatedly that coal's part of the energy mix now.


EPSTEIN: Although I think that coal is for making steel, those six coal mines, the ones under construction in Capricornia.


CHALMERS: I beg your pardon.


EPSTEIN: I think the coal in Capricornia, those mines are for steel making, not for making electricity.


CHALMERS: Yeah, and coal's a part of our economic future. Our candidate in Capricornia is a coal miner, he understands obviously the pressures on the industry, the importance of the industry to the local area. We're not proposing to phase out the mining of either type of coal, because we know it's an important part of the economy there. Even as we transition to other, whether it's that kind of coal, or the other kind of coal, other sources of energy. 


EPSTEIN: You're going to win this, aren't you? Does anybody in Labor really doubt they'll win?


CHALMERS: We're not taking anything for granted, Raf. If you look at the work we're putting in, the policy work, the campaigning work, I think the message that people can take from that is we're not taking anything for granted. I personally think that the election will tighten up again as the Government wheels out their kind of predictable scare campaigns.


EPSTEIN: Is the Government a genuine chance of winning the election, in your mind?


CHALMERS: They are a chance of winning the election. We need to make sure that we get the message out there that we can't have another three years of cuts and chaos and division and dysfunction. That clip you played before about McCormack and Barnaby Joyce into each other. That's just the tip of the iceberg in terms of the division on their side. So we need stability in Government, because for every moment that they keep taking potshots at each other, the economy's floundering and people are struggling. So there's a lot at stake. We don't take any outcome for granted. We saw the polls today. You don't need a poll, you just need to walk down the street in almost any community in Australia right now to know that people are unhappy with the Government. But we need to convert that into support for our agenda.


EPSTEIN: Thanks so much for your time.


CHALMERS: Thank you Raf.