PRIME MINISTER:
I’ve just been, as you heard on AM, talking about strong economic growth and the performance of the economy - faster than any G7 economy.
JOURNALIST:
Prime Minister, you talked about what the Fair Work Commission was considering now on penalty rates and the possibility of a phasing so workers’ take home pay wasn’t cut. Will the Government be putting a submission into that phase of the Fair Work Commission for consideration?
PRIME MINISTER:
They’ve asked us in the Fair Work Commission report to provide advice on the application of take home pay orders and we will do that. It is a very technical area as you’d see. It is Chapter 11 of the report. It considers it and there are a number of ways of ensuring, as is the objective of modern awards that when awards are changed the employees, workers take home pay is not reduced.
The Commission indicates that they favour a phasing over a number of years. They suggest two years which when modern awards first came in, as you would recall in 2010, they had a five year phasing and the idea there is that because pay is increasing every year, the impact of reducing the penalty rate on the overall pay-packet is offset by the rise in wages. And that is clearly an objective of modern awards. It is an appropriate objective. And we certainly welcome transition arrangements that mitigate as far as possible, or offset the impact on the take home pay-packet.
JOURNALIST:
What do you make of Eric Abetz’s suggestions? Is he becoming the new workers friend?
PRIME MINISTER:
Well, I haven’t seen the remarks but just to summarise - and I just made these points on AM - but there are basically three ways they canvass it.
One is a take home pay order which basically says that an employees pay packet can’t be reduced and that effectively allows the penalty rates to phase in.
Another way is just to phase them in over a period of years which is what they have done in the past.
Another one which they indicate they are not in favour of is red-circling. So that would mean if you had an employee that was under the old, being employed now for example, their penalty rate would stay the same but new employees would come in under the new penalty rates and they suggest that would be impractical.
Now this is a very complex area.
This is why you have a Fair Work Commission, I might say, which is an expert body that makes decisions like this. This is one of the reasons why you have an independent umpire and one of the reasons why it is important that this is a decision by the Fair Work Commission and not by the Government.
This is a very complex area and one that, you know, the Fair Work Commission is comprising five experts in the field, getting submissions from other experts, will certainly provide the submission that they have sought. And as far as mitigating or offsetting the impacts so that take home pay is not adversely effected as far as possible – that is an object of modern awards and an object that we certainly welcome and support.
JOURNALIST:
The rationale for reducing penalty rates in the first place is that small businesses in particular might be able to hire more people. Is that a concept that you support?
PRIME MINISTER:
Well, that is the whole rationale of the Commission and I might say that the argument that is being put and was accepted by the Commission was that you would get more employment, tens of thousands of more jobs. So there would be, more cafes and restaurants would be open. More employees would be working as opposed to owners. That was certainly the case submitted by the employers and the small business representatives and it is one that was accepted by the Commission.
I just should note that the Commission is chaired by Mr Ross, a former official of the ACTU and all of its members were appointed by Labor governments.
And until Mr Shorten did this extraordinary backflip, an abandonment of over 100 years of Labor Party principle and said he would not support the decision of the independent umpire. Until January, he had made it article of faith, again and again and again that these matters should be decided by the independent umpire and that he would support their decision.
So he’s shown that he has no consistency or integrity on this.
JOURNALIST:
Prime Minister, do you support though that rationale?
PRIME MINISTER:
What rationale is that?
JOURNALIST:
Of the Fair Work Commission -
PRIME MINISTER:
There’s no question, well, the evidence seems to be very strong, that if you have lower rates on a Sunday or a public holiday, then there is more incentive if you like, it’s more affordable for businesses to employ people. That’s common sense. But that’s one consideration and it has to be balanced out.
I mean, clearly the ability of businesses to employ people is related to the cost of employment. That’s always the trade-off.
Unions do this all the time. As you know, the majority of workers in retail are working on penalty rates that are lower than those the Fair Work Commission has proposed because they’ve had their penalty rates traded away and reduced under deals done by unions. And so this proposition that the penalty rates that are currently in those modern awards can never be varied is contradicted by the almost universal practice of trade unions, including of course, Mr Shorten’s union the AWU, in trading them off.
JOURNALIST:
With the death of a worker at Barangaroo, the CFMEU has talked about the ABCC legislation saying that stopped unions being able to access work sites, there’s been more injuries as a result of the legislation. Is it appropriate to point to Government legislation so soon after a death? And are you concerned about the different union attacks on the Government, now this one as well as the penalty rate attack?
PRIME MINISTER:
The CFMEU has shown through a long, long history of lawlessness and ruthlessness that they will say anything and do anything to be able to continue their operations, their mode of operation which basically involves defying the law, standing over employers, standing over contractors, standing over small business people.
There are well over 100 officials of the CFMEU before the courts for breeches of industrial law.
Now what we have done and they are so unhappy about it is that we have put the tough cop back on the beat. We’ve restored the rule of law to the construction sector. They did everything they could. They spent every dollar they could to back Bill Shorten at the election and since then because they didn’t want the rule of law restored.
Well, we have done it and we got it through the Senate and many people thought we couldn’t. So we have delivered that and that is why the CFMEU are unhappy.
As to the death, that is a tragedy. Every industrial accident is a tragedy and our condolences and sympathies go to the family.
JOURNALIST:
You decided you are not going to Mardi Gras. It’s in your electorate Prime Minister, Mardi Gras, but you’ve decided this year you are not going?
PRIME MINISTER:
I go most years. I’m not going this year - I will be interstate on other matters. But Lucy and I have been strong supporters of Mardi Gras and the major sponsoring organisations for many, many years.
JOURNALIST:
Prime Minister will you be making a submission to the Fair Work Commission about the transition of these penalty rates? Will the Government actually be putting in a submission about how it can be done?
PRIME MINISTER:
We have been asked in paragraph 2019, Chapter 11 of the report to make a submission on how take home pay orders can be applied.
Again, it is a complex area.
The Minister has asked the Department to prepare, naturally to prepare the submission that would assist.
But how the Commission protects low paid workers – workers covered by these awards – in this transition is a matter for the Commission. A very important point.
But the objective set out in modern awards which is that when you do get a change of this kind, take home pay, overall take home pay is protected, that is one that obviously we agree with. But how it is actually done, whether it is done with a take home pay order, whether it is done by a phase in over years which is what the Commission has done in the past and what they appear to favour - that is a matter for the Commission and of course, they’ll get submissions on it. I referred to –
JOURNALIST:
So you’ll be arguing for no reduction on overall take home pays?
PRIME MINISTER:
I referred to this on Monday when I quoted from Jennie George’s letter to The Australian. She makes that point - a very experienced former President of the ACTU as you know - she makes that point that the transition is very important. The Commission has got to manage it, but the object is - as set out in all the modern awards – that when changes like this occur, the overall pay packet, take home pay for employees should not be effected. Okay, thanks very much.
[ENDS]