JONES:
The Prime Minister's on the line. PM good morning.
PRIME MINISTER:
Good morning.
JONES:
A comment on London's triumph?
PRIME MINISTER:
I want to congratulate London. Good luck to them. They obviously fought a spirited bid. It's a wonderful city and I'm sure they'll do the games proud in 2012 and particular congratulations to Tony Blair who I know worked very hard for his country. As the Prime Minister of a country that held the games in 2000 it's an enormous privilege to have your country host the games. It brings everybody together as we all came together wonderfully in 2000. And I wish the British well.
JONES:
President Chirac? Have you got any message for him?
PRIME MINISTER:
Oh no. Well I mean, I wasn't in the contest. I don't want to give advice. There's no point in - Paris of course architecturally is far and away the most beautiful city in the world. I don't think anybody doubts that. But you need more than, I mean you need a whole lot of things to stage a wonderful Olympic bid. And I'd be the last person to sneer at Paris as a city. I think anybody who's visited that place continues to be awestruck by its beauty.
JONES:
All right. PM, on industrial relations you've made much of the fact that since 1996 real wages have grown by 14%, 1.6 million jobs have been created, the proportion of the working age population holding jobs is now at a record high and at just over 5% the jobless is at a generational low. Now in spite of that, you're asking workers to engage in what one editorial described yesterday as an unnerving engagement with wholesale change. If we've done all that so well, why are you changing the system that's produced those results?
PRIME MINISTER:
That's a very fair question and I'll answer it this way. We're doing it because you can't assume that the good times will continue without further reform and further change. The good times that you speak of, we enjoy now, are the product of changes we have made, particularly over the last few years. But it is always the case with an economy that unless you keep making changes which are designed to produce greater strengths and deliver greater productivity in the years ahead, you will lose the prosperity which is currently being enjoyed. I know it's very easy for people to say, 'Oh look John, why don't you just leave everything as it is? It's going well.' And it is going well. But I want to keep it going well and the only way we can keep it going well is to find new ways of making Australia more productive, more efficient.
JONES:
So that being the case, why have you allowed the union movement to be first out of the blocks, parading you as an agent bent on destroying the wellbeing of the workers? Because as you would concede, many workers are convinced that extra profits, they're thinking of the banks, come at the expense of jobs and wages so the unions....
PRIME MINISTER:
In fact Alan, extra profits are the foundation of jobs and higher wages.
JONES:
I'm talking about the perception of the workers.
PRIME MINISTER:
Well not all workers are like that. JONES:
Well the banks of course have got big profits, but look what they've done, closed the branches and...
PRIME MINISTER:
I accept that. I accept that companies have done very well. But you ask why have we allowed the union campaign to get out of the blocks. I'll answer that question. It was inevitable that the negative campaign would get the first headlines. You propose a reform - the same thing happened with the GST. We proposed a reform and people said the world would come to an end. Mr Beazley, who was opposition leader then said that there could well be a melt down in Australia on the 1st of July 2000. Well there wasn't a meltdown in Australia. The sun came up, the world went on, the prices of everything didn't go up by 10% and people suddenly discovered gee, all that fear mongering was wrong. So it is with these changes. But you cannot stop people running a fear campaign. The ACTU is running an advertisement many of the listeners have seen of a lady with a sick child saying well look you can't sack me because I've got to look after a sick child. Can I just say to your listeners that under our changes, you won't be able to do that. Of course you won't be able to do that because it will be an unlawful termination of somebody's employment to sack somebody because of family responsibilities. That ACTU advertisement is completely and utterly inaccurate.
JONES:
When a worker enters an enterprise of individual agreement, can you confirm to those who are listening now that their basic protections will remain and their benefits won't be reduced?
PRIME MINISTER:
Well they're basic protections will be guaranteed in law. That is they will have to be paid the hourly rate determined by the relevant award. They will have to be given annual leave, they'll have to be given sick leave, maternity leave and so forth. Their superannuation is delivered in legislation and their holidays are guaranteed as well. Now as for the rest, that will become a matter of negotiation. If they are already in an agreement, then that agreement will have to terminate and then they could go into another agreement. They also, of course, have the right to be covered by an award. We're not abolishing the award system as has been implied and suggested. A worker will have the right if he's applying for the first time for a job to say to the employer I would rather be covered by the award than go into a workplace agreement. And then it becomes a matter of discussion between them as to whether its the award or the workplace agreement. If it's the workplace agreement, subject to the minimum that I've outlined all the other terms and conditions are matters of negotiation. If the employee wants somebody to bargain on his behalf, be it a trade union official, a family member or somebody else, he or she will have a legislative right to have somebody bargain on his behalf. Now that is essentially how the system will work.
JONES:
Okay, well let me just ask you this 'cause you've been in this for 30 years. But I mean, the Industrial Relations Commission has been virtually denuded of its powers. You're going to have a Fair Pay Commission?
PRIME MINISTER:
Yes. The Industrial Relations Commission will be left predominantly with the responsibility of settling industrial disputes.
JONES:
So in terms of minimum wages and so on you're going to have a Fair Pay Commission. Now out there those who are being stirred up into a frenzy are saying fair to whom? Because...
PRIME MINISTER:
Fair to the country.
JONES:
Right okay. But fair to whom because on every occasion in recent times, because we're always saying okay real wages have grown by 14% since 1996. But the alarmists would say, and the critics, the Government has been in there on every occasion opposing wage increases.
PRIME MINISTER:
No we're dealing here with the minimum wage and bear in mind that the level of the minimum wage can have an impact, depending on the economic circumstances, an impact on the possibility of some people who are now unemployed getting a job. The thing you've got to look at Alan is not so much the minimum wage. That's important as a guarantee. The thing you've really got to look at is what people are actually paid as a result of the bargaining process that goes on in the workplace and the real story of the Australian economy over the last nine and a half years is that its been so strong that employees have been able to bargain for and obtain much higher wages than would have been the case if we'd have had a weak economy. You see at the end of the day, no matter what industrial relations system you have, it's the strength of the economy which ultimately determines how many jobs there are and what wages people receive. So therefore you've got to try and build an industrial relations system that strengthens the economy. And that's why we're making these changes.
JONES:
See I just don't understand though why the Government, I mean no one's a stronger advocate on these things than you are; but I was reading the other day that the National Centre for Social and Economic Modelling has got a model out which demonstrates the strongest growth since 1996 in private incomes, has occurred in low income families. Why isn't the Government out there arguing that?
PRIME MINISTER:
Well Alan, I often do that. But that is the result of the Family Tax Benefit.
JONES:
The public are not being told that are they?
PRIME MINISTER:
Well maybe they're not being told it. I mean, you can always. If I didn't need sleep and I could be on a programme like your 24 hours a day, I mean, I might drive the listeners mad I'm sure but if I could, I would do it. Now sure we can always explain things more, but it is true that the low income people, low income families with children have done better under this Government than any other section of the community and that is because not only have their wages gone up and their interest rates come down and their taxes come down, but on top of that, the Family Tax Benefits have been loaded in their favour.
JONES:
Well I had a teacher ring yesterday and he tells me that under the changes, well he's been told, his state award will be transferred to a federal award and he's concerned that he will lose a range of benefits, or they won't be equal to what he receives now. What do you say to him?
PRIME MINISTER:
Well I would say to him that that's wrong. Because I would say to him that a teacher, I mean certainly, we propose to have a national system. That is absolutely right. But there is absolutely no reason equally why his employer, which will continue- presumably be the Department of Education, why his employer wouldn't agree to continue his existing conditions. Now why wouldn't he? I mean you know, if he's got a beef it will be with his employer and the employer is the New South Wales Labor Government.
JONES:
Righto. OK,so just simply, you're arguing for a single unified workplace relations system?
PRIME MINISTER:
Yes, because I believe the modern economy requires it.
JONES:
Okay, and of course for people investing overseas and everything, it's all too complicated for them to be able to navigate their way through several systems.
PRIME MINISTER:
And also for many firms now that operate nationally.
JONES:
But if states can't be persuaded, is this going to be tied up in the courts?
PRIME MINISTER:
Well that's a matter for the states, but any significant change is, often in the federal system, the subject of a constitutional challenge. There's nothing unusual about that.
JONES:
So will this be a dogfight in the courts for some time?
PRIME MINISTER:
Dogfight is perhaps a little melodramatic.
JONES:
But when are you going to get it through?
PRIME MINISTER:
The Government's intention will be to present the legislation as soon as it's been prepared and I expect that to be some time not later than early October.
JONES:
Right. Now there are Senators from Queensland and Western Australia in your own party, Coalition, saying they mightn't vote for it. That Liberal Senator from WA David Johnston said he may vote against the Government's reforms unless the central plank, namely the taking over of state industrial relations systems is dropped.
PRIME MINISTER:
Well Alan, I won't comment on that publicly. We will talk these things through in the party room. Bear in mind that the best guarantee of a permanent change for the better for Australia's industrial relations system is to get the changes in as soon as possible. Have them bedded down, people see that they work for the benefit of the country and the benefit of workers as well as employers and then nobody, Labor or Liberal in future, will want to change it.
JONES:
Okay. You're a New South Wales politician before you're a Prime Minister. You only became Prime Minister because you were elected to the Parliament from New South Wales.
PRIME MINISTER:
No I'm an Australian before I'm anything else.
JONES:
Okay, good on you.
PRIME MINISTER:
No this is quite an important point. I've never felt any particular parochial loyalty above the loyalty I have to the entire country.
JONES:
Okay point made. But how can we continue with a Grants Commission formula which sees New South Wales, that's us, people listening to you - taxpayers sending $13b in GST to Canberra revenue each year, but getting only $10b back in grants. Will you meet with Premier Carr to try and work out a better way of divvying up the GST pie?
PRIME MINISTER:
Alan, if all of the Premiers agree to use a different method of dividing the pie.
JONES:
Which they won't.
PRIME MINISTER:
Yes, well hang on. I'm Prime Minister of the entire country. I'm not Prime Minister of New South Wales. I owe the same obligation to Australians living in Western Australia as I owe to Australians living in New South Wales.
JONES:
But Queensland generates $6.7m of the GST revenue and gets $7.7m back.
PRIME MINISTER:
Can I put for the purposes of discussion the Queensland response?
JONES:
Yeah. I know what the Queensland response will be but go on.
PRIME MINISTER:
You came from Queensland. Queensland is a decentralised state and the cost of providing basic services in Queensland is higher than it is in New South Wales. The second thing is that the tax base of New South Wales, because of a larger concentration of higher value properties yields higher returns of stamp duty per capita than it does in other parts of the country. There are a whole raft of reasons. But look Alan, I have no particular addiction to the present system of carving up the pie and I have always said; I said it as Treasurer when the argument used to be that Western Australia and Queensland were getting too much money at the expense of New South Wales. I used to say then 'look fellas if you can agree on a new formula, then we'll agree to divide it up according to the..'
JONES:
Yeah well one bloke's getting more lollies than the other. He's not going to give any back.
PRIME MINISTER:
Well he's got to have a fight with the blokes who he reckons is getting the more lollies. I mean, we provide the pie. You know what they want us to do? They want us to provide all the money so that everybody's happy. Now it's not quite as simple as that.
JONES:
Okay, I'll let you go. Thank you for your time. We'll talk again soon.
PRIME MINISTER:
Okay Alan. Thank you.
JONES:
Prime Minister of Australia John Howard.
[ends]