SUBJECTS: Growth figures, penalty rates, 18C, APVMA relocation.


DAVID SPEERS:  Here with me in Canberra is Joel Fitzgibbon the Shadow Minister for Agriculture and Craig Laundy, the Assistant Minister for Industry, Innovation and Science. It is a very good afternoon to both of you.


SPEERS: The heavyweights. Exactly, exactly, well you are not here for your looks.


SPEERS: The growth figures today, these are pretty good figures Joel Fitzgibbon, are you giving the Government any credit?

FITZGIBBON:  They are pretty good figures, I mean another consecutive quarter of negative growth would have put us officially in recession; something the former Labor Government survived and managed to avoid throughout the Global Financial Crisis.  So we welcome them, it is good news.  I note that the greatest contributor was household consumption and that indicates that potentially people are spending their savings, which may in turn reflect very very sluggish wages growth.  Good news.  We’d welcome a few more quarters of positive growth.

SPEERS:  Craig Laundy, you’d know a bit about this from your business background, when will wages’ growth start to pick up?  Company profits, record growth, but wages are still flat.  When do they spend some of that on the poor old worker?

LAUNDY:  When inflation does.  So the wage decision happens each July and looks at the cost of living we’re in right now.  It is convenient to argue one half of the story.  There is real wage increases happening.  They may be small but they are increasing real wages. 

SPEERS:  Just.

LAUNDY: Yeah, the cost of living is so low.  And that’s why interest rates are so low.  What the wage umpires are deciding is, when they make their decision each July is, they look at their basket of goods, but the interest rates are a consideration in this, if you are paying less in interest you have more disposable income afterwards and that is inflationary in and of itself – they are considering all these metrics they make these wage decisions.  They are very complex.  The good thing is real wages are growing.  Yes, only slightly, however – wage growth is only 1.8 – 1.9 per cent.   But CPI is sitting between 1.5 and 2 per cent when the Reserve Bank target rate is between 2 and 3.

SPEERS: It’s still not there yet.

FITZGIBBON:  But Craig, you accuse me of only dealing with half of the equation, the thing I didn’t mention of course was very strong company profits.  So we have a situation now where a company is doing well and that is a good thing, no regrets about that, But Malcolm, the Prime Minister is still sticking to $50 Billion tax cuts to big business…

SPEERS:  It’s a fair question do they all deserve…

FITZGIBBON:…taking penalty rates away from them…

SPEERS:  Just on companies, do they all deserve the company tax cut?

LAUNDY:  But you are saying there, what Joel is saying,  is you are talking about listed companies that have been reporting in the last quarter.  Well first we are talking about one quarter, ok?  So let’s not get too excited – well let’s hope it continues.

FITZGIBBON:  Well I could say that about the growth figure.

LAUNDY:  No, the annual growth rate is 2.4.

FITZGIBBON:  The quarter is not the annual figure.

LAUNDY:  But it is a quarter of the first financial year. You are talking about a quarter’s results. You are talking about, they are listed companies.  They distribute to share-holders off the back end of that; and the share-holders pay tax . And I said this last time I was on your show David – they pay tax at their marginal rate.  So there is this misunderstanding about taxation in this country – it is complex.  But the reality is, we said – the Commonwealth Bank for example - this is driven predominately by the finance sector and the mining sector at the moment – so let’s not forget that – because there are plenty in the economy who aren’t  seeing that growth, especially in the SMB space , which is not included in those figures.  So there is a long way to go but there are good signs – Joel’s right – there are good signs.

SPEERS:  There are, there are.  If wages’ growth is something that has obviously not picked up yet, is now the time to cut those Sunday penalty rates?  What’s your view on this Craig Laundy?

LAUNDY: Look, I can obviously talk from my background. There has been a lot of discussion today about will this create jobs.  I can tell you inside my family’s business today , that we don’t open sections of our business on Sundays and Public Holidays because of the wage rate .  We open them on Saturdays.  Now should the rate in the hospitality sector be made the same, which it wasn’t by the way for casuals, which my family’s workforce is, ok, so no change for us.

SPEERS:  Was there a little change for casuals? No change?

LAUNDY: No change in the hospitality sector for casuals.  My father will be keeping those parts of the business, predominately bistros, closed on Sundays and Public Holidays. 

SPEERS: Why not make them part-timers because they…

LAUNDY:  Here’s something that has been missed and I think they missed across the board.  If you look at the permanent and part-time decisions – the decrease is greater in all of those than in the casual side of things.  Now I think what the Fair Work Commission, and this has been absolutely missed, we have had a trend since the GFC in this country and Labor know, and so do I, I agree with Labor on this, towards casualisation of the workforce. 

SPEERS: …[interrupts] …

LAUNDY: If you work in the hospitality industry, my family have to make the decision to make workers or offer them full or casual..

SPEERS: And would you?

LAUNDY:  It is obviously up to my family, but you need the flexibility on Sundays still.  Sunday is a hit or miss day.  The other problem that gets missed in all of this is you change the way you not only staff your business but you change the way you market your business.  Like my family’s business does not want to be busy on a Sunday, they spend nothing on marketing or resources,  they wouldn’t put entertainment on for example, or what have you, because if you drive the trade you drive the wages needed to service the trade.  And the mix is too high.

FITZGIBBON:  But you have just indicated that the decision whether or not to open Sunday or Sunday evening is a complex one, that there are many parts to that equation – you have just conceded yourself. Now there is nothing wrong with the profit motive.  The very basis of the concept of enterprise and entrepreneurship, at the end of the day your family will make a decision based on the bottom line.


FITZGIBBON:  So what you are doing is shifting from the lowest paid workers in the country the burden – putting the burden on them to enhance those profits.  Now even if you could make an argument on that David, even if you could make an argument about that, and I don’t accept it , you can’t do things retrospectively.  You can’t tell someone on $500 a week that they are now going to get $450 a week.  These people live from pay packet to pay packet.  You can’t just retrospectively ..

LAUNDY: We’re not opening. You’re talking about businesses who aren’t opening.

FITZGIBBON: You can’t remodel the economy by driving wages down to third world rates. 

LAUNDY: You’re talking about $36-37 dollars an hour.

FITZGIBBON: That’s lazy ruthless policy.

LAUNDY: Joel that’s not true. You are talking about businesses that are currently closed. But David the other part that I think has been missed in this, since 1904 in this country, penalty rates have been arm’s length and independent of Government and the Labor Party, are they seriously saying that they are going to go to an election with a platform that they are going to change and intervene in what has been an independent market for 112 years for good reason?

SPEERS: That’s a good question.

LAUNDY: They could then go to the next election and say, we are going to increase penalty rates as a part of our (inaudible).

SPEERS: And why stop there, why not the minimum wage? Why not every decision the Fair Work Commission takes have the Government run a ruler over it, stick your fingers in and do what you want?

FITZGIBBON: Employers are entitled to make an application to the Commission and that’s what has happened here and they got the result they were looking for. I think what is unique about this case, like no other held before the old industrial umpire right back to almost Federation is that money is being taken off people. Sure we have had lots of debates about how far wages should rise, that’s the usual conversation, but this decision is one that couldn’t be anticipated and none of us ever believed the Commission would take money away from people.

SPEERS: So your legislation would simply say, if there’s a cut, then the Government intervenes…

FITZGIBBON: I will leave it to Brendan O’Connor and others to work out the legislative instrument but the principle here is that people should not lose money.

LAUNDY: The precedent is a very dangerous one.

FITZGIBBON: Here’s the good news, McDonald’s is doing better, you know Barnaby is relocating the APVMA to Armidale and senior staff are now working out of McDonald’s in Armidale?

SPEERS: You’ve long been critical of the move to get the veterinary medicines authority shifted to Armidale.

FITZGIBBON: They are issuing a new menu by the way which will include the pork barrel burger.

LAUNDY: McDonald’s, and to pick up on Joel’s point, to be fair dinkum about it, McDonald’s and their employees are on an EBA, so they don’t have Sunday penalty rates.

SPEERS: They certainly don’t have the 200 per cent Sunday penalty rate but that has already been negotiated.

FITZGIBBON: The majority of people are on an EBA, this brings in the question and this idea from you and others that this is going to give a miracle boost to the economy.

LAUNDY: To the SME sector it will, those who aren’t on EBAs small and medium sized business, they have exemptions from being involved in the bargaining process because it is complex and expensive. They don’t have the ability to be in the EBA space.

SPEERS: If it were possible to give those workers affected a tradeoff increase in their base rate of pay during the week or whatever it is, would that be okay? So there was no net loss, no disadvantage.


SPEERS: If you’re working not as part of a unit, at a big McDonald’s or Coles if you’re working at a small, or as you said the SME you can’t do that?

LAUNDY: You can, you can pay above award whenever you want.

SPEERS: The worker I’m talking about, it would be great if the employer came along and did that. Would it satisfy all of your concerns?

FITZGIBBON: The Labor Party is the father of enterprise bargaining. It was the Labor Party that argued we needed more flexibility and we said let’s allow people to trade some benefits off for others. That’s much different from unilaterally taking money away from someone without in any way compensating them for it, a much different concept.

SPEERS: Let me move on, 18C and the Racial Discrimination Act. Craig Laundy the Parliamentary Committee yesterday was unanimous in its recommendation. That recommendation was essentially a range of options for the Government to consider whether to keep words like offend, insult and humiliate in the Act. What’s your view on what should happen now?

LAUNDY: This has obviously been brought back into the spectrum because of a couple of well publicised cases. There are no doubts serious questions about the actual process involved here. Do I think we should be changing the law? I’m not going to change my position. I have been strong on this for four years. No, but is there, and Julian Leeser put together a very good piece on this internally. A working piece which is released as a press statement overnight. Is there a need that the cases that have been highlighted, and the likes of those get knocked out, so any vexatious complainers or a case with no merit gets knocked out quickly and cost effectively. We should ensure the changes to enable that.

SPEERS: And your position is well known and long held. Some of your colleagues, and I don’t need to name them all, are adamant that Australians want to see this changed. What experience do you get in Western Sydney on this issue and what do you say to your colleagues about the sort of reaction, if any that you do get on the street?

LAUNDY: I speak candidly with my colleagues and obviously the profile of my seat and seats in Western Sydney demographically and culturally are very different to.. it’s all well and good for a Senator to be extremely ideological on this. They don’t have constituents. Joel and I are in the Lower House and we have constituents.

SPEERS: What did Keating call it? (Inaudible)

LAUNDY: It’s my job to see that and work inside both the party room and in conversations I have with my colleagues and just explain what it actually looks like on the front lines and what people feel when we have these discussions and that’s what I attempt to do.

SPEERS: I’m sure you’d agree with all of that?

FITZGIBBON: Craig and I are on a unity ticket obviously. A good point is made about the nature of our electorates. We are all in part creatures of the communities we represent and we are not talking much about 18C much in the Hunter Valley, but it is a serious issue and once we set a standard on hate speech, etcetera, we’re not going backwards David.

SPEERS: On that note of unity, we’ll have to leave it there. Craig Laundy and Joel Fitzgibbon, good to see you both. Catch you again soon.


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