03 Apr 2018

KIERAN GILBERT: With me now the Shadow Employment Minister Brendan O’Connor. Thanks so much for your time. Would you like to see Labor commit to increasing the acceleration rate of the superannuation guarantee so people will be putting more away?

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Look, I think that would be ideal. It’s an unfinished project of Labor to ensure that we have proper retirement savings for workers and also have national savings for the country. It’s certainly something we will be examining.

As you know, when last in government, Kieran, we sought to move the 9 per cent to 12. We only got to 9.5 per cent. But we will have to look at the fiscal circumstances. We will weigh up the budget and then make a decision. But it is certainly unfinished business, as I say.

GILBERT: Kelly O’Dwyer has told the Fin Review that increasing the rate would at this point would only reduce people’s wages further to that at a time when there has been flat wages growth. Is that really what you want us to do?

O’CONNOR: No, that’s why we have to consider the situation at the time of making a decision. Any Liberal Minister, or for that matter any Liberal member of parliament, will always find a reason not to increase the compulsory contribution to superannuation. In fact their record is they have never voted for any increase other than the 0.25 per cent increase that occurred in the last five years. But prior to that they have voted against every increase; didn’t support it. They don’t support this model, even though overwhelmingly it is supported by the Australian workforce. So I’m not surprised that Minister O’Dwyer would not support an increase at any time, quite frankly. They will find a reason.

GILBERT: In relation to your position on penalty rates, I saw the notice you put out in relation to the long weekend and people losing hundreds of dollars potentially in penalty rates over the long weekend and Easter. If you get to office after the next election and wages growth is strong and employment numbers are good both casual and fulltime would you reconsider that if it looks like penalty rates reduction have actually helped boost numbers?

O’CONNOR: Well firstly, there’s no evidence that cutting penalty rates had led to employment growth, in our view. That’s not the correlation. Secondly we’ve made a very unequivocal commitment Kieran, to return the ratio, that is the penalty rate, as it stood on the 30th of June last year.

GILBERT: So even if the evidence does emerge, the boost to jobs, you’d do the same?

O’CONNOR:  Well, firstly we don’t believe that the lowest paid workers in this country at a time of wage stagnation should be getting cuts to penalty rates, or cuts to their real income. Secondly, we have not seen, in our view, evidence to suggest there is a correlation between cutting hospitality and retail workers’ wages and increased employment growth. There’s no evidence to suggest that in our view. Also to ensure we don’t see growing inequality, we are not going to be supporting cuts to those wages.

GILBERT: But if you saw the evidence, if it showed there were more jobs because of that, it’s a tough call for you then.

O’CONNOR: It’s a hypothetical question, but as I say we have not seen evidence that if you cut wages – in fact what we see is an effect on aggregate demand, and adverse effect on consumption, a contraction of consumption of goods and services and in fact a contraction of the economy. The economy is not growing very well at all. Profits are up but wages are stagnating and that’s why the Reserve Bank is not going to increase interest rates any time soon. In many areas of our economy it is anemic and partly that’s due to the fact that people don’t have any money but have record household debt and stagnant wages. 

That’s why we have the Reserve Bank using its levers to ensure that we don’t see an increase in interest rates and we don’t see any - at the time when profits are doing well, productivity is going quite well, in some sectors very well - we don’t see any need to cut wages in real terms. And we certainly do support returning the penalty rates for those workers as it was on the first of July last year.

GILBERT: Just finally on the National Energy Guarantee, this ginger group, apparently it’s been going for a number of years in fact within the Coalition but still within Labor there are questions as to whether or not they are going to back the National Energy Guarantee which could provide finally some sort of bi-partisanship and resolution to this fractious issue of energy policy?

O’CONNOR: I think it’s always difficult firstly to engage with the government on this because they’re so deeply divided internally. The group to which you refer – the only reason it’s on the front page of the national broadsheet today is because they’re working with the journalists, they’re making sure that it’s known that they’re established not just to look at you know whether the government subsidises coal fire power stations, it’s about putting the Prime Minister on notice. 

Interestingly, what’s worse than having a former Prime Minister on the back bench, is having a former Prime Minister and a former Deputy Prime Minister on the backbench and this group of course is being led now by Tony Abbott and Barnaby Joyce. That’s the band that’s been put back together, Kieran, and the Prime Minister Malcolm Turnbull should be very concerned because of the instability and the efforts by this group to clearly indicate that they are willing to go after him and make things very difficult.

GILBERT: Brendan O’Connor, thank you for your time, appreciate it. Will talk to you soon.

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