13 Apr 2018

DAVID SPEERS: He’s not the local member but he holds the neighbouring seat. He is the Shadow Minister for Employment and Workplace Relations Brendan O'Connor. Thanks very much for joining us here in Broadmeadows. 


SPEERS: There’s a lot I want to talk about. Just on the train funding, the rail funding that the Prime Minister has announced today, $5 billion. We heard him say that he hadn’t actually spoken to Daniel Andrews before the announcement. Nonetheless, this is something I’m sure the Victorian Government would like to do. What do you think?

O’CONNOR: Look, investing in infrastructure in this state is critical. Let’s be honest the federal government has been underdone here so we certainly welcome-

SPEERS: In Victoria you mean?

O’CONNOR: In Victoria compared with other states. In terms of per capita investment Victoria has been - there’s been underinvestment as announced by the federal government. So I firstly say for someone who is a local member in this region, this part of Melbourne it is a fantastic, important announcement. We want to make sure-

SPEERS: So Labor would go ahead with it if you win?

O’CONNOR: Firstly I’d like to hear what the state government says. But it’s always been a priority and I think the federal government could have handled it a little better in terms on consultation.

SPEERS: Pick up the phone?

O’CONNOR: Pick up the phone instead of finding out at 12 past midnight. But nonetheless it’s a very significant amount of money and I’m sure the state government, as they have already indicated, will want to engage with the federal government. And federal Labor will examine it. But we have been saying there hasn’t been sufficient investment by the Commonwealth in Victoria in relation to such types of projects.

SPEERS: It would tick that box. And when it comes to the infrastructure spends we do have a body called Infrastructure Australia that draws up priority list that is meant to take the politics out of it a little, not that I think you can ever take politics completely out of infrastructure decisions.
Where would it fit do you think in terms of priorities? What about high speed rail between Sydney and Melbourne? There’s a long list of projects.

O’CONNOR: I think firstly it’s been something that’s been called for by many people in Melbourne, in Victoria, for a very long time. The airport is growing exponentially. It’s becoming an even increasingly important hub.

SPEERS: Anyone who has flown in or out Melbourne will know that drive can be a shocker to a city.

O’CONNOR: I think there’s room to grow the airport. We’ve had a problem with congestion between the airport and the city. And of course Melbourne is growing faster than Sydney at the moment, so we do need infrastructure like this. It’s not my portfolio area per se, but I’m very keen to see more investment. It means more jobs, it will mean more efficiency in terms of productivity. It’s a productivity enhancing type of announcement. So in broad terms we welcome it but I’d like to hear what the state government has to say because they have the job to do, along with the Commonwealth, in working out the detail.

SPEERS: Let’s look at what is going on in this part of Melbourne because it is representative of this change, this transformation in industry and manufacturing in Australia.

O’CONNOR: Yes, it is.

SPEERS: Eighteen months ago Ford ended car making here. We’ve seen that in Adelaide with Holden, Toyota at Altona and so on. A lot of dire predictions back then. Some even said we’d have a recession, thousands and thousands and thousands of jobs will be lost. Eighteen months on how wold you describe what has happened?

O’CONNOR: I’m still concerned about the future of the components industry, automotive parts sector of the economy. I think the government has made some attempts in terms of a plan, small scale. I think our position is better in investing in an Advanced Manufacturing Future Fund of $1 billion which would provide access to finances for many of the companies to which you referred earlier. 
So there’s a long way to go yet and there’s still a concern that some of the companies won’t find the supply chains now that the car manufacturers have left. And governments should be aiding and abetting and assisting and enabling these companies to recast themselves.

SPEERS: There was more than 120 different auto suppliers that were around, I don’t know how many are still around now.

O’CONNOR: I’m sure some have hit the wall, and that happens when there is structural change in a particular industry. Government have a very important role. Our role should be to create the environment in which good companies can innovate and grow and recast their business and that’s what has to happen here. We just say with respect to the federal government there’s not enough investment or industry policy. We’d ask them to look at our announcement in terms of accessing finance.
The industry, AIGroup and others have said that there needs to be better access to finance for some of these companies. They have difficulties getting loans. We would like to see that future fund established so that they could either have concessional loans or equity investment and so that would provide more opportunities for them to grow. 
But you’re telling a good story and I just want to congratulate Sky News for coming out to this place.

SPEERS: I won’t interrupt you there.

O’CONNOR: Well I just say this: too often these areas are neglected publicly, quite often. It’s really important that we shine a light not only on the difficult issue but on the opportunities. And there is an optimism around some of the stories that you refer to. We should remind ourselves that we’ve got some good stories to tell out here

SPEERS No, look you’re right. It’s all doom and gloom when a big change happens like car manufacturing coming to an end. You do start to see some green shoot 18 months down the track, which is positive. But the message from a lot of people here today has been energy costs, particularly in manufacturing it’s a real problem. And they are imploring all sides of politics to sort this out. I mean, what do you say to the criticism of Labor’s plan for much deeper emission cuts, higher renewable energy makeup, that it’s only going to push up power prices.

O’CONNOR: I think we need to be sensitive to power prices. We need to have a medium and longer term goal. We can’t just be responding to electoral cycles when we are dealing with something so significant. I think Labor has got the balance right in terms of making sure that we, one, want a mix of energy sources, and two, need to invest in the future and future technologies and that of course includes renewables.
It is hard to engage with the Government because there is an internal fight within the government about its own particular policy. So you’ve got the Minister for Energy seeking to outline a position and then of course there’s internal disquiet within the government. That makes it very difficult even for the Opposition to engage. You’re asking for the Opposition to engage and reconcile differences with the Government when the Government has to reconcile differences within itself.

SPEERS: I’m just wondering whether Labor needs to rethink some of its plans for like 45 per cent emission reduction instead of 26-28 per cent which is the government’s Paris commitment.

O’CONNOR: Well Bill Shorten and Mark Butler have indicated very clearly we’re happy to sit down and work with the Government. I think we were sending that  message now-

SPEERS: Including that emission target?

O’CONNOR: Well, I think we need to certainly fulfil our international requirements and our obligations-

SPEERS: Which is the 26-28 per cent.

O’CONNOR: Yes, and we also indicated before the Prime Minister and the Minister for Energy outlined their NEG option that we wanted to sit down with them.

SPEERS: Do you think Labor should be willing to negotiate on that 45 per cent emissions cut?

O’CONNOR: I think that the public expect us to find certainty, and certainly businesses both large and small need greater certainty for their energy supply-

SPEERS: So that’s a yes? You think that Labor should negotiate?

O’CONNOR: I am not going to concede a particular point. I am saying that there is a willingness of Labor, David, to sit down with the government and try to find a growing consensus around this area, providing the government speaks with one voice. That’s one of the political difficulties that the government has-

SPEERS: But 45 per cent is not set in stone, is it?

O’CONNOR: You have heard what Bill Shorten and Mark Butler have said-

SPEERS: But I am asking as someone who represents this area-

O’CONNOR: I want to be able to say to businesses in this area – I only live 15 minutes from here – that we have a plan that means whatever happens in the electoral cycle, they have certainty about the supply of energy. At this point we can’t say that. But I think both major parties-

SPEERS: We can’t with Labor saying they will double the emissions reduction.

O’CONNOR: We do think that the future for energy supply certainly has to increasingly include renewables. I think that’s the global consensus. That’s not to say that you jettison other forms of energy – you don’t do that – and we have said that we should have batter access to a domestic supply of gas, for example. We have said that as well. So we have a set of policies that we think are credible, and we are very happy to talk to the government about that.

SPEERS: Maybe even gas exploration here in Victoria?

O’CONNOR: Again, I am open to some of those areas, I think we should be looking at some of the options available.

SPEERS: Well, federal Labor has been more positive about that.
Now, another big input cost for any major manufacturer or any major company is labour costs and staff. Today, we have seen the ACTU suggest a change to allow sector-wide bargaining again in Australia, so that you would not just have an enterprise negotiation, you could bargain right across the – well I was going to say car making sector, but that no longer applies – so for example I think Sally McManus was talking about the child care sector.


SPEERS: Is that something Labor is interested in?

O’CONNOR: Well, firstly, I think it is important to note that there is a provision to bargain for low paid sectors pursuant to the Fair Work Act. There is a low-paid bargaining stream that exists now. To date, that has not worked very effectively, insofar as there have not been any outcomes. That has been a provision that really has not realised its ambition.
So what I have already said, and I said this months ago when we were looking at examining areas of change that I said we would look at, that we would look at the low-paid bargaining stream. We are up for that. There are some employers who have said that they find it inefficient when dealing with small workplaces to deal with employees one-on-one, in industries that should have an industry floor.

SPEERS: What does it mean in practice? Say, cleaners are a low-paid job – they would be able to bargain as a sector?

O’CONNOR: Well, at the moment it would mean that the Commission would play a more significant role in setting a floor for an industry, or low-paid group of workers. 

SPEERS: But she is talking about the ability to take industrial action as a sector.

O’CONNOR: Well, that’s what they have put. We have not accepted that proposition.

SPEERS: So you think it’s a good idea?

O’CONNOR: Well, I think it’s worthy of discussion – all of these things. I think it’s important to note this – we have growing insecurity, low wage growth, high profits, and relatively decent productivity, but not-

SPEERS: So is this the answer?

O’CONNOR: No, the answer is to listen to the unions and the employers and for Labor through that negotiation process to get an outcome that is fair-

SPEERS: Just to be clear on this, you are open to looking at what the ACTU is saying-

O’CONNOR: Of course we are.

SPEERS: -but you are not convinced it’s the best way forward?

O’CONNOR: What we have already said – what I have already said, before today’s reference in the media – is that multi-employer bargaining is already an existing provision for some areas of the labour market. I am happy to examine others. I think we should look at what works. I would also like to hear from employers because again, there are other countries around the world that have a great manufacturing base, for example, a high-skilled workforce, low disputation, but they have industry bargaining.

SPEERS: Would you want to see a situation where across the building sector everyone could down tools because one workforce is trying to get a higher-

O’CONNOR: This is the thing about bargaining, there is a quid pro quo to some extent. When you are talking about industry bargaining, you are also talking about what role the Commission would play. Whilst some might want to have unfettered access to disputation, as I heard Sally say on radio today, she just wants to see a decent wage increase.
Now, we will see what has been proposed. We will talk with the unions and the employers. But, it can’t be counter-productive.

SPEERS: You would not want to see a situation where the whole building workforce can down tools?

O’CONNOR: We want to see productive cooperative workplaces. We want unions and employers to work with the next Labor Government on dealing with the future of work. We want to deal with automation, artificial intelligence, robotics, I mean there are so many complicated-

SPEERS: Sure, but you don’t want to see a whole sector shut down?

O’CONNOR: No, I want to see, I’m answering your question David, co-operation and consensus about growing our economy, lifting wages, lifting growth-

SPEERS: This is a pretty simple question Brendan O’Connor. If you were the Minister, would you want to see a whole sector being able to shut down?

O’CONNOR: Well I can tell you this, I am not going to negotiate through any television program, even yours David. What we want to see is-

SPEERS: It’s a simple proposition though.

O’CONNOR: What we want to see is, we want to make sure that we have a system that is fair for working people, fair for employers, and leads to good wages and good outcomes.

SPEERS: But how is it fair for a good employer, if they have done nothing wrong, and then because of a dispute on another building site, the whole thing shuts down?

O’CONNOR: No-one is suggesting that. That has not been put to me. No-one has put that to me. 

SPEERS: Isn’t that sector wide bargaining?

O’CONNOR: No-one has put to me they want to see the closing down of industry.

SPEERS: And you don’t want to see that?

O’CONNOR: Of course we don’t want to see that. We want to see outcomes that are fair for workers and employers. At the moment, we have seen enterprise bargaining falling as a proportion of the workforce, and more people relying on the minimum awards, so we are seeing wage stagnation. One of the reasons is that the system is not working as it should be, and we need to do better. I’ll engage with unions and employers about getting the best possible system that will facilitate those outcomes.

SPEERS: Brendan O’Connor, we have to move on, but thank you for having us here in your neighbourhood.

O’CONNOR: No, thank you for being here David. Thank you.


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