Ross Greenwood speaks to Tony Shepherd, former president of Business Council Australia and Head of the government’s National Commission of Audit, about the union movement has launched its largest national advertising campaign.
Ross Greenwood: Great to have your company here on MoneyNews right around the country. Plenty to talk about this evening and I’ll tell you what, it’s going to be interesting just to see where we go. Of course we’re on the 12th of March 2018. Monday, 12th of March. The year is getting on very, very quick. One thing I want to talk to you about tonight are wages and campaign that is now being undertaken by unions, you could argue on behalf of the Labour party in regards to wages and whether people are or not. It really smacks to me of being another mediocre campaign. But really in many cases, information is being put out there that is not true, in many cases information is being put out there that well as being massaged at best. In other cases it appears to me as though people and businesses are being set up to take the fall, effectively for what has been the government another’s, not being able to get through a simple message. Now the union have decided to attack workplace laws, a smack of work choice all over again.
I’m going to take you first up in the lead up to the 2011 election or rather 2007 election campaign, I should say. Of course, the anti-work choices ad leading up to this. Have a listen to that one.
Women speaker: Hello. Oh, hi Mr. White.
Male speaker: The Federal Government is scrapping unfair dismissal laws for 3,6 million workers.
Woman speaker: No sorry, I can’t. I’m rostered for tomorrow’s night shift.
Male speaker: If you think that you and your family are safe.
Woman speaker: But, who’s going to look after my kids?
Male speaker: Think again.
Woman speaker: You can’t sack me. Really?.
Announcer: Authorized by Greg Combet, ACTU Melbourne.
Ross Greenwood: All right that was the ad then. Now think about today. That circumstances in that ad can it really happened? Of course, it can’t because you’ve got the Fair Work Commission there which rules against unfair dismissal. Was that because of that campaign that they’re pointing on that we have to fair? No, it’s going to be there anyway. Let’s now go to the ad that the ACTU has launched over the weekend.
Male Speaker: How does it feel when big business has too much power?
Daughter: Mom, the company is making a huge profit. Here I am being pushed into labor hire. They forced me into casual work, I don’t even know if I’m working next week. Just don’t know what I’m going to do.
Mother: I know, it’s not fair.
Male speaker: Australia can do better than this. It’s time to change the rules.
Ross Greenwood: Your calls on this, 131873. But if you’re a worker and you are, say, a casual worker who wants full-time work, I want to hear from you. If you’re a person who works casually and you do so deliberately I want to hear from you. If you’re a Boss and you employ full-time and casual workers or whatever the mix is, again, I want to hear from you, to hear the stories from the workplaces that were. Because there’s a few things here, this is part of the campaign to trying get people’s wages higher.
Now there’s nothing wrong with people asking for a pay rise of the unions for that matter. Nothing at all. Except for a few things, if you go back and yo go to the Australian Bureau Statistics, you’ll find between 1999 and June 2005 average wages on an annual basis work consistently above 3% a year. Between June 2005 and March 2009, the mining boom period, the average Australian wages excluding bonuses, get this, grew by more than 4% a year. Now it wasn’t until after March 2013 that wages fell to below 3% a year, latest stats from the Bureau of Statistics shows average annual wage growth 2.1%. Close to inflation.
There was no word from the ACTU at that time, back in 2005, 2007, 2008, urging restraint all the people’s wages should frozen or cut. Some of that period was under a Labor government, of course. All we’ve got was that scare campaign you heard there about work choices. In June last year, the minimum wage decision from those on minimum wage’s rights under awards was up by 3.3%. More, if you think about it, than what the average wage grew so on minimum wage it’s up 3.3% to $22.20 an hour. The Fair Work Commission has found so that minimum wage under awards $694 a week. Now Australia’s minimum wage is right now amongst the highest in the world. The OECD says if Bill Shorten’s idea of a living wage comes to fruition, we would have the second highest minimum wage behind France.
Let’s just pick up Bill Shorten here talking about our goal being a real living wage.
Bill Shorten: Our goal should be a real living wage, effectively raising the pay of all Australian particularly the 2.3 million who depend upon the minimum rates in the awards. This is my vision for our economy. Grow the economy, increase the productivity and fairly distribute the rewards. Effectively jobs growth and wages growth, prosperity which works for everyone.
Ross Greenwood: We need more prosperous companies to create more growth, to get more wages, except it seems to me as though Bill Shortens idea is really putting the horse before the cart. What he actually wants is higher wages on companies before the economic growth and before the productivity improves. Then you go to the next part about this with Sally McManus who is the National Secretary of the ACTU. She continues to say that a third of major companies don’t pay any tax. She said about working Australian, they’re sick of a third big business not paying tax, they’re sick of watching CEO bonuses going up, company profits going up while their own pay falls behind basic living cost. Hang on, wait on, but a third aren’t paying tax. If most of those companies don’t pay tax, they don’t pay tax because they don’t make any money. They lose money. Her idea is that companies that lose money, we should make them more competitive by forcing to pay higher wages. That don’t really help them make more money, paying more company tax, won’t it?
The other point about companies that don’t pay tax which Sally McManus said is such a terrible thing, and it would be great if all companies make profits and pay taxes but they don’t. You’ve seen the rate of retailers been going on broke for the past years? Well, it’s this. Sally McManus effectively saying that they have tax office, all those good people who’re working at tax office don’t do their job properly. She says because she claimed a third of big companies don’t pay tax and in her mind, it’s clearly wrong. Is the tax office somehow is incompetent because big companies find a way to pay no tax? The companies has paid little or no tax have either have massive losses in the past, or they’ve invested significantly in giant projects, that means they don’t pay tax until their income exceeds the depreciation written off each year. Guess what? The same company that applied the giant companies are exactly the same rule that apply to you, working Australians. If you invest in plant or equipment, think your laptop or work vehicle, you write it off and reduce your tax. If you lose money, negatively gearing a property, you reduce your tax.
No matter what, politicians like Bill Shorten has never run a business or Sally McManus who’s only view of business is the end of the picket line. No matter what they tell you there is not one law for big companies and then for you or me. The whole thing does smack of another Medicare campaign, design to win votes despite an obvious mistruth. The sooner that’s called out the better it would be.
I’m going to take your call very shortly on permanent full time workers or casuals. We’ll trying to find out exactly how that works but in the mean time let’s bring in the former president of the business council of Australia and the head of the government’s national commission of audit. A man is not afraid to speak his mind, Tony Shepard. Hello Tony, how are you?
Interview with: Tony Shepherd, Former President of the Business Council Australia
Tony Shepard: Good day, Ross.
Ross Greenwood: In regards to this whole idea that somehow Australian should get more pay from companies that a third of which don’t pay tax currently, seems to almost have a lack of logic in it, to my mind at least anyway.
Tony Shepard: It’s crazy. It’s crazy. These people must genuinely believe in the father of Christmas or the magic pudding or something. I mean, it’s just a nonsense. They’re trying to create a problem when there is not a problem. Fair Work Australia was established by them, it was revised by them when they were in government, tighten even further. They appointed most of the commissioners. This is their judge that they’re criticizing now, this is their independent judge that they’re criticizing. I find it just unbelievable. It’s just inconceivable. The union-
Ross Greenwood: The Fair Work Commission, let’s remind people, sets the minimum wage. The Fair Work Commission basically is the industrial umpire and oversees any of the workplace agreements that come through. The Fair Work Commission also makes ruling on unfair dismissals. There’s a range of powers that if anybody is, say for example as in the ad, “I can’t get enough work. My boss– I don’t know if this is legal, puts me off or something like that.” That goes straight to the Fair Work Commission.
Tony Shepard: They can and they do. It’s a monotonous regularity at times but it happens and they do. There’s a small proportion of employers that don’t do the right thing and good luck to the employees if the umpire make decisions in their favour. That’s good. That’s a good system. But to complain about that system being unfair is. absolute and complete rubbish.
Ross Greenwood: Let’s go to the point because it seems to be politically opportunistic and you’ve to go to call it that because ultimately people will believe this. That is if you consider say for example what Bill Shorten was talking about the so-called living wage. Which he wants to be the minimum wage, 60% of the average wage in Australia, which is a big, big jump.
It would mean that Australia’s minimum wage is the highest in the western world– the highest in the world. The point is that Australia lacks competitiveness right now. He wants productivity improvement. Well, you don’t necessarily get improved productivity simply because you pay people more or you force companies to pay people more.
Tony Shepard: That is nonsense. This is just like those people are thinking borrowing to pay a more amount of people, build up your national debt and you can go on forever. I don’t know what they believe in. They believe in the Sugar Plum Fairy or something that’s going to end up paying for all of this stuff.
The wage, we have got very high wages. I don’t mind that. I like people to be paid as much as we can but frankly, we’ve got no productivity improvement. As you say a lot of companies are losing money.
The other thing in all of this stuff that really gets up my nose is what about small business? Small businesses that is going to be stuck with all of this stuff. Big business in some respect can pass this all like a challenge. Small business and medium business, they’re stuck in the middle, what are they going to do? They have up or they have reduced profitability or they have to employ less and less people.
The impact on small business with this sort of rubbish is absolutely amazing.
Ross Greenwood: Therefore, we’re talking about not people who are incredibly well-heeled. We’re not talking about people who are in emerging capital cities in big corporate offices. We’re talking people who are going out there each day each week and ultimately may be paying their staff well before they pay themselves.
Tony Shepard: Exactly. That is ridiculous. These are people who spend a day a week to satisfy three hungry levels of government. One impose more and more regulation on them. Unless we’ve got big families have ironic frankly. That’s just impossible. Now the union say let’s get into them. They’re not like go higher. The don’t want independent contractors. None of that, by the way, has got any bigger over the last decade, at all. They don’t want the occasional jobs.
That’s 25% for the last 20 years. That’s just nonsense. That’s just rampant scaremongering. The problem with the union’s are, they’re smaller. Much smaller but they got a lot of money. Like with pinch points in our economy. I may have got of the scaremongering campaign now, which just touches the nerve of people and people can come up with examples that might beat particular cases. The majority of Australians aren’t members of unions for one reason. They don’t need to be. That’s why they’re not. That’s why trouble % in the private sector aren’t members of the union. They don’t need them.
Ross Greenwood: Did you notice today, Bill Shorten. You’ve done a study on his for the National Commission of Audit and I’ve noticed that just asked me whether I can ask you about this. What do you think about the immigration argument right now also? Because one issue about immigration argument which Bill Shorten is now proposing, it is that we should be looking at capping the number of people coming into the country. The reason for that is because the country can’t cope with more people, housing is unaffordable, all of this.
I hear this all the time and it makes my blood boil because the fact is and dismiss one of them, basically ignore the fact that Australians are getting older, insist on a level of healthcare and social security in their retirement years and there are not enough young people in work paying taxes to basically cope with that. That’s pure mathematics, pure and simple. If we don’t have more population coming in of the taxpaying age, who can work, then ultimately what happens is that your standard of living at retirement is going to diminish rapidly.
Tony Shepard: Absolutely. We’ve got about five people working now for every retiree. Five people to support one retiree. By 2050, even with the current rate of immigration, it will be two and a half people working to support one retiree. That two and a half will have to produce as much as the five just to maintain their current standard of living. Lots of luck guys, lots of luck. That is not going to happen.
Ross Greenwood: That’s the reason. That’s is the pure argument, pure and simple as to why you need to keep the immigration rate high. That’s the reason why you got to build the cities and build the infrastructure because otherwise, people’s standard of living in retirement will diminish.
Tony Shepard: The reason like Sidney is got like it is, we got an infrastructure. No roads, no new railway lines what have you. We’re catching up with the backlog that we should have been doing. We can’t have population growth without a commensurate improvement in the infrastructure. That requires investment and state governments have got to keep that pressure on. Look great with regionalization and moving people to the north laws good idea or it’s a good idea to make new immigrants particularly those with their own skill live in Northern Australia in areas where we need labor.
That’s a compact I think when you’re when it comes to skill migration, we try to fill gaps that our education and training system, Lord knows how much money we throw at it every year. It’s not producing the goods. That’s why we have skilled labor coming in from overseas and our education system where we’re spending billions, we have training system we’re spending billions aren’t producing the people we need.
That’s not the fault of the employer, that’s the fault of government.
Ross Greenwood: Because government tends to throw money where there’s a problem and doesn’t throw ideas, where there are problems, turn each other but it’s always been such.
Tony Shepard: It is. They throw the money around like Australia money for a drunken but they aren’t having a bloody look at what the problem is and where the money should be spent.
Ross Greenwood: Tony Shepherd I’ve got I appreciate your time as always. Former president of Business Council of Australia, the man who wrote the National Commission of Audit for the Australian government. Much of which still sits on the shelf to this day as well. It shouldn’t, it should be out there and dusted off and used as a blueprint for the way in which Australia forward. Tony Shepherd as always, appreciate your time. Your call is up next 131873.