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Transcript of interview with Kim Landers: ABC Radio AM: 21 December 2015: penalty rates; industrial relations; Malcolm Turnbull's plans for a 15% GST on everything; Liberal Party's politicised Royal Commission

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SUBJECTS: Penalty rates; Industrial relations; Malcolm Turnbull’s plans for a 15% GST on everything; Liberal Party’s politicised Royal Commission

KIM LANDERS: Brendan O'Connor is the Opposition's spokesman for Employment and Workplace Relations and he joins us now.

Brendan O'Connor good morning.


LANDERS: If you were at a major shopping centre yesterday it was very much business as usual people doing their groceries, sitting at cafes, buying Christmas presents.

Hasn't Sunday work become such an inherent part of the job that it doesn't need to be paid so much more?

O'CONNOR: The weekends, of course, you see many, many people either in shops or you see them in restaurants, cafeterias but when most of us are either shopping or dining with friends or family. We of course have millions of workers who are providing services to us to the majority and we believe, that is Labor believes, that those people should be rewarded for the time away from home, time away from kids, grandparents, parents. That's what the penalty rates reflect.

LANDERS: Well the Productivity Commission is not recommending the abolition of the Sunday penalty rate its draft report simply suggested bringing the Sunday rate into line with the Saturday rate.

For example a casual worker in the fast food industry gets a 175 per cent loading on a Sunday and a 150 per cent penalty on a Saturday that Saturday rate is still pretty good isn't it?

O'CONNOR: For so many workers it will mean a cut of up to 10 per cent of their income. This is an attack on the lowest paid workers in Australia, retail and tourist workers, hospitality workers. These people do not receive large amounts of money and as you just heard this will be a big blow to the household budget for millions of Australians.

Let's not think that if the Liberal Government were to move on this they won't move on to public holidays, they won't move on to shift allowances, they won't move on cutting the minimum wage. This is about a step process, this Commission was of course, was undertaken by the Government to focus on lowering conditions.

I mean you made the point that you're talking about there's different penalties between Saturday and Sunday but the Government's concluded the only way that should operate is that it goes down.

LANDERS: Well the Employment Minister Michaelia Cash has already moved to pre-empt some of your criticisms. She says that any changes to penalty rates will solely left up to the independent Fair Work Commission don't you have faith in the Commission?

O'CONNOR: Well I have no faith in the Government. The Minister doth protest too much. This Government has been talking about cutting penalty rates for the two years since it's been elected. They want to see a reduction. Let's just remember we have the lowest wage growth in 20 years, some sectors are experiencing a wage recession.

We have increasing evidence of widespread under payment of wages, the 7/11 and Pizza Hut and Myer examples and yet the Government is focusing on cutting conditions of employment.

This Commission is only in place and its recommendations are only in place because of the terms of reference were written by the former treasurer and the former employment minister.

LANDERS: Well you say that the Government - sorry. You say that the Government is focused on cutting conditions but again the Minister says that any changes to Sunday penalty rates wouldn't be cut without a mandate from voters at the next election. Is that guarantee not good enough?

O'CONNOR: See the problem for the Liberal party is that they have bad form when it

comes to industrial relations. They made no mention of Workchoices before the 2004 election.

I don't expect this Government to be honest with the Australian people when it comes to this issue. But they have set up a Commission that has gone directly to recommend cutting conditions of employment for hospitality and retail workers.

We also believe this would be the first step to moving on penalty rates for nurses, paramedics and the like. The problem is with this government, with the Turnbull Government you cannot trust them with employment conditions and this is at a time when wages are lower than any time.

That is wage growth is lower than at any time in the last 20 years so it's a bizarre focus when you see people not getting real growth in terms of wage outcomes when you're having people struggling to make ends meet.

With a government that at the same time is looking at imposing a tax on goods and services.

LANDERS: Well any change to GST I'd like to point out is not yet any government policy but let's just stick with penalty rates for the moment.

Groups advocating for these changes say that it could create tens of thousands of jobs and help grow the economy.

O'CONNOR: Well it could also lead to a contraction of the economy. The idea that you will see profits that is money coming from labour costs shifted to profits that therefore will lead to employment growth is not borne out by the evidence.

What you could see instead is in regional Australia the money instead of being in the hands of workers who spend them on goods and services will be taken in the form of profits and taken out of that community.

You will see profits of larger companies going off shore, in fact you'll see an impact on aggregate demand in our economy in other words, people will stop spending because they'll have less money.

That will have an adverse impact on the economy and that can lead to a contraction in employment. The idea that somehow if you cut wages you lead to better employment growth is not borne out by the evidence.

LANDERS: If I can take you to another topic and that is the Trade Union Royal Commission final report is due to be handed to the Governor General by December 31st are you anxiously awaiting its release?

O'CONNOR: Not at all. We've said from the outset this is a political exercise and it was

of course an attempt to smear the opponents of the Government.

LANDERS: What do you think it's going to say?

O'CONNOR: Also that we take any serious allegation about misconduct as an important matter to be referred to the police. But let's not be under any illusion, this process has been politicised by the Government.

It hasn't for example looked at other practices by employers or employer bodies; it's been focused purely on unions.

But in the end I believe we will be vindicated and those very few isolated matters will be dealt with but they would have been dealt with without spending $50 million or $80 million of tax payer’s money.

LANDERS: Okay we wait to see the outcome of the report. Brendan O'Connor thank you very much for speaking with AM.

O'CONNOR: Thanks very much Kim.

O'CONNOR: And that is Brendan O'Connor Labor's spokesman for Employment and Workplace Relations.