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Transcript of doorstop interview: Coburg, Melbourne: 30 June 2018: penalty rates; company tax

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SUBJECTS: Penalty Rates; Company Tax.

BRENDAN O’CONNOR, SHADOW MINISTER FOR EMPLOYMENT AND WORKPLACE RELATIONS: Thanks very much for coming today. As we know, tomorrow we are going to see further cuts to penalty rates as a result of the failure of the Turnbull government to stamp out the cuts. This is the second 1st of July where we see cuts to pharmacy workers, retail workers and hospitality workers. And, indeed, we are going to see further cuts next year as well if we do not stop this decision.

Now, last week, the leader of the Opposition, Bill Shorten, introduced a private members bill to effectively stop this adverse decision hurting 700,000 or more than 700,000 workers in this country. Unfortunately, the Turnbull government has chosen not to support the Opposition’s legislation to stop the cuts. As a result, from tomorrow, we see further cuts to retail, hospitality, fast food and pharmacy workers. We’ll see retail workers have a further cut to their penalty rates of 10 per cent and 15 per cent for casual, for hospitality workers, we are going to see a further 10 per cent cut and we are going to see a further 15 per cent cut to the penalty rates for pharmacy workers.

Now we are here at UFS Pharmacy. I am here with the CEO, Lynne McLennan, who has committed this important business to not cut penalty rates. We want to applaud this business for doing the right thing for its workers and thank Lynne on behalf of the company for doing the right thing. What is not fair is if employers who want to make sure they look after their staff have to compete against those businesses who have a legislative change or decision by the Fair Work Commission which allows them to cut wages in real terms. Now, at a time when wages are falling in real terms in some sectors of the economy and the lowest wage growth in more than 25 years, it really is unfair that we see cuts to real wages.

Now, you can compare what happened last week. Labor introduces legislation to stop cuts in real wages for workers; the Prime Minister Malcolm Turnbull introduces legislation to give himself a $7000 tax cut. A $7000 tax cut for millionaires, wage cuts for low-paid, hard-working Australians isn’t fair, and for that reason we need to do better. We need to see a government that cares about millions of workers in this country who are struggling to make ends meet. At a time when costs of living pressures are rising, pressures to make ends meet are acute, people are having difficulties paying the mortgage or paying rent, putting food on the table, paying for school fees or school uniforms, just the basic essentials, increasingly, people are having difficulty dealing with. I might just call upon Lynne if I could to say a few words about the business’

decision to look after their staff in their business. I’m happy to take questions after that. Thank you.

LYNNE MCLENNAN: The board of directors of the UFS Pharmacy group unanimously decided over a year ago not to introduce the penalty rate reductions. We feel really strongly that businesses that prosper in the current century are businesses that look after our staff. If we don’t look after our staff, how can our staff look after our customers and our members?

JOURNALIST: What sort of penalty rates are you paying on a Sunday, and why is it that you can afford it when some other businesses say they can’t?

MCLENNAN: Different industries have different standards of profit. Pharmacy has been a very difficult industry to work in the last few years. There’s been a lot of cuts prosecuted by the federal government. However, we’ve invested heavily in our staff and in our businesses, and we are very viable today as a result of that. Investing in staff, I think that’s the key. A lot of our staff have family responsibilities, they’re part time students, they actually rely on the penalty rates to be able to live, and they should be rewarded for having time spent away from their families.

JOURNALIST: So what sort of penalties are they receiving?

MCLENNAN: Well, it depends on the particular award, but it is up to double time on a Sunday. And we scrupulously pay to the award at all times.

O’CONNOR: OK, thanks Lynne. I’m happy to take questions.

JOURNALIST: Why was there so much sensitivity within Labor that Bill Shorten’s decision on company tax cuts earlier this week was seen as a captains call?

O’CONNOR: We made that very clear, you saw Bill Shorten, accompanied by the Shadow Treasurer and Shadow Finance spokesperson come out and make very clear our position on tax relief for businesses. And as a result of the decision made yesterday, you will see 99.8 per cent of businesses having the same tax relief, going in to the next election, or indeed better for those who choose to access the Australian Investment guarantee if we were to win the next election. So we are very happy with the decision we’ve made.

We’ve always stood up for small businesses and wanted to provide relief. The decision that was made yesterday just ensures that we extend that to those companies with a $50 million turnover. For those companies up to 10 we made a decision internally, as Bill has made very clear to extend to 10. But after listening, Bill Shorten and Shadow Cabinet made a very swift decision to extend it to $50 million turnover.

Now, by way of contrast, we have the Prime Minister not listening to the Australian people and continuing to provide billions and billions of dollars to multinational companies, to big banks; to companies quite frankly who are either highly profitable, who do not deserve to see money stripped away from social services, health and education and given to those companies, much of which will go offshore.

So can I say, we have a very clear position now. Bill Shorten made very clear yesterday that he listened to what people had to say. We affirmed the decision yesterday that we would provide relief and we clarified our position in terms of a threshold and that would be businesses with a turnover of $50 million or less.

JOURNALIST: Was he responding directly to concerns within those by-election areas over the comments to put taxes up?

O’CONNOR: Firstly, let’s be very clear, we’ve always supported tax relief for small businesses. In fact, over 90 per cent of businesses in this country are small businesses and we’ve made commitments to support them and provide such a relief.

The decision then was how much further we go. Quite frankly a $10 million turnover is a fivefold increase to what was once the definition of small business. I think it was a reasonable position for us to consider. And that was the point that Bill made during the course of the week.

After Shadow Cabinet yesterday we clarified that and as Bill said himself, a political leader should listen and then act. We listened, we acted swiftly. Our position is now very clear - for those pieces of legislation that have been legislated and implemented, we will not change.

We will provide certainty for all small and medium enterprises insofar as tax is concerned. We’re also making it very clear, we will never support the tax plan that has been articulated by Malcolm Turnbull to give billions and billions of dollars, much of which will go overseas to foreign shareholders. To the big banks who are highly profitable and frankly, given what we are seeing now each and every day in the Royal Commission, not deserved of increases.

Let’s remember, this is about choices. If we provide billions of dollars to those companies, we’re going to have to strip that away from social services.

I’ll make a very clear point of contrast. Bill Shorten wants to make sure that $17 billion goes into schools and Malcolm Turnbull wants to see $17 billion go to big banks. Is that fair? We don’t think so and that’s why we’re very comfortable with our position and we will continue to argue that up until the next election.

JOURNALIST: So what is the mood in Shadow Cabinet then considering that he had to change his mind and is there any threat to his leadership?

O’CONNOR: Well firstly, Bill is absolutely going to lead us in to the next election. He has the total confidence of the Caucus and the Shadow Cabinet. He made a very swift decision yesterday after consultation. Unlike of course Malcolm Turnbull who spoke against a Royal Commission in to banks 24 times. He had to be dragged kicking and screaming to even have a Royal Commission into banks. Now within the first few weeks of hearings we have seen the litany of disasters and scandals that the banks have been engaged in. Yet Malcolm Turnbull, former merchant banker - you know you can take Malcolm Turnbull out of a bank, you just can’t take the banker out of Malcolm Turnbull.

The fact is, he’s there to defend the indefensible. By way of contrast, Bill Shorten clarified our position as he said himself, he listened, he acted, he acted swiftly and can I say in relation to the Shadow Cabinet, our position was focused on getting a very clear position on tax relief for small and medium enterprises and making sure we prosecute the argument that we’re not going to rob schools to give to banks.

We’re not going to rob schools to give to banks. We’re not going to rob our hospitals to give to multinational companies. We will provide tax relief that we can afford. We will provide tax relief to provide small and medium enterprises opportunities. But it is absolutely wrong for the Prime Minister with all of his hubris and arrogance and just utterly out of touch for him to continue to argue that we should provide billions of taxpayers’ dollars to foreign shareholders, to multinational companies and to the big banks. That’s not acceptable and we believe the Australian people are on the side of our argument. That’s why we will continue to prosecute it between now and every day until the election.

JOURNALIST: And what happens when the tax rate eventually falls to 25 per cent. Labor doesn’t support that -

O’CONNOR: What we’ve made very clear is that from tomorrow there will be a tax fall for businesses up to $50 million turnover up to 27.5 per cent. We think that’s a reasonable point. Given this, since this government was elected it has doubled the debt. We have the highest debt in our history and yet the government has unaffordable, unfair, and un-costed tax plans.

By way of contrast, we have actually been leading on policy. We want to make sure we can actually pay for the things we announce. Whereas this government doesn’t seem to care about its fiscal responsibilities. It has an unaffordable tax plan. It is ridiculous for us to be even committing ourselves to further tax cuts in 2024.

That’s the same with the income tax plan. Our income tax plan provides 10 million workers with better, bigger and fairer tax breaks - tax relief. Whereas of course the Government wants to provide $7000 tax cuts for people on $200,000 a year while at the same time cutting penalty rates for retail, pharmacy and hospitality workers. Where’s the fairness in that? Where’s the economic sense in that?

We know this, if you provide relief to workers, they’ll spend their money in the economy on goods and services. So it’s economically sound and socially just for people to understand our position and that is why Labor is putting it forward. It’s a compelling case as to why we need to see a change at the next election.

Thanks very much.