Bill's Transcripts

Doorstop - Canberra - labour force figures

Doorstop – Canberra
7 February 2013

SUBJECTS: Labour Force Figures, Superannuation, penalty rates  


BILL SHORTEN: Good afternoon everyone, thank you for coming.

The monthly employment numbers have just been released. Unemployment has come in at 5.4 per cent. We believe that this is better news than worse news. I think the markets expected a slightly higher unemployment number. There is definite softness in the Australian labour markets, but we believe that on balance, the creation of extra jobs shows that there's more good news in the Australian economy than bad news.

There are areas of softness. The trend in Victoria is disturbing, but we also believe that the creation of part-time jobs shows there is some good news out there in the High Street of the Australian economy.

Happy to take questions.

JOURNALIST: Minister, is the Government concerned about equity in superannuation concessions, and does it think it should do something about it?

BILL SHORTEN: I'm happy to take questions on all other matters, but maybe if I could just deal with any of the employment questions first, unless people were just satisfied with what I said then.

JOURNALIST: [Inaudible].

BILL SHORTEN: Well, the global economic circumstances are tough. Any Australian who goes overseas and lands back in an Australian airport generally has a sigh of relief. Relatively, despite the impact of overseas economic events especially in Europe and North American, it isn't gilding the lily to say that Australia is doing relatively better.

I was a bit amazed yesterday when I heard the shadow finance spokesperson say well, I think he mentioned countries, not limited to but including Germany and Norway, and he said you know, they've got a surplus. What's wrong with you?

Well, hello. In Norway, the tax to GDP ratio of all levels of Government is north of 50 per cent. In Germany, it's north of 40 per cent. In other words, over 40 per cent of their GDP is in tax revenue; In Norway, over 50 per cent.

We have the alternative finance minister of Australia, in something which he couldn't have - I can't understand the comparison. Was he seriously suggesting that the way to get to surplus is to adopt the high taxing regimes of Norway and Germany.

So I think the people recognise that whilst things are tough here, in particular in Victoria. I think manufacturing is being hard hit by the high dollar and by a lack of infrastructure investment at the state level.

I think it is about time we recognised that despite the difficult circumstances, we have more Australians working than we ever have before. We've been through five of the toughest years that the globe's seen economically since the Great Depression. Despite Mr Robb's newfound love of high taxing regimes in Europe and suggesting that as the potential model for us to think about, we're doing okay.

But certainly Victoria, Tasmania, doing it hard, high dollar, GFC is a big impact. So I think there are a range of factors at work.

JOURNALIST: Some of those states, Victoria's doing it hard. How would feel you about jobs going from Victoria, New South Wales up to the top end?

BILL SHORTEN: Yes, I was a bit surprised this morning to read - I think it's an opposition policy. Of course, it's un-costed, so whether or not they want to own this, I don't know. But in their policy and I only had a bit of a quick chance to have a look at it, they are proposing, not growing jobs, the opposition's strategy is to shift jobs.

What good news it must be for the 22,000 Commonwealth public servants who live in western Sydney or the 23,000 Commonwealth public servants who live in Melbourne.

Mr Abbott's answer to them, if he is successful at the next election, is move north. What this Government's focused on is jobs everywhere, not just jobs in Karratha.

If people want to move to the north, they can but I don't think it's the job of Government to be taking people's jobs away from areas which are already experiencing higher unemployment, decrease the pool of available jobs and move them to the tropical zone of Australia. Shifting jobs is not growing jobs.

JOURNALIST: Minister, a month ago the Government made a lot of noise about the deterioration in Queensland, that's sort of gone back the other way now. Any explanation for that might be the case?

BILL SHORTEN: Well, that’s good. But I'd also make the point is that cutting public sector jobs, you know, no one ever shrinks their way to greatness in the employment game. It's about having confidence and it's about growing jobs. I do think matters such as infrastructure expenditure are important.

I mean the Federal Government is doing heavy lifting in Victoria. The Regional Rail Link is a multi-billion dollar project. If you were to sit on the, you know, the café at St Kilda, for those of you who are familiar with the aquatic waterfront of Melbourne, and you look across to Williamstown, you'll see the HMAS Canberra being built: federally funded jobs in Victoria.

And thank goodness there's at least one Government - there's at least one party in Australian politics who's investing in the National Broadband Network. But infrastructure requires commitment from all levels of Government, not just saying the Feds have got to fit it all.

I mean the other point though about just simply saying that we'll create some new El Dorado up north is this. I noticed in the opposition policy, they said they'd create special economic zones.

I think the opposition - running a Government is not the same as having a thought bubble in a right wing think tank. When they talk about special economic zones, inviting the Governments, I think of South Korea and Singapore. I just want the opposition to rule out that they're not going to give special tax treatment to business in one part of Australia yet slug other parts of Australia. I mean we are one nation and that means that we should make sure that labour laws and tax laws support all business, all enterprise in Australia and that we're not creating some sort of dodgy economic zones in parts of Australia.

It's not a well thought out jobs policy as far as we can tell. No doubt the opposition will say well, it's an idea, it's not a policy. But you know when do they actually get held to account for their comments?

JOURNALIST: Having said that you're sort of sounding sort of gloomy about the jobs out there?

BILL SHORTEN: No, what I would say is I live in the real world. The news is better than worse but I'm not going to tell someone who's unemployed that because we're doing comparatively better than the rest of the world, that therefore that life's easy for them. I wouldn't say that.

What I do know is that the Government settings are the right settings. We're spending a record amount on skills. If you haven't got the skills in the modern age, you're just not going to have the same chance in the job market.

I know that we're spending a record amount in remote employment programs, in indigenous communities. I also know that we're spending significant amounts of money to help people with disabilities who've long been treated as second class citizens in the labour market.

So we've got jobs programs to help people who are doing it tough, who are unemployed. We are investing record amounts in skills and training. The reality is the old story of the 1960s and 70s where you could have one job for life - you would know as journalists - is certainly gone. What we know now is that you'll have eight or 10 jobs in your life, three or four careers.

The best thing a Labor Government can do is sound economic management and is by training Australians to be resilient to find their own jobs. Mr Abbott's engaging, I think, I some sort of old fashioned DLP fantasy, where you can just nominate a town and say this is going to be the new town, and we'll do special things in that town and everyone else can move there.

I think we are better off allowing people's own capacity to pursue their own self-interests. The idea if you work for the CSIRO, your kids are in a local school in Melbourne or Sydney, your house has a certain value, that is you want to keep being a cutting edged scientist in Australia, you have to take your kids out of school, you've got to tell your partner to change jobs. The idea that you're going to have to sell your house at a fire sale at the time, because Mr Abbott's decided, that science is better in Karratha than it is in Melbourne or Sydney. It is ill thought out policy, reckless ideas.

So in terms of the jobs market, I am optimistic about the future. We do - our constructions sector will grow. Our mining sector is important. We can win the competition in manufacturing, in high end manufacturing, premium price manufacturing, manufacturing which shows a lot of R&D in it.

And we are a services economy. More than seventy per cent of Australians now work in services. More than 70 per cent of our GDP is generated in services. Australia can win a global competition about the creation and maintenance of good jobs.

But the way you do that is you don't shift people from one city to another. What you do is you make sure they've got the skills, the capacity, and the sound economic management to allow the creation and maintenance of good jobs.

So I'm not gloomy but I can't pretend that in a global crisis, that life is easy.

JOURNALIST: We're just on 10 minutes in. Can I ask you my question again?

BILL SHORTEN: Thank you. Of course, Laura.

JOURNALIST: Are you worried about equity of tax concessions of superannuation and is the Government looking at doing something about it?

BILL SHORTEN: Well, superannuation was a Labor idea. And as much as coalition spokespeople try and airbrush history: in 1985 the union movement and along with the then Labor Government agreed to forgo a three per cent wage rise and put it into compulsory super.

Up 'til then, superannuation had only been the preserve of a very few areas and a very few people. Some of you might remember it and certainly your parents would.

After 1985, Labor, against the opposition of the then Liberals created universal compulsory superannuation. In 1992, Paul Keating passed a law which said that superannuation would go from three to nine per cent over the next 10 years. For the record, the Coalition voted against that too. So when they’ve had a chance to vote to increase it, they vote against it. Last year I introduced a bill to increase superannuation from nine to 12 per cent.  We got it through.  The Coalition voted against that. 

So the first point I’d make about fairness and equity and superannuation is wherever the hard choices have to be made, the Coalition go missing, they go missing, and I’ve got three clear points of proof to that. 

Labor votes to increase superannuation. If it wasn’t for Labor, most Australian workers wouldn’t have superannuation accounts. Now, in terms of fairness and equity, what we’ve done from 1 July last year, so it’s already happening, it’s already in, is that we abolished the tax paid by people who earn less than $37,000 a year. 

This detail may seem boring to some people, but it’s fundamentally important to 3.6 million Australians. There are 3.6 million Aussies, who earn less than $37,000 a year – 3.6 six million. That is a big number of the Australian workforce. 

Up to 1 July last year for every dollar they paid into super, which would be a few thousand dollars, every dollar they’ve paid, they had to pay 15 cents tax. So to do the maths fairly crudely: if you earn $36,000, you were paying roughly $500 in tax. 

Now, when you earn $36,000 and you’re only able to put in something under $3,600 in superannuation each year, that $500 in tax is a big slug. We abolished the tax. 

This year at the National Press Club Mr Abbott confirmed the policy of the Opposition.  They’re going to put a new tax because we’ve got rid of it. It’s a new tax on 3.6 million Australians, whose only chance of not relying on the aged pension, is to have superannuation savings balances that grow. So what we have is we’ve got a clear choice. 3.6 million Australians will get a new tax by the Opposition. 

The other thing which happened only two nights ago, which is equally important, is we passed an income support measure for people who are on allowances. There’s one million Australians on allowances. These allowances are not big, as you well know. What we have done is to assist them with the costs of living, provide singles $210 a year, to provide couples $350 a year. 

Much to my surprise hot on the heels of the Opposition deciding to put a new tax on 3.6 million Australians, they decided to oppose some of our poorest Australians getting $210. The Opposition in terms of fairness have never seen a poor person or a working person on a low income they wouldn’t like to take tax off.

JOURNALIST: Is it fair to have high income earners getting support worth $520,000 from Government, whether it’s by a pension or super, compared to $270,000 for the rest of the population?

BILL SHORTEN: Well, what we did do yesterday in response to a question in the Parliament is our Prime Minister reiterated our 2010 policy, which was said after the release of the Henry Tax Report as I recall. There were two things ruled out: an increase on GST and a withdrawal tax on superannuation; so some of the speculation about that, the Prime Minister is clearly starved the oxygen on that. 

In terms of superannuation concessions generally, I think there are four principles which guide our approach on superannuation: fairness, sustainability, also making sure – and I think this is a fundamental part of what drives Labor - is we are living longer than ever before. Average life expectancy is up, it’s an average. Men are now living to 81, women to nearly 86 - mind you, that’s an average, so there are no refunds. And when you’ve reached 65, in fact, your life expectancy is heading towards 90. 

So we are interested in a system which is sustainable, which is fair, we’re also interested in a system which ensures that Australians don’t work hard their whole lives and retire poor. 

Our record is clear. We’re lifting super to 12 per cent opposed by the Liberals. We are the ones who want to make sure that low-paid workers don’t have a new tax put on them and that is where we stand.

JOURNALIST: Do you think that there are any concerns about the sustainability of those $32 billion in tax concessions now which, of course, are going to grow?

BILL SHORTEN: Well, in terms of superannuation, as I’ve said, Labor have been the custodians, the Liberals tinker. I mean, I think that Mr Abbott’s promise that he’ll never - I think what he said and - you know, he said he won't do anything detrimental. Well, that's good. Like, he says he's not going to do anything bad. That's not a rocket science statement. But I think it does deserve examination. 

How can any of you believe that it's not detrimental to 3.6 million people to lose - to have a new tax put on them? 

In terms of the sustainability of the system, this is a government who's committed to making sure the system is sustainable, that it is fair, and we've got the runs on the board.  The only people who ever vote against making the system fair are the opposition.

JOURNALIST: But what about the argument that politicians are the highest paid public servants? 

BILL SHORTEN: Well, I'm on defined contribution. I'm not on defined benefit. I took too long to get into Parliament. In terms of that, for instance, on the measures we made last year, we were applying them to defined benefit schemes as well as defined contribution schemes.  There are some people on defined benefit schemes. 

I think increasingly in Australia the trend is to defined contribution schemes.  So in the long run I expect that most Australians will eventually, by a process of evolution, be on defined contribution.  The changes we made last year were trying to apply to defined benefit as well.

JOURNALIST: Are the current concessions sustainable, based on what you said yourself?

BILL SHORTEN: In terms of the budget and what we do on that, I can't rule things in and I can't rule things out. But what I can do is ensure that there's no sort of false scare campaigns running around. The Prime Minister made it clear that we were keeping to our policy we stated in terms of the withdrawal tax. 

I think that the next issue in superannuation to be resolved is to get the Opposition to back down, from a billion dollar tax cut, to 3.6 million battlers.  I will make a sporting bet that the Opposition by the time of the election will drop that turkey of an idea, because it is a turkey.  Why on earth would you want to try and govern Australia and in the process say: vote for us, because we intend to put a new tax on 3.6 million low-paid Australians.

JOURNALIST: What do you say to people who argue that it's time for a pause in tax changes on superannuation?  Not so much in terms of the low income issue, where they back you on criticising the Coalition on that, but where they say it's time for pause on tax on contributions and earnings?

BILL SHORTEN: Just to take that second part of your question first, you say people back us on…

JOURNALIST: I'm thinking of Garry Weaven, who probably would not disagree with you on the low income super contribution.  But he said it was time for pause.

BILL SHORTEN: Is there anyone who's backing the Coalition's policy to reintroduce the tax on low-paid people? 

JOURNALIST: (Inaudible)

BILL SHORTEN: Look, there's just no one. So I was going to say, it mightn't just be Mr Weaven. The only ones who seem to be backing it are in opposition, who can't provide costings on everything from pack up your family, buy a Winnebago and move north to get a job. 

In terms of the concessional system we have, our principles have been clear. We believe that we want to encourage people to save for their retirement. We know that people are living longer than ever before. Thank goodness, a Labor Government, had the legislative tenacity, despite Conservative opposition, to lift superannuation from nine to twelve per cent.

If you were to dial back, imagine if in 1985 unions hadn't foregone a three per cent wage rise. Imagine in 1992 if Labor had lost the argument to increase super from three to nine per cent. Imagine if, we had lost the argument last year in Parliament.  Imagine if the Coalition had had a three from three win score. 

We wouldn't have savings the size of the Australian economy.  We wouldn't have the depth in liquidity in our capital markets.  We wouldn't have people with account balances now for men who are retiring at nearly two hundred thousand dollars, for women still above $100,000 dollars. 

So when we look at the system, Labor has the track record of being the people who, when hard decisions have to be made, improve the system for all.

JOURNALIST: Is the current system fair - your current system?

BILL SHORTEN: Oh, I believe that our system is better than the Coalition alternative.  And in terms of matters going to budget or anything else, as you know, the habit across the whole government, and indeed our predecessors, is not to rule in or rule out matters. 

But in terms of fairness, what I know, the one debate you all do have in black and white, the one debate which in Australia we can stop the Coalition from pursuing and they can drop.  What I know is not fair is making people who earn $36,000, working mums, part time working mums - why should part time working mums pay the Abbott tax on superannuation. That is the debate. 

The Coalition have said, we're hanging on to that. For how long, who knows, you could almost run a sweep when they give it up.  Surely someone there has got a white flag to say, this is not the brightest idea we've had. That is not fair and that is the issue which is right front and centre in Australian politics at the moment. 

Why should 3.6 million people have a new tax put on them?  Why should 3.6 million people be denied the opportunity - see the point about superannuation is it should be concessional in terms of a proportion of what you save.  If you're earning - if you're on $37,000, your marginal rate is almost the same as the 15 per cent. 

And what the Coalition, sort of hardheads, the number crunchers, want to reintroduce a tax. It is bizarre policy and it is bizarre politics.  And they should very quickly put it in the cabinet drawer of ideas with an ejector seat for a helicopter.

JOURNALIST: Minister, what are you doing about calls for the penalty rates to be enshrined in legislation from some unions?

BILL SHORTEN: Oh, we've seen that.  It's not Government policy at this stage.  But I tell you, there's a very clear difference between Liberal and Labor.  I think the Opposition went bananas when I got up and gave a ministerial statement on penalty rates.  If you listen to some of the outrage sort of far right wing press releases, which a few of their IR operators occasionally let slip, we - in a ministerial statement I reiterated a submission that the Government made on the review, the interim review, into penalty rates in Australia.

There's an interim review being conducted by the Fair Work Commission.  Much to the Opposition's outrage, they thought it was, you know, the death of democracy.  I said, listen, there is a case for penalty rates in this nation.  If you work un-family friendly hours, if you're working late in the night stacking shelves, if you're a nurse going the back shift, looking after sick kids at the children's hospital, if you are a production worker making sure that our water utilities are working, I do think you should get penalty rates.

There's 11 public holidays a year on average. I do think if you work hours away from your family you should get penalty rates.  The union movement said that all penalty rates should be put into legislation.  That's one idea.  The Government has nailed its colours to the mast.  We put in a submission - which is available on the web at the Fair Work Commission.  I think the Fair work Commission's well placed to consider the case for penalty rates. 

The only people who haven't stated a view - and the unions can - a case it believes it should put - the only people who haven't stated a specific position on penalty rates is the Opposition.  At some point in 2013 I think we have to recognise that politics is a two-horse race and that what has the Opposition got to say on industrial relations. Penalty rates is an ideal chance for them to say something more than clichés.

JOURNALIST: (Inaudible)

BILL SHORTEN: Oh, it's not Government policy at this point.

JOURNALIST: (Inaudible)

BILL SHORTEN: By the way, are you asking the Opposition what their view is on penalty rates with some degree of specificity? Like, if the polls are right and some of you think that they'll form the next government, when will they bring opposition industrial relations policy out of witness protection.  These guys run screaming from IR policy.  They don't want to talk about it. 

But anyway, I don't want to outstay my welcome with you.  Thank you very much.



Mr Shorten’s Media Contact: Sam Casey — 0421 697 660