The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Peter Costello

Peter Costello

Treasurer

11 March 1996 - 3 December 2007

Transcript of 13/12/99

 

Transcript No. 99/96

TRANSCRIPT OF
The Hon Peter Costello MP
TREASURER

World Today
Monday, 13 December 1999
1.45 pm

SUBJECTS: Regional Australia, Wages and Jobs

PRESENTER:

The Treasurer, Peter Costello, has in fact completed his Cabinet commitments after lunchtime, he’s joined us in our Canberra studio at Parliament House now to explain his position. Mr Costello is speaking to Alexandra Kirk.

 

KIRK:

Treasurer, on reflection was it a bad idea to raise the prospect of lowering wages in regional Australia?

 

TREASURER:

Well, I raised the prospect of flexibility. And what I said in relation to flexibility, is that people have got to have the right to try and get the best deal for rural and regional Australia. And what I said is, that in some areas some of the benefits can be turned to advantage, such as the benefits in relation to housing. It may well be that you can trade off housing in relation to employee packages and the like. And if you had these additional flexibilities, that would help rural and regional Australia. And I think the proof is there, isn’t it? If the flexibility is open to people, and they can use it to attract investment for unemployed people, that will be a good thing.

 

KIRK:

There already is recognised in the industrial relations system, a principal of inability to pay. So what more do you want, when employers can actually lower wages if they can’t afford to pay anymore?

 

TREASURER:

Well, I know incapacity to pay has been run on many occasions in particular industries, and there’s a whole chequered history in relation to that. I’m not talking about the incapacity to pay, I’m talking about new job opportunities for the unemployed. Now, let’s suppose there are people that are unemployed. What do we do to get new investment to help them? One of the disadvantages, generally speaking, in regional Australia is transport costs. You’re always going to build a new plant closer to a market, maybe a shipping port or something like that. One of the things the Government’s working on, of course, is diesel fuel rebates to try and lessen the disadvantage that regional Australia has in relation to transport. Now, in relation to terms and conditions of employment, one of the advantages that rural Australia has, is that you don’t have to pay over-priced housing costs like you might have to in central business districts. That might actually be an advantage in attracting new investment - executives that can have a better lifestyle and employees who are able to get better housing on the same wages, and therefore are able to contribute their skills and start enterprises up. And I think it’s a question really of going through all of the areas and trying to use as much flexibility as possible.

 

KIRK:

And how does this apply then to say the lower paid workers? You’re talking about the executives here.

 

TREASURER:

Well, if you get new investment, you get executives that are starting up new plants, you can create new jobs. That’s the whole idea. Everybody’s saying . . .

 

KIRK:

What about the . . .

 

TREASURER:

. . .quite rightly . . .

 

KIRK:

. . . wages of the low paid?

 

TREASURER:

Oh well, anyone who’s currently in a job, obviously is quite happy with, is not going to agree to a wage cut. And nobody would suggest for a moment that anybody that’s currently in a job would agree to a wage cut. What we’re saying though, is if you happen to be unemployed, if you’re getting no wage and you want to get out of unemployment and get into the labour market, the only way you’re going to do it, is if there’s new investment. The only way you’re going to get new investment is if it becomes attractive. What are the advantages that the bush has? Well the bush has lifestyle and the bush has housing advantages. And if you can use the flexibility to create that kind of investment that would be good for people who are unemployed.

 

KIRK:

Are you talking about lowering the wage below the award, below the safety net?

 

TREASURER:

Nobody who is currently receiving an award, obviously, would want a lower wage. Nor should they. But what about somebody who’s unemployed, who’s got no wage?

 

KIRK:

So there should be what, a special award for an unemployed person?

 

TREASURER:

You should have flexibility. And the Government’s been working towards this flexibility so that you can get new enterprises off the ground and create new jobs.

 

KIRK:

So you’re talking about a new type of wage to get new industries off the ground?

 

TREASURER:

No, I’m talking about absolute flexibility, so that you can attract new investment. And I’m talking about dealing with the areas of disadvantage, particularly in relation to transport which is the main disadvantage area. Look, if people are given the flexibility and the Government’s been working on giving them the flexibility outside standard terms and conditions, you know, the arbitral matters, if that flexibility is used, that can be used to the advantage of new job creation. That’s the point. And new job creation is better for the unemployed.

 

KIRK:

But if you lower wages, doesn’t that mean more people end up going to the cities where there are higher wages and you end up losing more people in the bush?

 

TREASURER:

We’re talking about unemployed people. How do you get unemployed people into the workforce? You won’t get it unless you attract the kind of investment that creates new jobs. And you won’t create new investment for new jobs unless you can make decent returns and you can address cost disadvantages. Now, I think, in regional Australia we’ve got to turn those sorts of things to advantage. You’ve got to turn the lifestyle to an advantage, housing to an advantage, community to an advantage to attract new investment for new jobs. This is all about unemployed people, people who aren’t getting any wages, getting new jobs.

 

KIRK:

So you’re talking about a new structure then?

 

TREASURER:

No, I’m talking about using the existing system that the Government has put in place and enhancing the flexibility and utilising the flexibility that we’re putting in place. The reason why the Government’s put flexibility in place is to give people the opportunity to trade these things. We should be able to trade hours. For example, for working women who want to get home at 3 o’clock, being able to trade hours. And that could be a really big advantage for flexibility in the workforce. It’s only if we actually harness and use flexibility that people are going to overcome the obvious cost disadvantages, particularly in relation to access to markets and transport that’s currently working against regional Australia.

 

KIRK:

Peter Costello, thanks very much.

 

TREASURER:

Thank you.