The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Wayne Swan

Wayne Swan

Deputy Prime Minister and Treasurer

3 December 2007 - 27 June 2013

8 September 2011

Interview with Jon Faine

ABC 774 Melbourne

8 September 2011

SUBJECTS: Craig Thomson; National Accounts; industrial relations; productivity agenda; executive pay.

FAINE:

Wayne Swan, Acting Prime Minister, good morning to you.

TREASURER:

Good morning, Jon.

FAINE:

First of all Victoria Police will now reinvestigate the matters concerning Craig Thomson, the Member of Parliament who is accused of various indiscretions with his trade union credit card in the past.  New South Wales didn't find anything.  George Brandis on AM this morning said that the pursuit of Craig Thomson will not finish.  He says, quote: `this has ripped the scab off a whole course of conduct by union officials and it will continue' and refuses to apologise.

TREASURER:

Yes, well that's just fairly typical of the Liberals.  Look they want to wreck everything.  They want to talk the economy down and they want to throw as much mud as possible.  That's their tactic.  It doesn't matter what the issue is, Mr Abbott is out there talking the economy down even in the face of these figures yesterday.  Mr Brandis is out there wanting to throw as much mud as possible.  I don't think it's good for the country.  I don't think it's good for the political debate but they should at least have enough grace to acknowledge that their attempt to actually make this an issue through the New South Wales Police has blown up in their face.

FAINE:

Do you think Craig Thomson is entitled to an apology?

TREASURER:

Well, Craig Thomson has now got a report from the New South Wales Police which says there was no evidence to warrant a formal investigation to the New South Wales Police.  If Mr Brandis isn't man enough to admit that this political tactic has blown up in his face, that's just a sad commentary on Mr Brandis.

FAINE:

We'll see whether or not he wants to respond.  To turn to IR reform, Tony Abbott is promising a review of industrial relations policies and I notice business are calling for you to review IR, and yesterday you conceded there might be something to look at.  How far are you prepared to go?

TREASURER:

No, I don't accept that Jon.  No, what I said yesterday was that we were having a normal review of the IR act.  That is a matter of course with a new piece of legislation.  I also said quite reasonably that I'd talk to business leaders about their concern but I made it really, really clear that we're not up for some WorkChoices-style agenda which tears workers down, which rips away at their wages and working conditions.  We've got a productivity agenda to build the workforce up and to build up productivity which involves the skilling and education and training of our workforce, investment in infrastructure, a whole series of reforms like uniform occupational health and safety.  That's what a productivity agenda is.  What I said reasonably, as Treasurer, I would listen to the concerns of reasonable people but a lot of people out there in this debate are not reasonable.  What they want to do is go back to WorkChoices and we won't have a bar of that.

FAINE:

So what are rigidities in employment that everyone is calling for you to address and that you concede can be looked at?  What does that actually mean?

TREASURER:

Well, exactly.  What does it mean?  And I've not seen any convincing evidence from anyone as yet that would indicate that there are rigidities there which are having a deleterious effect on productivity, but I said I'll talk to people about that because that's just common sense.  That's what a Treasurer and a responsible minister does, but there's a lot of generalisations out there at the moment which I don't think are fairly based.  We've got a system based on enterprise bargaining.  It is the system that produced the very big increases in productivity over a long period of time.  It is very sound.  It is there in the context of the Fair Work Act.  There will be a normal review through the early part of next year and people are entitled to participate in that and we'll have a discussion about it.  That's what I said yesterday.  That's the full context of my remarks.

FAINE:

The GDP figures yesterday suggest that the economy is continuing to grow and the two-speed divide if anything is getting worse not better.  What's your strategy for dealing with it?

TREASURER:

Well, we've got a comprehensive strategy for dealing with the patchwork economy but the encouraging thing about the GDP figures yesterday was that we had strong investment, we've got rising incomes and we also had reasonably solid consumption because as you might have noted many people have been out there suggesting that consumption has been dramatically low.  Consumption was about at trend and that was encouraging, and investment was also strong in parts outside of the mining sector.  So what we saw was that the fundamentals in the economy are pretty strong. But of course the figures also showed that in particular sectors such as retail, and tourism and manufacturing, some people, some businesses are doing it really hard and that's why we've said for 18 months now - we need a range of policy and responses to address the fact that not every business is in the fast lane of the resources boom.

FAINE:

And what are those policy responses?

TREASURER:

Well, the ones that you and I have discussed on many occasions, Jon.  The fact is that we need the revenue from the MRRT to make sure we can give a significant tax cut to small businesses, all 2.7 million of them.  A general cut to the company rate over time.  We need to build up our national savings; that's important given the amount of investment that's going into the economy.  We need to be investing in infrastructure, that's part and parcel of a broader range of reforms such as the skilling of our workforce - the whole package we had at the middle of the last Budget.

FAINE:

But we got some figures yesterday, Wayne Swan, saying that whilst Australians statistically are doing better, they don't think they are.  They're feeling as if they're not doing better and then you get the head of Qantas, Alan Joyce, who is squeezing everybody - the thousands of workers who keep Qantas in the air - squeezing their wages and conditions whilst rewarding himself a massive pay rise.  People look at that, they look at what's going on and they say `oh for goodness sake, we're all getting screwed here while the rich get richer'.

TREASURER:

Well, I think there's a couple of things in there that deserve a response.  I mean, I can well understand how the workers at Qantas would see very significant pay increases at the moment for senior executives.  That's one of the reasons we've adopted the recommendations of the Productivity Commission from a year or so ago, to give shareholders a say.

FAINE:

But do you think it's wrong for Alan Joyce to get a big pay rise at this time with Qantas?

TREASURER:

Well, I think what the shareholders can do under the new rules we're bringing in the two strike, three strike process is that they can go and have a say. If they think it's unreasonable they can vote it down over time and I can well understand how workers…

FAINE:

What do you mean vote it down?

TREASURER:

Well, these matters have to go to the shareholders and there hasn't been a process…

FAINE:

Yes but the institutions and super funds control it.  The individual shareholders don't have a say.

TREASURER:

Well, the institutions do exercise their power from time to time and they've been increasingly doing that more and more and they can do it in the case of Qantas if they wish to, and that's the reform we put in place which was recommended to us by the Productivity Commission.

FAINE:

The banks have done the same.  You squeeze the account holders whilst the executives just give themselves bigger and bigger packages.

TREASURER:

Well, and that's why we need to have a fair and balanced industrial relations system.  That's a very important part of this equation and we want the workers of this country to feel that they've got a fair and balanced industrial relations system, and that's why we're not going back to something like WorkChoices, which is all about tearing away wages and working conditions. But the other thing that you see in the figures is that employment in Australia is strong and that incomes are also rising.  That was the other pleasing figure in the National Accounts yesterday because the most fundamental thing in terms of your peace of mind as a worker in Australia is to have a job.  To get decent pay and working conditions and a reasonable pay increase over time.

FAINE:

I'm grateful to you for your time yet again this morning as Acting Prime Minister.  It's a very busy day thank you.

TREASURER:

Good to talk to you.