Editorial Friday 18.09.09.
With the launch today of the new Australian Institute for Population Ageing Research we have heard that the most recent projections indicate that our population will reach 35 million by 2049. This is more than was previously expected, highlighting once again the challenge of our ageing population. While the proportion of people over the age of 65 is now expected to be less than previously thought, it will still reach 22%, almost doubling from today’s 13%. The reason for the more rapid rate of population growth is a combination of growing immigration and a rising birthrate.
While there will no doubt be much debate about just what a sustainable level of population might be on a continent with water supply issues, housing shortages, and the eternal argument about whether migrants are taking jobs or creating jobs, the big question is still the question of retirement incomes. With the percentage of people over 65 almost doubling in the next 40 years, it has been clear for quite some time that sustaining the age pension arrangements will be difficult, if not impossible. Now, the growing concern is that other forms of retirement income may also not be sufficient.
The recent decision by the government to gradually increase the pension age from 65 to 67 is obviously a response to the problem of sustainability, and I suspect the day will come when perhaps that age is revised upwards again. But by far the most important decisions to be made about retirement incomes will relate to the compulsory superannuation system. One of the problems which confronts the superannuation system at present is the so-called “longevity risk”. That’s the risk of an individual living longer than expected and running out of money, and it happens partly because of the way the retirement income industry is structured.
What usually happens when a person retires is the bulk of the superannuation money winds up in some sort of annuity, generally an account based pension. While the fund earns money, the retiree is usually drawing down a pension payment which exceeds the income, so that eventually the fund will run out. Normally it is supposed to run out after you die, but with life expectancies increasing, and some people just too damned stubborn to die, sometimes the money runs out before the person dies. Then, at a time of life when they are at their most vulnerable, and may well have increasing medical needs, they are thrown back onto the government pension system. With the combination of both population growth and population ageing it is only going to become worse.
One of the things that the new Institute will be doing is calculating a new Australian Longevity Index, which is supposed to provide the sort of data needed to create a different kind of pension fund. With such data it should be possible for financial institutions to create a lifetime pension product, based on the aggregated community risk in much the same way as insurance products are designed. In fact, it could be described as a kind of reverse life insurance where the fund keeps on paying you so long as you don’t die. Such a fund would provide much more certainty for self funded retirees.
The other part of the equation is the superannuation system itself, which continues to be the subject of a raft of government regulations and taxes along with excessive fees and outright rorts in the financial services industry. The accumulation of the retirement nest egg itself needs to be free from those barriers which prevent it from delivering the maximum possible benefit. There are many aspects of superannuation which would benefit from reform, but here’s just one. While it remains to be seen just what recommendations might be made by the Henry review of taxation, in an ideal world superannuation contributions should not be taxed at all, and neither should the earnings of the fund, effectively quarantining it form tax while the nest egg grows. The benefit is a bigger retirement nest egg at the other end, providing for wealthier self funded retirees, who will pay more tax in GST while spending more money into the economy.
Friday, September 18, 2009
Thursday, September 17, 2009
Tax Reform Not Just For The Chosen Few
EDITORIAL THURSDAY 17.09.09.
Next month, the Secretary of the Treasury Ken Henry will have a meeting with representatives from business groups, accountancy firms and law firms, to discuss the likely recommendations of Dr Henry’s review of taxation. This is the wide ranging, so called “root and branch” review of taxation which was promised by the government and which is expected to set the foundation for the tax and welfare system for decades to come. For that reason it is vital that the interests of all members of the community should be adequately addressed in the process, and while the consultation with business groups is an essential part of that, questions are now being asked as to whether other interest groups will have a similar opportunity for input.
Unions for example are still waiting for the phone call. A representative of the A.C.T.U. has been quoted in the Sydney Morning Herald as saying “We’ve been concerned right from the outset that the review has been hearing more from business that it has from the wider community.” But it’s not just the unions who are concerned. Welfare groups are also patiently waiting for their invitations to participate in the process. Clair Martin, the C.E.O. of the Australian Council For Social Service wants the review to produce “fair and efficient tax reform that removes unfair loopholes and distortions, and an adequate income support system that keeps people out of poverty and assists them into employment where appropriate.”
There is no doubt that genuine tax reform is long overdue, but many people have previously expressed concerns that if the reform is designed by the people whose job it is to collect tax, without reasonable input from all sectors of the community, the result might be more about finding ever more efficient ways to extract dollars from the community rather than creating a fair and just tax system to serve the community. It would seem that when it comes to the business community, Treasury is keen to address those concerns. But the concerns of other parts of the community are just as legitimate.
It is often said that government should be run like a business, but that is misleading. If it was only run on a bottom line basis the result would be higher taxes and fewer services. In fact, it would be easy to suggest that is already happening. But the proper purpose of government is the stewardship of the community for the benefit of the community, and the purpose of tax is to pay for the services on which the community depends. Tax also provides an essential policy tool for discouraging unwanted activity and encouraging worthwhile pursuits through concessions, rebates or subsidies. Tax also funds the government’s operating overheads, but generally speaking the primary purpose of tax is to pay for community services, and while it is important for government finances to managed in a responsible and businesslike fashion, government itself is not a business and should not be seen as such.
For that reason, it is essential for the Henry Tax Review to address the concerns of both unions and welfare groups, and recognize the rights of the people whom they represent. Whether we are radio presenters or rodeo riders, politicians or police officers, we are all taxpayers and we all deserve a fair go in the process of tax reform. Whether we are working or unemployed, millionaires or working mums, businessmen or battlers, we are all citizens of a free and democratic community and we are all entitled to have the tax and welfare system working in the best interest of all of us, not just the chosen few.
Next month, the Secretary of the Treasury Ken Henry will have a meeting with representatives from business groups, accountancy firms and law firms, to discuss the likely recommendations of Dr Henry’s review of taxation. This is the wide ranging, so called “root and branch” review of taxation which was promised by the government and which is expected to set the foundation for the tax and welfare system for decades to come. For that reason it is vital that the interests of all members of the community should be adequately addressed in the process, and while the consultation with business groups is an essential part of that, questions are now being asked as to whether other interest groups will have a similar opportunity for input.
Unions for example are still waiting for the phone call. A representative of the A.C.T.U. has been quoted in the Sydney Morning Herald as saying “We’ve been concerned right from the outset that the review has been hearing more from business that it has from the wider community.” But it’s not just the unions who are concerned. Welfare groups are also patiently waiting for their invitations to participate in the process. Clair Martin, the C.E.O. of the Australian Council For Social Service wants the review to produce “fair and efficient tax reform that removes unfair loopholes and distortions, and an adequate income support system that keeps people out of poverty and assists them into employment where appropriate.”
There is no doubt that genuine tax reform is long overdue, but many people have previously expressed concerns that if the reform is designed by the people whose job it is to collect tax, without reasonable input from all sectors of the community, the result might be more about finding ever more efficient ways to extract dollars from the community rather than creating a fair and just tax system to serve the community. It would seem that when it comes to the business community, Treasury is keen to address those concerns. But the concerns of other parts of the community are just as legitimate.
It is often said that government should be run like a business, but that is misleading. If it was only run on a bottom line basis the result would be higher taxes and fewer services. In fact, it would be easy to suggest that is already happening. But the proper purpose of government is the stewardship of the community for the benefit of the community, and the purpose of tax is to pay for the services on which the community depends. Tax also provides an essential policy tool for discouraging unwanted activity and encouraging worthwhile pursuits through concessions, rebates or subsidies. Tax also funds the government’s operating overheads, but generally speaking the primary purpose of tax is to pay for community services, and while it is important for government finances to managed in a responsible and businesslike fashion, government itself is not a business and should not be seen as such.
For that reason, it is essential for the Henry Tax Review to address the concerns of both unions and welfare groups, and recognize the rights of the people whom they represent. Whether we are radio presenters or rodeo riders, politicians or police officers, we are all taxpayers and we all deserve a fair go in the process of tax reform. Whether we are working or unemployed, millionaires or working mums, businessmen or battlers, we are all citizens of a free and democratic community and we are all entitled to have the tax and welfare system working in the best interest of all of us, not just the chosen few.
Wednesday, September 16, 2009
Telstra Hung Up Over Broadband Network
EDITORIAL WEDNESDAY 16.09.09.
The dramatic announcement by Senator Stephen Conroy that Telstra will be required to separate its wholesale and retail activities has met with a mixed reaction. While competitors and consumer groups have welcomed the reform, claiming that it will promote better competition and better service for customers, shareholders might be entitled to feel somewhat upset. The immediate response in the share market was for a drop in the price of Telstra shares which wiped out almost $2 billion of value and left the shares trading at less than the price at which they were originally sold more than a decade ago.
The plan itself seems to be a circuit breaker intended to force Telstra to confront the 21st century reality of both new technology and new government policy. It is in the best interests of consumers, and the national interest, to construct a national broadband network which provides a platform for a range of service providers to compete on an equal footing, delivering the cost benefits of genuine competition. It may even be in the best interests of Telstra and its shareholders to work with the government to fold its network structure into the new National Broadband Network if it can negotiate a reasonable deal. But that is debatable, and the immediate reaction in the market would appear to indicate that investors are not looking at the plan as an opportunity, but as an obstacle.
The impact on shareholders is important for several reasons. Firstly, there are so many of them who are so called Mum and Dad investors who bought shares in good faith from a government who implied that they would be a great investment. Secondly, it’s not just direct shareholders. It’s also the millions of Australians who have some of their superannuation money invested in Telstra shares. Thirdly, this episode illustrates the inherent problem, the intrinsic conflict of interest, involved in a government selling what should be public infrastructure into private ownership. In doing so the government has an obligation to achieve the best price possible while at the same time it has an obligation not to defraud its own constituents by selling them a pup.
While Telstra hasn’t exactly been a pup for people who sold out at the right price, or even those who hung on and enjoyed very healthy dividends over the years, the point is that the process has delivered a result which has not been entirely in the public interest, nor entirely in the interest of individuals who bought the shares. But now that the government is no longer a shareholder, its only obligation is to the national interest. And since this is a new government without the political baggage of the previous government, it can rightly claim that it was not this government who caused the problem in the first place when Telstra was sold in one piece creating an inherent market imbalance which must be addressed one way or another.
Despite the concern that shareholders can justifiably feel shortchanged, the plan to force the structural separation of Telstra does provide both a remedy to the mistakes of the past, and a platform for the future. And even though Telstra may face some uncertainty, the fact is that the company was already moving away from its reliance on the old technology copper wire network, and expanding its mobile phone and internet business. Although Stephen Conroy has been accused of putting a gun to Telstra’s head, all he has really done is to accelerate the inevitable, and the sooner Telstra comes to terms with that, the better off their shareholders will be.
The dramatic announcement by Senator Stephen Conroy that Telstra will be required to separate its wholesale and retail activities has met with a mixed reaction. While competitors and consumer groups have welcomed the reform, claiming that it will promote better competition and better service for customers, shareholders might be entitled to feel somewhat upset. The immediate response in the share market was for a drop in the price of Telstra shares which wiped out almost $2 billion of value and left the shares trading at less than the price at which they were originally sold more than a decade ago.
The plan itself seems to be a circuit breaker intended to force Telstra to confront the 21st century reality of both new technology and new government policy. It is in the best interests of consumers, and the national interest, to construct a national broadband network which provides a platform for a range of service providers to compete on an equal footing, delivering the cost benefits of genuine competition. It may even be in the best interests of Telstra and its shareholders to work with the government to fold its network structure into the new National Broadband Network if it can negotiate a reasonable deal. But that is debatable, and the immediate reaction in the market would appear to indicate that investors are not looking at the plan as an opportunity, but as an obstacle.
The impact on shareholders is important for several reasons. Firstly, there are so many of them who are so called Mum and Dad investors who bought shares in good faith from a government who implied that they would be a great investment. Secondly, it’s not just direct shareholders. It’s also the millions of Australians who have some of their superannuation money invested in Telstra shares. Thirdly, this episode illustrates the inherent problem, the intrinsic conflict of interest, involved in a government selling what should be public infrastructure into private ownership. In doing so the government has an obligation to achieve the best price possible while at the same time it has an obligation not to defraud its own constituents by selling them a pup.
While Telstra hasn’t exactly been a pup for people who sold out at the right price, or even those who hung on and enjoyed very healthy dividends over the years, the point is that the process has delivered a result which has not been entirely in the public interest, nor entirely in the interest of individuals who bought the shares. But now that the government is no longer a shareholder, its only obligation is to the national interest. And since this is a new government without the political baggage of the previous government, it can rightly claim that it was not this government who caused the problem in the first place when Telstra was sold in one piece creating an inherent market imbalance which must be addressed one way or another.
Despite the concern that shareholders can justifiably feel shortchanged, the plan to force the structural separation of Telstra does provide both a remedy to the mistakes of the past, and a platform for the future. And even though Telstra may face some uncertainty, the fact is that the company was already moving away from its reliance on the old technology copper wire network, and expanding its mobile phone and internet business. Although Stephen Conroy has been accused of putting a gun to Telstra’s head, all he has really done is to accelerate the inevitable, and the sooner Telstra comes to terms with that, the better off their shareholders will be.
Tuesday, September 15, 2009
Is Dennis Ferguson More Important Than Pensioners?
EDITORIAL TUESDAY 15.09.09.
For many weeks now, I have been receiving correspondence from a public housing tenant who has a number of unresolved maintenance issues. The reason they are unresolved is that she suffers from a number of psychological disorders including extreme social anxiety disorder, agoraphobia, and depression. These ailments have been verified by at least two clinical psychologists who have provided written statements to the housing department, and copies of which I have received. These extreme disorders result in her inability to cope with the intrusion of strangers coming into her home to carry out the required repairs.
Having once been temporarily relocated to a motel while a bath was replaced, this public housing tenant is requesting the same relocation procedure again to allow the repairs to take place. Others, including church social workers, council officers, and even a senior federal politician have made representations on her behalf. I have been advised by representatives of the department that the nature of the repairs is such that any temporary relocation is not warranted, which may well be true, but completely ignores the mental health issues which are involved. I have been advised that the department cannot justify spending taxpayers’ money on providing motel accommodation for this tenant.
To be fair to the department, numerous attempts have been made to obtain entry to assess and carry out the repairs. The tenant has on some occasions refused entry because of her psychological condition. It would seem, however, that at some point it would actually be more cost effective to provide the temporary accommodation and finalise the repairs, rather than waste money on repeatedly engaging contractors who are prevented from carrying out their work. Or perhaps it is the principle of the matter which is at stake. Perhaps, the department officials who have decided that temporary relocation is a waste of taxpayers’ money are simply refusing to back down.
We know that the repairs need to be done. We know that the department temporarily relocated the tenant on a previous occasion, and that despite promises that the bathroom repairs would be completed while she was away, it was left half done. We know that despite repeated representations, the matter has not been resolved. We know that the mental health issues are genuine. And that is the crucial point. Despite recommendations from mental health experts, the department has indicated that it will seek to obtain an order from the Consumer Trader And Tenancy Tribunal to force access. Surely, such a step is tantamount to torture for an individual suffering from such severe psychological disabilities.
On the other hand, we have now learned that the infamous convicted paedophile Dennis Ferguson has been accommodated by Housing New South Wales at an address in Ryde. Local residents have been outraged that not only has he been allowed to live in their area, close to schools and surrounded by families, but that he has done so with the assistance of taxpayers’ money. They are wondering why taxpayers’ money should be spent on accommodating a reject from another state who is a known danger to the community. And yet, that’s the same taxpayer’s money that the department won’t spend on assisting a pensioner with severe mental health problems and a toilet that leaks all over the floor.
I can’t help but wonder just where the taxpayers of New South Wales would prefer their money to be spent.
For many weeks now, I have been receiving correspondence from a public housing tenant who has a number of unresolved maintenance issues. The reason they are unresolved is that she suffers from a number of psychological disorders including extreme social anxiety disorder, agoraphobia, and depression. These ailments have been verified by at least two clinical psychologists who have provided written statements to the housing department, and copies of which I have received. These extreme disorders result in her inability to cope with the intrusion of strangers coming into her home to carry out the required repairs.
Having once been temporarily relocated to a motel while a bath was replaced, this public housing tenant is requesting the same relocation procedure again to allow the repairs to take place. Others, including church social workers, council officers, and even a senior federal politician have made representations on her behalf. I have been advised by representatives of the department that the nature of the repairs is such that any temporary relocation is not warranted, which may well be true, but completely ignores the mental health issues which are involved. I have been advised that the department cannot justify spending taxpayers’ money on providing motel accommodation for this tenant.
To be fair to the department, numerous attempts have been made to obtain entry to assess and carry out the repairs. The tenant has on some occasions refused entry because of her psychological condition. It would seem, however, that at some point it would actually be more cost effective to provide the temporary accommodation and finalise the repairs, rather than waste money on repeatedly engaging contractors who are prevented from carrying out their work. Or perhaps it is the principle of the matter which is at stake. Perhaps, the department officials who have decided that temporary relocation is a waste of taxpayers’ money are simply refusing to back down.
We know that the repairs need to be done. We know that the department temporarily relocated the tenant on a previous occasion, and that despite promises that the bathroom repairs would be completed while she was away, it was left half done. We know that despite repeated representations, the matter has not been resolved. We know that the mental health issues are genuine. And that is the crucial point. Despite recommendations from mental health experts, the department has indicated that it will seek to obtain an order from the Consumer Trader And Tenancy Tribunal to force access. Surely, such a step is tantamount to torture for an individual suffering from such severe psychological disabilities.
On the other hand, we have now learned that the infamous convicted paedophile Dennis Ferguson has been accommodated by Housing New South Wales at an address in Ryde. Local residents have been outraged that not only has he been allowed to live in their area, close to schools and surrounded by families, but that he has done so with the assistance of taxpayers’ money. They are wondering why taxpayers’ money should be spent on accommodating a reject from another state who is a known danger to the community. And yet, that’s the same taxpayer’s money that the department won’t spend on assisting a pensioner with severe mental health problems and a toilet that leaks all over the floor.
I can’t help but wonder just where the taxpayers of New South Wales would prefer their money to be spent.
Flogging The Dead Horse Of Work Choices
EDITORIAL MONDAY 14.09.09.
It appears that the federal opposition simply cannot resist flogging the dead horse of Work Choices. Liberal Leader Malcolm Turnbull has refused to rule out a return to individual workplace contracts, saying that “By reducing flexibility in the workplace they have put, we would say, real constraints on productivity growth.” He went on to say “We believe that flexibility in the workplace is of enormous importance.” The trouble with that however is that individual contracts do not necessarily ensure flexibility in the workplace, just as Work Choices did not offer workers greater choices, but in fact reduced their choices.
That’s not to say that individual contracts are always intrinsically bad, or that they do not have a possible place in the workplace. Individual contracts can work well for workers who command a strong negotiating position. The evidence has been seen in the high rates of pay available in industries grappling with a shortage of skills and booming demand, such as the mining sector when the resources boom was running hot. However, if the individual worker does not command a strong negotiating position, he essentially has no choice at all but to sign whatever contract is offered. That’s why a return to a strong framework of award rates and conditions has been essential to guaranteeing a fair go for employees.
Yet, Mr. Turnbull persists with the argument that what he calls flexibility promotes productivity growth. The truth is that it does, but it all depends on how you define flexibility and productivity, and how you measure the economic outcome. If all that matters is that you achieve maximum output at minimum cost, then it is plain common sense to see that making employees work longer for lower pay will achieve exactly that. The company bottom line looks terrific, and the gross national product looks impressive so long as there are still enough jobs to keep unemployment under control, but one crucial factor is completely overlooked. That is the question of just who it is that enjoys the benefit of that productivity growth.
The fact that the economy might be powering along pumping out terrific growth figures doesn’t do much to reassure workers who are not participating in the benefits of that prosperity because they have been forced to sign work agreements that leave them out in the cold. Instead, it is the big companies, the directors, the executives and the shareholders who prosper because they have the benefit of the bargaining power in any contract negotiation. The idea that individual workers experience any kind of “choice” when negotiating with a corporate giant, or even a medium sized enterprise, is utterly ridiculous.
The fact of the matter is that a company, whether it is a major corporation or a modest business, is a collective entity with resources much more massive than any individual. It is a different kind of collective from unions or co-operatives or other entities, but it is a collective. It might be considered collectivized capital, just as unions are considered collectivized labour. The idea that reducing the power of collectivized labour could somehow make the system fairer is just simply wrong because the individual worker is quite clearly at a disadvantage.
The idea that it is more productive is also dubious, because if the economic system hacks the heart out of workers entitlements it begins to undermine its own foundation. In a consumer economy, the consumer is himself an essential commodity. Without consumers, the consumer economy crumbles, and that leaves all those politicians, bureaucrats, directors, executives, and shareholders who thought they were being so smart cutting costs and boosting productivity with nothing to sustain their own existence. The bottom line is that if the benefits of economic prosperity are not shared among all who participate in that economy, it can only be sustained by oppression. That is not what a free and democratic society is supposed to be all about.
It appears that the federal opposition simply cannot resist flogging the dead horse of Work Choices. Liberal Leader Malcolm Turnbull has refused to rule out a return to individual workplace contracts, saying that “By reducing flexibility in the workplace they have put, we would say, real constraints on productivity growth.” He went on to say “We believe that flexibility in the workplace is of enormous importance.” The trouble with that however is that individual contracts do not necessarily ensure flexibility in the workplace, just as Work Choices did not offer workers greater choices, but in fact reduced their choices.
That’s not to say that individual contracts are always intrinsically bad, or that they do not have a possible place in the workplace. Individual contracts can work well for workers who command a strong negotiating position. The evidence has been seen in the high rates of pay available in industries grappling with a shortage of skills and booming demand, such as the mining sector when the resources boom was running hot. However, if the individual worker does not command a strong negotiating position, he essentially has no choice at all but to sign whatever contract is offered. That’s why a return to a strong framework of award rates and conditions has been essential to guaranteeing a fair go for employees.
Yet, Mr. Turnbull persists with the argument that what he calls flexibility promotes productivity growth. The truth is that it does, but it all depends on how you define flexibility and productivity, and how you measure the economic outcome. If all that matters is that you achieve maximum output at minimum cost, then it is plain common sense to see that making employees work longer for lower pay will achieve exactly that. The company bottom line looks terrific, and the gross national product looks impressive so long as there are still enough jobs to keep unemployment under control, but one crucial factor is completely overlooked. That is the question of just who it is that enjoys the benefit of that productivity growth.
The fact that the economy might be powering along pumping out terrific growth figures doesn’t do much to reassure workers who are not participating in the benefits of that prosperity because they have been forced to sign work agreements that leave them out in the cold. Instead, it is the big companies, the directors, the executives and the shareholders who prosper because they have the benefit of the bargaining power in any contract negotiation. The idea that individual workers experience any kind of “choice” when negotiating with a corporate giant, or even a medium sized enterprise, is utterly ridiculous.
The fact of the matter is that a company, whether it is a major corporation or a modest business, is a collective entity with resources much more massive than any individual. It is a different kind of collective from unions or co-operatives or other entities, but it is a collective. It might be considered collectivized capital, just as unions are considered collectivized labour. The idea that reducing the power of collectivized labour could somehow make the system fairer is just simply wrong because the individual worker is quite clearly at a disadvantage.
The idea that it is more productive is also dubious, because if the economic system hacks the heart out of workers entitlements it begins to undermine its own foundation. In a consumer economy, the consumer is himself an essential commodity. Without consumers, the consumer economy crumbles, and that leaves all those politicians, bureaucrats, directors, executives, and shareholders who thought they were being so smart cutting costs and boosting productivity with nothing to sustain their own existence. The bottom line is that if the benefits of economic prosperity are not shared among all who participate in that economy, it can only be sustained by oppression. That is not what a free and democratic society is supposed to be all about.
Sunday, September 13, 2009
Julia Gillard Interview
11 September, 2009
Transcript - 2SM Mornings Program 10:10AM
Julia Gillard with Leon Delaney
(ISSUES: Labour force figures, stimulus package, BER, award modernisation)
LEON DELANEY: Deputy Prime Minister Julia Gillard, good morning.
JULIA GILLARD: Good morning.
LEON DELANEY: How are you today?
JULIA GILLARD: I’m good thanks. I didn’t hear you humming.
LEON DELANEY: Well that’s reassuring to know. Yesterday’s unemployment figures, 5.8 per cent holding steady, in some respect a good result and a little bit of a pleasant surprise but it does hide the darker secret of under employment doesn’t it?
JULIA GILLARD: You’re right Leon, you would have to say by the standards of the world with Australia at 5.8 per cent that shows we are weathering this economic storm well. You look at the United States for example, 9.7 per cent and we are holding steady at 5.8, but there are some troubling signs in these figures. Number one, we have seen the participation rate go down so the number of people who say they are looking for work has decreased and people are therefore being discouraged from looking for work. We’re continuing to see in these figures too, the substitution of full time jobs with part time jobs.
Now in some ways that means that, I think, employers and employees and unions are working together to keep people in part time work rather than losing their jobs all together, but it does mean that people want more work than they are getting now so that’s also a troubling sign in these figures. We have seen the number of part time jobs go to record levels so I think that’s part of the story here of the substitution of part time work for full time work.
LEON DELANEY: If we are seeing so much part time work and a reduction in hours for people in casual positions can we really have that much to be celebratory about? Obviously people will still find it very difficult to make ends meet.
JULIA GILLARD: Well to use a phrase that’s becoming common parlance, I think what it shows is that we are not out of the woods yet.
LEON DELANEY: Not out of the woods yet.
JULIA GILLARD: Look, we have always said that the global recession was going to hit our economy, we needed economic stimulus, we continue to need that economic stimulus and that’s what our school buildings program is all about. Real jobs doing real work building the school buildings we need for the future so we need that to keep rolling out to support jobs in our economy today. But we said to the Australian people as well, even with economic stimulus we are expecting the unemployment rate to go up.
Economists have this term where they say unemployment is a lagging indicator. That means you get a big economic shock like the global recession but it takes some time for it to show in employment and unemployment numbers. We are preparing people for the fact that we expect unemployment to continue to rise. What we do know is it would have been a lot worse without economic stimulus in the form of school buildings and investments in roads and rail and port and of course in the national broadband.
LEON DELANEY: Well the stimulus package is no doubt important but there is still quite considerable suggestion, quite considerable criticism that perhaps it could be better targeted with, not just the Opposition, but now a delegation of QLD mayors, the council of mayors of South East QLD, apparently coming forward and suggesting that it’s all very well to spend money on school halls but they’ve got shovel-ready infrastructure projects of lasting economic benefit including rail and infrastructure projects. Why shouldn’t they be given priority?
JULIA GILLARD: This is a government that has invested, as part of economic stimulus and creating real jobs, protecting and supporting real jobs during the global recession, this is a government which has invested in roads, in rail, in local government infrastructure. My colleague Anthony Albanese has run a major program to work with local governments to build the community infrastructure they have been crying out for and as part of economic stimulus and supporting real jobs we have been there working with every school around the country so that they can get the infrastructure they need. Now I know people are using the terminology school halls…
LEON DELANEY: Well the actual terminology, the Julia Gillard memorial school halls and I’m sure that tickles you quite considerably.
JULIA GILLARD: I know people are using that terminology in a pejorative sense but when I go to schools and I see kids crowded in facilities that were possible new 50 years ago but are in really not very good condition now, when I go to schools where there is no spot in the school where you can bring the whole school together, you can’t have whole school activities, when I got to libraries that look exactly like the library that was in school when I was a schoolgirl, whereas all of the world has changed about libraries through information technology, then I think we have to say to ourselves we can do better by Australian kids in every school and having good facilities makes a difference to learning. It’s part of what matters and of course in our education revolution we are also delivering more resources to combat disadvantage in education, measures to improve teaching, more investments in literacy and numeracy. But whether you end up with a good education, reading and writing, whether you’re ready for work and ready for the rest of your life, things like school libraries, the ability to have whole school activities in school halls, modern classrooms with good facilities all matter.
LEON DELANEY: Was it a little bit cheeky to put signs up outside all those schools which have now been found to be something that would constitute electoral matter?
JULIA GILLARD: Well it’s perfectly standard practice for federal government funds to be acknowledged in construction projects and that’s what the signs are about. If the Australian Electoral Commission thinks that they should be authorised then of course they will be authorised.
LEON DELANEY: Very quickly before you go there is also a question today about aged care nurses in particular suffering potentially significant pay cuts as a result of award modernisation. Now they are not the only ones who have concerns but in their case they’re talking about income losses of up to $295 a week. Is it true that aged care nurses and others could well be disadvantaged by the award modernisation process?
JULIA GILLARD: We’ve got an award modernisation process in train at the moment. It’s happening over two years overseen by the independent umpire, the Australian Industrial Relations Commission, so we’re certainly saying to people keep working with the commission to make sure that your modern award is right, and we’re also saying to people that we have legislated - it’s the law of this country - that if a worker at the end of the award modernisation process believes that they have been disadvantaged, they are able to get a take home pay order which will guarantee their take home pay.
What’s this all part of, what’s the broader picture? Well the broader picture is killing Work Choices which meant that people’s pay and conditions could be stripped away perfectly legally and there was absolutely nothing that they could do about it, and its part of making sure that we have an award safety net that is simple and there for the future. It’s not much point having awards if employers pick them up and can’t understand them and employees pick them up and can’t understand them and everybody is confused. We want an awards system where people can find the award that applies to them, read them and understand it and make sure that it’s really living and breathing in their workplace because it’s a document that is able to be picked up and understood.
LEON DELANEY: Nevertheless, it might be seen as having an undeliverable promise, a foolish promise, to suggest that no worker will be disadvantaged and no employer will have to pay more. You can’t satisfy both promises can you?
JULIA GILLARD: Well we said to the Australian Industrial Relations Commission when we started this at the start of last year, look we are going to get rid of Work Choices. That means that people are going to have safety net in work they can rely on. We want that safety net to be a modern one and so we want you, the Australian Industrial Relations Commission, to modernise awards with two objectives in mind. We don’t want employees disadvantaged, we don’t want big cost increases for employers, we are going to make sure there is a full five-year phasing period for changes so this is all sensible and measured in the transition and then we have legislated an extra reassurance for working people through our take home pay orders.
LEON DELANEY: So they’re objectives now but they were originally promises weren’t they?
JULIA GILLARD: They were always objectives of the award modernisation process and then the law guarantees through the take home pay orders that people have got an ability, if they that think there is a problem, to approach the industrial umpire and get a take home pay order.
LEON DELANEY: Thanks very much for your time today.
JULIA GILLARD: Thank you.
LEON DELANEY: Thanks very much. Julia Gillard, Deputy Prime Minister and Minister for employment and industrial relations.
ENDS.
Transcript - 2SM Mornings Program 10:10AM
Julia Gillard with Leon Delaney
(ISSUES: Labour force figures, stimulus package, BER, award modernisation)
LEON DELANEY: Deputy Prime Minister Julia Gillard, good morning.
JULIA GILLARD: Good morning.
LEON DELANEY: How are you today?
JULIA GILLARD: I’m good thanks. I didn’t hear you humming.
LEON DELANEY: Well that’s reassuring to know. Yesterday’s unemployment figures, 5.8 per cent holding steady, in some respect a good result and a little bit of a pleasant surprise but it does hide the darker secret of under employment doesn’t it?
JULIA GILLARD: You’re right Leon, you would have to say by the standards of the world with Australia at 5.8 per cent that shows we are weathering this economic storm well. You look at the United States for example, 9.7 per cent and we are holding steady at 5.8, but there are some troubling signs in these figures. Number one, we have seen the participation rate go down so the number of people who say they are looking for work has decreased and people are therefore being discouraged from looking for work. We’re continuing to see in these figures too, the substitution of full time jobs with part time jobs.
Now in some ways that means that, I think, employers and employees and unions are working together to keep people in part time work rather than losing their jobs all together, but it does mean that people want more work than they are getting now so that’s also a troubling sign in these figures. We have seen the number of part time jobs go to record levels so I think that’s part of the story here of the substitution of part time work for full time work.
LEON DELANEY: If we are seeing so much part time work and a reduction in hours for people in casual positions can we really have that much to be celebratory about? Obviously people will still find it very difficult to make ends meet.
JULIA GILLARD: Well to use a phrase that’s becoming common parlance, I think what it shows is that we are not out of the woods yet.
LEON DELANEY: Not out of the woods yet.
JULIA GILLARD: Look, we have always said that the global recession was going to hit our economy, we needed economic stimulus, we continue to need that economic stimulus and that’s what our school buildings program is all about. Real jobs doing real work building the school buildings we need for the future so we need that to keep rolling out to support jobs in our economy today. But we said to the Australian people as well, even with economic stimulus we are expecting the unemployment rate to go up.
Economists have this term where they say unemployment is a lagging indicator. That means you get a big economic shock like the global recession but it takes some time for it to show in employment and unemployment numbers. We are preparing people for the fact that we expect unemployment to continue to rise. What we do know is it would have been a lot worse without economic stimulus in the form of school buildings and investments in roads and rail and port and of course in the national broadband.
LEON DELANEY: Well the stimulus package is no doubt important but there is still quite considerable suggestion, quite considerable criticism that perhaps it could be better targeted with, not just the Opposition, but now a delegation of QLD mayors, the council of mayors of South East QLD, apparently coming forward and suggesting that it’s all very well to spend money on school halls but they’ve got shovel-ready infrastructure projects of lasting economic benefit including rail and infrastructure projects. Why shouldn’t they be given priority?
JULIA GILLARD: This is a government that has invested, as part of economic stimulus and creating real jobs, protecting and supporting real jobs during the global recession, this is a government which has invested in roads, in rail, in local government infrastructure. My colleague Anthony Albanese has run a major program to work with local governments to build the community infrastructure they have been crying out for and as part of economic stimulus and supporting real jobs we have been there working with every school around the country so that they can get the infrastructure they need. Now I know people are using the terminology school halls…
LEON DELANEY: Well the actual terminology, the Julia Gillard memorial school halls and I’m sure that tickles you quite considerably.
JULIA GILLARD: I know people are using that terminology in a pejorative sense but when I go to schools and I see kids crowded in facilities that were possible new 50 years ago but are in really not very good condition now, when I go to schools where there is no spot in the school where you can bring the whole school together, you can’t have whole school activities, when I got to libraries that look exactly like the library that was in school when I was a schoolgirl, whereas all of the world has changed about libraries through information technology, then I think we have to say to ourselves we can do better by Australian kids in every school and having good facilities makes a difference to learning. It’s part of what matters and of course in our education revolution we are also delivering more resources to combat disadvantage in education, measures to improve teaching, more investments in literacy and numeracy. But whether you end up with a good education, reading and writing, whether you’re ready for work and ready for the rest of your life, things like school libraries, the ability to have whole school activities in school halls, modern classrooms with good facilities all matter.
LEON DELANEY: Was it a little bit cheeky to put signs up outside all those schools which have now been found to be something that would constitute electoral matter?
JULIA GILLARD: Well it’s perfectly standard practice for federal government funds to be acknowledged in construction projects and that’s what the signs are about. If the Australian Electoral Commission thinks that they should be authorised then of course they will be authorised.
LEON DELANEY: Very quickly before you go there is also a question today about aged care nurses in particular suffering potentially significant pay cuts as a result of award modernisation. Now they are not the only ones who have concerns but in their case they’re talking about income losses of up to $295 a week. Is it true that aged care nurses and others could well be disadvantaged by the award modernisation process?
JULIA GILLARD: We’ve got an award modernisation process in train at the moment. It’s happening over two years overseen by the independent umpire, the Australian Industrial Relations Commission, so we’re certainly saying to people keep working with the commission to make sure that your modern award is right, and we’re also saying to people that we have legislated - it’s the law of this country - that if a worker at the end of the award modernisation process believes that they have been disadvantaged, they are able to get a take home pay order which will guarantee their take home pay.
What’s this all part of, what’s the broader picture? Well the broader picture is killing Work Choices which meant that people’s pay and conditions could be stripped away perfectly legally and there was absolutely nothing that they could do about it, and its part of making sure that we have an award safety net that is simple and there for the future. It’s not much point having awards if employers pick them up and can’t understand them and employees pick them up and can’t understand them and everybody is confused. We want an awards system where people can find the award that applies to them, read them and understand it and make sure that it’s really living and breathing in their workplace because it’s a document that is able to be picked up and understood.
LEON DELANEY: Nevertheless, it might be seen as having an undeliverable promise, a foolish promise, to suggest that no worker will be disadvantaged and no employer will have to pay more. You can’t satisfy both promises can you?
JULIA GILLARD: Well we said to the Australian Industrial Relations Commission when we started this at the start of last year, look we are going to get rid of Work Choices. That means that people are going to have safety net in work they can rely on. We want that safety net to be a modern one and so we want you, the Australian Industrial Relations Commission, to modernise awards with two objectives in mind. We don’t want employees disadvantaged, we don’t want big cost increases for employers, we are going to make sure there is a full five-year phasing period for changes so this is all sensible and measured in the transition and then we have legislated an extra reassurance for working people through our take home pay orders.
LEON DELANEY: So they’re objectives now but they were originally promises weren’t they?
JULIA GILLARD: They were always objectives of the award modernisation process and then the law guarantees through the take home pay orders that people have got an ability, if they that think there is a problem, to approach the industrial umpire and get a take home pay order.
LEON DELANEY: Thanks very much for your time today.
JULIA GILLARD: Thank you.
LEON DELANEY: Thanks very much. Julia Gillard, Deputy Prime Minister and Minister for employment and industrial relations.
ENDS.
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