SUBJECTS: ADF pay, public service job cuts and G20
PHILLIP CLARK: Gai good morning, how are you?
GAI BRODTMANN, FEDERAL MEMBER FOR CANBERRA: Morning Phillip, very well thank you.
CLARK: Angus, are you well?
ANGUS TAYLOR, FEDERAL MEMBER FOR HUME: Very well Phillip.
CLARK: Can we talk about public service pay; it’s an issue that’s very much alive here. The Government says ‘we are very sorry about the ADF pay deal, but everyone else’s is basically going to be worse’ – that seems to be the suggestion as it sits. Angus, people are getting in your ear aren’t they about this?
TAYLOR: oh yeah, look I’ve got a few, and there’s no question that pay is always a big issue and it’s an emotive issue. The thing we’ve got to remember here Phillip is that the CPSU’s claim of 12.5 percent is a big one and it would mean that to balance the budget we would have to get rid of another 10 thousand jobs, and that’s certainly not something we want to do. But the thing I would say here though that everyone is forgetting that if you want to raise wages, and we obviously do for everyone in Australia, you have to drive growth and productivity, and that hasn’t been happening in recent years. The G20 - and I know we’re going to talk about this - is all about drive growth and productivity. That has to be the main agenda here, and then we can have those things we want, which are higher wages.
CLARK: Do you concede though that the ADF pay deal is effectively a pay cut? It’s below the rate of inflation, it’s a cut. So we’re saying to the ADF ‘we’re going to cut your wages’.
TAYLOR: We are not indexing them over the next couple of years, and nor did Labor in the last couple of years of their government, so let’s be clear about this. This is a major issue that we’re facing now – we have got a big debt and deficit and more than that, we’ve got to get the economy back on track. And as we get the economy back on track, everyone can have higher wages and more prosperity. And that’s exactly what we want.
CLARK: Gai Brodtmann what do you say?
BRODTMANN: Well the ADF pay offer is a complete insult to our serving men and women. And just to pick up on Angus’s point – he suggests that wages effectively fell when we were in power, that’s nonsense. They went up on average; it was a 3 percent increase every year, so that’s absolutely nonsense. What the ADF personnel are being asked to accept – well they’re not even being asked because they have no say in this, unlike public servants who can go out and vote on their agreements or take industrial action, they can’t vote on their agreement. It’s worked out by the tribunal. So it’s up to the government to negotiate in good faith on their behalf, and they’ve let them down.
CLARK: This is Ben Roberts-Smith, he’s a VC winner as you know, and these days is chair of the Australia Day Council as well. This is what he has said on breakfast television this morning.
“We understand the current economic climate. We know the government was left with a deficit, there’s an issue around the pay rise, or the pay increase I should say. The fundamental responsibly of the community and government is to look after the soldiers to the point where none of them should ever want for anything, because they’ve made those sacrifices, and their families.”
CLARK: The point he makes there is fair. He kind of goes in there saying maybe we need to understand this, is that a fair comment, do you think?
BRODTMANN: But he makes the point that these people are defending our national security, our national interests, and that they need to be respected. And they need to be treated with respect, and that means a decent wage deal, that means actually allowing these people to keep up with the cost of living. They’re essentially being asked to take a pay cut.
CLARK: Isn’t there a thing going on here Angus, unfortunately as we’ve seen in the past Governments of both persuasions, but your side of the fence is in power at the moment, but bashing public servants in Canberra and saying ‘you’re not going to get anything’ plays well in other parts of the country, and the government sees no political cost in doing so.
TAYLOR: Phillip that’s not what we’re doing. The reality is that wages are struggling everywhere, in the private sector as well. The reason is very simple, any economist will tell you, you can always pay people more when productivity is rising and growth is going up. And frankly it hasn’t. Productivity has been sluggish for years and we have to fix it.
CLARK: Well you can achieve productivity in a number of ways, one way you can achieve it is by sacking people and by making fewer people do the same amount of work. That increases productivity and you’ve done that.
TAYLOR: Well Labor actually started that off –
CLARK: Regardless of who’s responsible – that’s what’s happened.
TAYLOR: No the truth is, productivity is really driven by delivering more for the same. That’s ultimately what happens in a growing economy which is what we want. And that is what we’re pursuing and that is why this G20 is so important. That’s why this trade deal is so important because then there will be the money to pay public servants more, and there will be the money for veterans and current serving personnel to be paid more.
CLARK: So you’re happy to look an ADF person in the eye right now and say ‘we’re cutting your pay’ at the same time that we’re asking you to go overseas and engage in dangerous missions?
TAYLOR: I’ve had these conversations and what I can say and what I will say is that we have to deal with the debt and deficit, but even more importantly than that we’ve got to get this economy back on track, productivity back on track, and that’s exactly what we’re pursuing.
BRODTMANN: Well just going back to your original point about the Coalition’s form when it comes to the public service, I’ve said it before on this program Phillip, the Coalition does have form on this, we saw what happened to this town in 1996 when 15,000 public service jobs were cut, we saw what happened to the local shops, we saw that people left town, we went into an economic slump, we saw the fact that house prices fell. So the Coalition, I believe has contempt for the public service and we’re now seeing that play out, in terms of the wage offers that are being put on the table for public servants – they’re essentially between naught and one percent – and it’s not just the wages it’s also the conditions that people are concerned about. Some agencies I understand are being asked to accept a 60 percent reduction in their conditions. Which is causing considerable concern, particularly to women.
CLARK: Alright, can we talk about the G20 for a second, is it just a talkfest? Anything likely to come out of this? I mean one of our submissions, the government’s submissions, is that we should cut the unemployment benefit as a way of stimulating the economy?
TAYLOR: No it’s not a talkfest. Look what Gai misses and the Labor party doesn’t seem to understand – the old Labor party did, Bob Hawke certainly understood this – if you want to increase prosperity you have to drive growth. And the G20 is targeting an extra 2 percentage points of growth over the next five years. A lot of that will come from infrastructure investment, reducing red tape, increasing employment levels not reducing them, and these are the things we’re going to have to do if we’re going to be able to afford higher wages, and that’s exactly what we’re pursuing. The other thing I would say Phil that’s critical in this is these free trade agreements are very, very important. We’ve got two out of three, we’re on the cusp of three out of three – Korea, Japan and China. These are massively important –
CLARK: Let’s talk about the China deal in just a second, but just finally back on pay, Gai what are you saying in the current context would be a fair deal?
BRODTMANN: Well wages that keep up with the cost of living, that’s all we ask. Wages that keep up with the cost of living and that maintain standards of living for Canberrans and for ADF personnel – for those personnel who are defending our national interests.
CLARK: What would you give them? What would be your offer?
BRODTMANN: Well just look at what we’ve done in the past – with the ADF it was 3 percent on average a year. So we ask that it keeps up with the cost of living.
TAYLOR: The extraordinary thing here is Labor keeps giving out money it doesn’t have. It spent it all when it was in government and you can’t keep doing that. At some point it’s going to have to put out a plan to explain to the Australian people where the money’s coming from. And frankly, the only way they’re going to find any money is if we grow the economy and that’s exactly what we’re pursuing.
BRODTMANN: Phillip, it’s a matter of priorities. What is it – a multi-billion dollar paid parental scheme, or decent wages and conditions for our ADF personnel and also public service.
CLARK: We’re yet to see where those numbers will come from –
TAYLOR: Those numbers don’t add up –
BRODTMANN: And it’s also been budgeted for, the ADF -
CLARK: What’s your own position on the paid parental scheme Angus, half the party seems to hate it?
TAYLOR: And the end of the day, this is not what we’re talking about today. The point is, Gai can say that, but the numbers don’t add up and they never do with Labor. The last time we had a Labor government where the numbers added up was with Bob Hawke and Paul Keating and we’re not seeing that now.
CLARK: The China free trade deal – is it going to be good for Australia or is it just another instance of where we’ll trade off local advantage for the sake of a bigger a bigger bully, in a country like China?
TAYLOR: This is absolutely huge, I mean, we’ve known for years that getting open access to these markets in China, the fastest growing market in the world in what will be the biggest economy in the world in a short period of time, is an enormous opportunity –
CLARK: Everyone gets over excited about the size of the China market until they work out what the deal is – and the deals often – the Chinese are not stupid – they often turn out to be disadvantageous.
TAYLOR: Phillip, exhibit A is New Zealand. I worked with New Zealand in the 90s as they worked towards a free trade agreement with China for five years. I have seen how that free trade agreement has totally transformed their economy. They are the pin up now of the Western world in terms of their economy. They have done it on the back of a free trade agreement with China, and that’s exactly what we’re pursuing here.
BRODTMANN: Well we support trade liberalisation, but we are concerned about a number of elements in this agreement. We essentially just want more detail, greater transparency about what is actually being agreed - what is actually happening on foreign investment, what’s actually happening on sugar, what’s actually happening on the agricultural products and what’s actually happening on labour movement? That’s where we want more detail.
CLARK: Paul has called to say, this issue of Defence and productivity is a difficult one. How do you measure the productivity of overseas deployment anyway?
TAYLOR: But my point was, if you want to have more money for pay whether it’s in the public service or private sector, you need to drive productivity across the economy and that wasn’t happening under the last Labor Government. We’ve got to get that going and that’s what this G20 is all about.
CLARK: When is a time when it’s going to improve Angus?
TAYLOR: Well that’s what we’re pursuing now, that’s exactly what we’re pursuing now. We’ve created over 100,000 jobs in the last twelve months-
BRODTMANN: Your target was a million-
TAYLOR: And we’re expecting to create more. That’s not right Gai. And we will be creating a lot more in the coming years. Particularly if this G20 agenda and free trade agreement is put in place which is what we’re expecting.
CLARK: Alright Angus Taylor and Gai Brodtmann, good to see you in and thanks for chatting with us.
BRODTMANN: Thanks Phillip.
TAYLOR: Thanks Phillip.