Event: BCA Chief Executive Bran Black interview with ABC Radio National Breakfast

Speakers: Business Council of Australia Chief Executive Bran Black; ABC Radio National Breakfast Host Patricia Karvelas 

Date: 3 October 2024

Topics: Industrial relations, unions, junior pay rates, productivity, multi-employer bargaining, cost of living, job security, employment, economy, business conditions

EO&E

Patricia Karvelas Host, ABC RN Breakfast: Do you think that a young person that might be taking your coffee order this morning or leading you to the correct isle in the grocery store, apologies to my local supermarket for me asking that all the time, or restocking the shelves should be paid an adult wage? Now the Shop Distributive and Allied Employees Association, the SDA, as it's called is at the Fair Work Commission pushing to scrap junior wage rates for workers aged between 18 and 21. The ACTU has backed them and the Federal Government says it won’t take a position. Bran Black is the Chief Executive of the Business Council of Australia and joins us on this issue. Welcome.

Bran Black Chief Executive, Business Council: Thanks so much for having me.

Patricia: The ACTU says it thinks scrapping junior pay rates should be a priority for a second term Labor government, which means pay rates for workers in retail, fast food, pharmacy who are under 21 years of age would be raised to an adult wage. Do you think that's good idea?

Bran: Look, we'd say a few things in this regard. The first thing that I'd note is that we want to make sure that young people have the opportunity to be employed, and if you have that pay rate for 18 to 20-year-olds that’s the same as people who are over 20, then that might act as a disincentive for young people to be engaged in employment. But the second thing is, and this is the most important thing, we've already seen such a huge amount of industrial relations change over the last two years, that businesses are saying we just can't take any more. And what's more, we've actually only just started to see some of these changes take effect. The most recent round of changes only came into effect at the end of August, so that's only really a few weeks ago. So businesses say, look, we've got insolvencies at record highs, 1200 in July alone, we've got a productivity problem, economic growth isn’t where it needs to be, we’ve just seen these changes come through. Now is not the time for more.

Patricia: Ok, just on the back to basics if we can, the concept, do you understand why young people feel like, if they're in that age group, it's unfair that they're doing the same labour, but being paid less.

Bran: I can understand absolutely that people say, well, we want to make sure that we're maximising how much we get paid. But, if you look at the broader issue at the moment, that people feel as though they're not getting ahead, that's because we've got a productivity problem, and in order to address our productivity problem, we've got to make sure we get our fundamental settings right.

Industrial relations is a core component of that. That means getting the right balance between employer interests and employee interests as well. And at the moment as I say, what we are hearing from employers is that the pendulum has swung way too far against them, and we need to try and claw it back. Let's remember that since December of 2022, real wages have actually declined by point six of a per cent. So we've seen wages go up, but people are feeling as though they're not taking home more money at the end of the day, and that's because they're not. In order for us to actually, genuinely give them that sense that they're taking home more money, we've got to help employers drive productivity.

Patricia: You say at the moment, there's been a lot of the language, because there's been a lot of change. So is it just at this moment, or is this a broader position you have in favour of youth wages as a sort of lasting thing in our economy?

Bran: I think it's a really good question, because you've got to look at the circumstances at any given time with respect to proposed wage rises, but at this particular time, what you can say with absolute clarity is that the very unambiguous feedback that I have, not just from my members, but from employers right across the country, is that now is not the time…

Patricia: But I still don't have clarity from you. With respect, does that mean at another time you do think there'd be a case?

Bran: I think what you've always got to do is look at the circumstances at any particular time. So all I can speak to is the time that we're in right now and say that with respect to this particular proposal, acknowledging all of those factors that I mentioned before, particularly around the changes that have come into effect already, now is absolutely not the time for more industrial relations change. And I just make the point that, you know, over the weekend, somebody came up to me, just something that I didn't know, and said; look, I've recognised you and I just wanted to day say thanks because I own a small business, and it's really tough right now, and we just need to make sure that we don't see more change that hurts us, because it's really hard.

Patricia: There is no doubt that business is having a tough time at the moment as ordinary people right, like across the board, it's a tough time. The ACTU Secretary Sally McManus says, and I'm quoting her, “young people don't get discounts on their rent or youth grocery bills, so why should they get youth wages?” It is true isn’t it? It's not like you get a discounted rate of living if you're a young person.

Bran: I think it goes to that point, though, in terms of what's the priority, and the priority has got to be making sure that young people have a job and there has to be an incentive for employers to bring on young people in circumstances where, in many instances, they might not have the experience of somebody who's a little bit older. So, there is that incentive point and again, I go back to the point in terms of it not being the right time, but more broadly, the challenges that young people are experiencing now, there is a sense of course, that there’s not a real case of intergenerational equity and you get that coming through in terms of cost of living. More broadly, you get that in relation to housing. You see that in terms of people's concerns with respect to climate change, it is incumbent upon us to genuinely address the underlying causes of those problems, and that's what we're trying to do in the policy platforms that we're putting forward as the Business Council ahead of the next election.

Patricia: On Radio National Breakfast, my guest this morning is the Chief Executive of the Business Council of Australia, Bran Black and we’re talking industrial relations broadly, but also these youth wages that are on the agenda at the moment. The Minister for Employment and Workplace Relations, Murray Watt, he was on the program this week, said that a review of Secure Jobs, Better Pay legislation will begin. Will you be taking part in that review and do you hope for some, what sort of changes could be made that still stick to the spirit of what the Government's tried to do?

Bran: Look, we absolutely will be taking part in that review. What we would say is that the key thing that we'd be saying is, please, no more change that imposes additional regulatory burden on businesses. The challenge that we've seen, particularly with that review that will be commenced with respect to that stage one reform that the Minister canvassed covers multi-employer bargaining, which is the real concern that we've had with respect to industrial relations laws from that stage.

Multi-employer bargaining, for listeners that are unfamiliar with the idea, is this concept that you bring together employers simply because they have operations in the same area. It might be a case on foot right now, coal mines in New South Wales, and the Fair Work Commission has made a decision already that because they are coal mines and they are located in New South Wales, they should be grouped together for the purposes of multi-employer bargaining.

Our argument, and I think experience and history bears this out, is that what makes businesses work is their capacity for uniqueness, their capacity to drive a unique approach to their operations and to how they engage with their staff, and the types of benefits and wages that they provide, and when you take that away, then you reduce their competitiveness overall.

Patricia: Are you going to be running a campaign and funding a campaign? We are launching into an election period, you know, we really are very close to it now campaigning actively against the Government's laws?

Bran: Our position is always with respect to individual policies. So, we’ve got a position with respect to policies that are put forward by governments, oppositions, independents, and we argue in favour of what we regard as good policy that drives national prosperity, and we argue against policy that does the opposite.

What we're going to be focused on ahead of this election is what we've regarded as the key issues that are on the table that really, genuinely should be addressed. So how do we deal with cost of living? What can we do to tackle the housing crisis? How do we deliver net zero with affordable and reliable energy by 2050? What do we need to do in order to make sure we've got our care needs for the future accounted for? And how can we drive the skill sets that the country needs?

Those are going to be our focus points, and we hope that over the course of the election campaign that all sides of politics and everybody in between takes up as many different policy proposals that we put forward as possible.

Patricia: As it stands, from the announcements that have been made, would you say that your objections to certain policies are sort of in equal measure with the two parties?

Bran: Look, I think that it's of course too early to make a general comment, I think, in relation to the parties’ policies…

Patricia: Can you articulate the policies on the Coalition side that you see as anti-business?

Bran: I think that the critical thing for us here is, and we're genuinely trying to focus on those core areas that we regard as being most important, those five that I mentioned before. We do want to see policy going forward into the election with respect to industrial relations that tries to switch the pendulum back a little bit further in favour of the employers, or at least not as far as it's swung in favour of unions at the moment, and that's an area that we'll be campaigning on in terms of the policy advocacy that we put forward. But our focus is very much on those core areas that I mentioned that are intended to, from our perspective, really drive prosperity and productivity outcomes.

Patricia: Thank you for joining us.

Bran: Thank you so much for having me.