Jennifer Westacott interview with Fran Kelly, RN Breakfast

Event          Business Council chief executive Jennifer Westacott interview with Fran Kelly, RN Breakfast

Speaker      Fran Kelly, Jennifer Westacott and Sally McManus

Date            31 March 2020

Topics         JobKeeper payment, COVID-19 response

E&OE

Fran Kelly, host RN Breakfast: The so-called JobKeeper wage subsidy of $1,500 a fortnight is around 70 per cent of the median wage but it's still less than what the unions have been calling for. Distressed businesses, however, have been clamouring to sign up. The government says it has received more than 65,000 applications for the payment at 9pm last night. Sally McManus is secretary of the ACTU and Jennifer Westacott is chief executive of the Business Council. Welcome both of you back to breakfast.

Jennifer Westacott, chief executive Business Council of Australia: Thanks very much.

Sally McManus, secretary ACTU: Good morning Fran.

Fran: So Sally McManus this JobKeeper payment comes in at $10 more than the current minimum wage of around $740 a week, do you welcome this?

Sally: Yeah look we do. We've pushed really hard for this along with business as well. The last couple of weeks has been an absolutely horrendous one for working people, so many jobs lost. And this is what is now needed to give confidence back into the system for working people and for employers so that they can keep people on. 

Fran: You've been calling for more, the union movement have been calling for more. As the treasurer pointed out, this is 70 per cent of the median wage but it's 100 per cent wage subsidy for many who are in the retail sector for instance, the hospitality sector who only get the minimum wage anyway. So, generally, this notion of a flat wage like this, are you happy with that?

Sally: Well it's not what we're asking for, you're right. We were wanting it capped at the medium wage which would actually be $1,375 a week, for those who are earning a lot more. Having said that, they've made this big move in the first place and in other countries where it hasn't been enough they've lifted it. So obviously we'll be happy to go with it as it is. If we can fix the problems for casuals so that we can keep people in jobs.

Fran: Jennifer Westacott, 8,000 applications from businesses in the first hour after this announcement. When we woke up this morning it was over 65,000 businesses had applied. Is this the medicine struggling businesses had been hoping for?

Jennifer: Absolutely. I think this is one of these country saving moments. You know, six million people getting paid, six million people getting a decent standard of living, being able to stay attached to their employer, together with their employer rebuilding their businesses. This is the hope and confidence that we needed to get through this. And of course, it comes on top of, you know, $180 billion package last week. Again, trying to keep people in work, keep small businesses going. So I think these are the things that are going to get us through this. I don't think there's anybody who isn't absolutely praising the breadth of this, the depth of this and I think this is an absolute hope-giver to all of Australia.

Fran: And in terms of length and breadth, the subsidy is offered to large businesses as well as small. As long as they meet the criteria that turnover has declined by 50 per cent due to the virus. That's for large businesses. Are you surprised by that? And why is it important that companies like your members with all the resources at their disposal, you know some of our largest companies, get the same access to this subsidy.

Jennifer: Look I think this has got to be across the whole economy. I think that's one of the advantages of the way they've designed it, big and small. Because if you have these big companies Fran go over, you will see mass job losses and these are the companies of course that have got to be there to get the economy going again. These are the big investors, the big employers and I think it's been important that this applies to all businesses. But of course, the hurdle rate for large businesses in terms of having to have seen a 50 per cent loss of revenue is a much tougher one and so it should be.

Fran: Okay so will it ensure that businesses actually keep their employees on the books? That's the holy grail, that's what the government wants, to keep people off the dole queue. So they are not unemployed, untethered, and they are there ready to take their places. Do you think that's how businesses will respond to this?

Jennifer: Well I think that's how they should respond. I think that's how it should be designed. This is all about making sure that we keep people attached to their workplace and we keep those businesses able to bounce back. So it would be interesting to see what the government's guidelines are there. But of course, it should be designed in a way that, you know, employers keep their workers attached, keep them on, don't make them redundant and I think that's got to be as tight as it can be.

Fran: And Sally, do you have any concerns about that? Because in fact, that's the only way sacked workers will get this JobKeeper allowance, this $1,500 a fortnight, is if their employer signs up and it goes through the payroll system. So the onus is on business to do that. Are you concerned that some businesses, sort of, see this as an excuse for unfair dismissals this period?

Sally: Yeah look that would be absolutely, totally unacceptable if they did do that. We're calling on all businesses across the country to keep the workers on. They're now going to be receiving a wage subsidy to do it, there's really no excuse. It would not be a good look at the moment for any company to be laying people off when they can access this. One thing we are really worried about is casuals. You'll notice part of what they've announced is you've got to be in a job for 12 months. Well, a lot of casuals haven't been. You think about the university sector, more than half the university staff are casuals. They were all expecting to start work at the beginning of the term and they didn't because of the restrictions on travel. We've got to make sure that people like them are covered and people that have been working less than a year. It's got to be a wage subsidy for all. So that's something hopefully that can be tweaked to make sure that we pick up everyone who is affected. 

Fran: Are you thinking there too about, sort of, all the gig economy workers? All the Uber drivers, the Deliveroo riders, all those people?

Sally: Well a lot of those are sole traders, contract workers which we've been told are covered by it. We haven't seen the detail so of course, we've got to look at that. But you've got to cover those workers. You've got to cover them and you've got to cover all casuals.

Fran: But those who are casuals will still be able to get the JobSeeker allowance which is a beefed-up, doubled Newstart allowance. I mean the government does have a beefed-up subsidy for those, well safety net for those.

Sally: Sure and if you're a really low paid worker the difference between those two, I mean the JobSeeker allowance will probably be okay but there's plenty of casuals that are actually earning a lot more than that and in regular employment. But may not have the continuity of this strict 12 months. We don’t want to see people fall off it because of that. So, it's just something I think the government hasn't fully thought through and I'm sure that it's something they could fix.

Fran: Jennifer Westcott do you second that? Or do you think it's broad enough?

Jennifer: Look I think it's more than...

Fran: It's $130 billion already.

Jennifer: Yeah it's right. There has to be, kind of, boundaries drawn around things. I think it's got to be taken in tandem with the things you've just talked about Fran. The doubling of Newstart, the $750 assistance to people in two chunks, the rent relief, the mortgage deferrals, the no evictions policy, it's all got to be taken together. All about keeping people going, keeping them with a capacity to get back to work. But what I think the government's shown, both the state and the Commonwealth government particularly, is that they are willing to adjust things as things get worse. And they are willing to do more as things get worse. So this might be one of those areas where we really need to focus and say, 'do we need to do more for these casual workers?'

Fran: It's four minutes to seven, our guests are Sally McManus from the ACTU and Jennifer Westacott from the BCA. Jennifer, just to you, do you think this subsidy will save businesses? Do you think some of those that are still operating, maybe struggling but still operating, might still have to close?

Jennifer: Look I think overwhelmingly this will save many, many businesses. Many that would have gone under. I think the crucial point is that it's got to seen with these other things I just talked about. You know the $100,000 upper limit for the withholding tax that was announced last week. All of the things that were announced in the weeks before, depreciation allowances to allow people to start investing again. This is, of course, the huge injection that was needed. Look there will be some companies, Fran that were, kind of, marginal before this, they will struggle to get back up. But I really think this will be the underpinning of the economy being able to come back and I think that's the critical importance that we needed to draw a line in the sand and say, 'we can actually recover from this and we will recover from this.' 

Fran: Sally McManus, just on that point it's not just sacked workers who will get this if their bosses keep them on the books, it's also companies that are still operating and they will get a subsidy if they've been hit by the virus, will get a subsidy for their workforce. Are there any guarantees that employers won't be able to just slash workers' wages to the subsidy level? Is this an issue? Or are you working anyway, I know that there have been some unprecedented changes to workplace awards negotiated by the unions at this time where workers are accepting a reduced wage.

Sally: It's not a reduction in wages, there's reductions in hours, and that makes total sense. If you think about it, especially the companies who can get this have got to have a big revenue drop, so they're not going to need people that are full-time. So, of course, we are now looking at that and what can be done. You've got to think this is a rare moment in history where you've got the union movement, the government and big business all agreeing. So we're going to do everything we can to keep people in jobs.

Fran: Is that a worry though that some employers might interpret this as, 'oh this is the subsidy I'm getting for you, this is what I'm going to pay you now while you still do your job?’

Sally: Well they actually can't under the law do that. So the $750 could be paid if you're stood down and when you're stood down you're not doing anything. So it's a subsidy, so for those in work it should be subsidising the existing wage. And the work we've got to do is to make sure that we have a system that allows full-time workers and part-time workers to be able to negotiate lower hours so that if a company can't afford to pay the full amount they can at least drop the wages for the period of time. 

Jennifer: I mean Sally is absolutely spot on there Fran, that's the key.

Fran: Hello Jennifer?

Jennifer: You've got me?

Fran: Yeah I've got you now.

Jennifer: Look I think Sally is spot on, the flexibility we need is around whether people work five days or three days. And can I say, the ACTU has been magnificent in working with business to keep that focus on keeping people employed. I'll just say this Fran, it's not in people's interest to do this. It's in people's interest to keep their employees connected so that their businesses can come back.

Fran: It sure is. And Sally McManus a vote of thanks for the ACTU there, do you also relish and welcome the closer relationship with business, just briefly?

Sally: Yeah absolutely. You know I hate using the term but it is certainly a 'Team Australia' moment and the BCA has been great too and the government has listened to both of us. It's been a united push to try and achieve this.

Fran: Team Australia, Sally McManus, Jennifer Westacott, thank you for joining us.