Doorstop Interview

Senate Courtyard

Parliament House

Thursday, 10 February 2005
12 noon

SUBJECTS: Labour force figures, industrial relations, asylum seekers, Xstrata

TREASURER:

In the month of January 44,500 new jobs were created in Australia and 24

thousand of those were full-time. More Australians are in work than ever before.

And our unemployment rate at 5.1 per cent, that continues to be the lowest we

have had in 28 years. There were some other good features about today’s

jobs news. The participation rate was very strong and what that indicates is

that more people are participating in looking for work and finding it and you

have heard me bang on and on about participation and how we need to increase

participation, these figures are very welcome. And we have also passed another

milestone. Since the Government’s election in 1996 there have now been

1.5 million new jobs created in Australia, so we have passed the 1.5 million

mark which is another great milestone for Australia and people looking for work.

But with 44,500 new jobs created in January, with unemployment continuing at

the lowest levels in 28 years, this means that job prospects for Australians

are better than ever before, more Australians are in work that ever before and

that will be welcome news for the families of Australia.

JOURNALIST:

How low can the unemployment rate go?

TREASURER:

Well, back in the early 1990s, the OECD said unemployment could go as low as

7 per cent in a full employment economy and we are now at 5.1 per cent. If we

can keep the rate low and increase participation that would actually be a good

thing because what it would mean is we are drawing more people into looking

for work. And I have been hammering this point about participation for quite

some time that we have to try and encourage more people to participate, we have

seen welcome news that more people are participating and it may well be that

the reason they are participating is that their prospects have never been as

good so we have got to keep working here.

JOURNALIST:

You have also been hammering industrial relations very hard especially this

week, how far should the changes go and in particular do you think the Government

now should vigorously pursue through the corporations power, a unified industrial

relations system?

TREASURER:

I think a uniform industrial relations system would be a very welcome reform

in Australia, very welcome.

JOURNALIST:

So should the Government pursue it through the corporations power?

TREASURER:

Well we should pursue it with the powers that are available to us, including

the corporations power – there might be some others – and we should…

JOURNALIST:

External powers?

TREASURER:

…and we should do it as a matter of priority. How far should industrial

relations reform go? It should go substantive, it should go for substantive

change for instance substantive improvement. You see, the issue now of course

is where you are getting low unemployment as we are, what we have to make sure

is this doesn’t spill across into wage demands, which are not based on

productivity. Because if that spills into wage demands which are not based on

productivity, which are not sustainable, you will get pressure on your inflation

rates. So we need a new round of industrial relations reform which can boost

productivity in Australia.

JOURNALIST:

So allowable matters down to four or five?

TREASURER:

Reducing allowable matters, increasing…

JOURNALIST:

..down to four of five?

TREASURER:

…contracts, ease of entry into the labour force, flexibility in relation

to hiring and firing, flexibility in relation to hours and conditions, flexibility

has got to be the hallmark of a modern society in the 21^st century.

JOURNALIST:

Should there be some sort of special conference involving the states and unions

and business and so on to reach some sort of accord?

TREASURER:

Well you know the States can, one of the ways you can get a unified system

is if the States hand over powers and the Victorian Government did that under

the previous administration so I would certainly welcome any state that was

prepared to follow that lead, that would be the simplest and easiest way to

get to a unified system.

JOURNALIST:

Treasurer do you have any concerns over the administration over the $100 million

regional partnerships programme?

TREASURER:

Well I think it is important that the programmes be administered well and there

be full accountability and I think there is. At the end of the day the reason

we have departments and the reason the departments put conditions and the reason

departments engage in these matters is to ensure that there is accountability

and I believe there is.

JOURNALIST:

What is your reading on how tight the labour market actually is, we have seen

a lot of, you know economists have been talking about this for a while but what

is your view?

TREASURER:

Well I think that there are areas where it is particularly tight, I have said

this, skills obviously. If you speak to the mining companies, for example, that

are doing investments they find it hard to get skilled labour. That has been

particularly a problem I think in say the energy and electricity areas. So some

areas are tighter than others. I shouldn’t just say skills by the way,

if you speak to the stone fruit growers of the Goulburn Valley they will say

there is a shortage of un-skilled labour too. These are all problems, but they

are the problems you want to have, believe me…

JOURNALIST:

Treasurer…

TREASURER:

…I mean the problems of a 5 per cent unemployment rate are much better

than the problems of an 11 per cent unemployment rate. I would rather have a

situation where there are jobs to go for those that want to work rather than

a lot of workers with no jobs to go into.

JOURNALIST:

Are you worried about a public sector wage explosion when you consider that

in Queensland for example, power workers were recently given 10 per cent a year

for the next three years?

TREASURER:

Well, I can’t believe that a 30 per cent wage increase over three years

can be backed up by productivity improvements and can be sustainable. I can’t

believe it. And what is the problem of that? Well the problem of that is if

other employers see that and say, ‘we have to get into this business too,’

and start matching it. That would be a problem and I think that it is important

that the State Governments show a bit of leadership in this area.

JOURNALIST:

I suppose Queensland for example they will just, the public sector unions will

just use the 10 per cent as their starting claim for their next negotiation.

TREASURER:

If people were to lodge flow-on applications and if those applications were

to be granted that would be a problem, absolutely. Look, we can afford to create

more jobs, we can afford to have real wage increases, we can do all of that,

as long as it is based on productivity. But if you get a situation where large

increases are being paid out and it is not based on productivity improvements,

something will break.

JOURNALIST:

Have you spoken to your state Liberal counterparts about your industrial reform

agenda? Do they support a unified framework?

TREASURER:

Well I am sure that they would support improvements, I haven’t asked,

the answer is no, I haven’t spoken to them individually.

JOURNALIST:

Do you have any view on the remarks made by Petro Georgiou this week about

asylum seekers? Do you think that there is a case for a change of Government

policy?

TREASURER:

Look, my view is that the fewer illegal arrivals in Australia the fewer people

are going to be in detention centres. And there are far fewer people in detention

centres today when they were first introduced.

JOURNALIST:

But you have got one man who has been there for more than six years. Is that

fair?

TREASURER:

Now, you know, if you can stop the flow of illegals into Australia, numbers

in detention centres will decline and that is in fact what has been happening.

Now, you now, far from this being a reason to change policy on illegal entrants,

I think it is actually a reason to continue it. That is that you can keep your

numbers down, you can avoid the hardship that is involved in that, if the people

who are prepared to pay smugglers are dissuaded from trying in the first place.

JOURNALIST:

So you are not concerned with a man who has spent more than six years, who

can’t be deported because the other countries won’t take him, you

are not concerned about that?

TREASURER:

Look, we should always be interested in people’s rights, but if the implication

of your question is, do I think that the illegal arrival policy is wrong or

should be changed, my answer is no.

JOURNALIST:

What do you think we should do with this man?

TREASURER:

Look, in relation to people that are in detention, first of all arrangements

should be sought with the countries involved to see if they can be returned,

where they can resume their lives, that is what you are trying to do in situations

like this. You know, let’s be honest about this. A lot of people fled

Afghanistan to get away from the tyranny of the Taliban. The wonderful thing

now that the Taliban has been deposed is that you can live a safe and much better

life in Afghanistan. You know, actually improving conditions in some of these

countries is the most positive contribution that you can make.

JOURNALIST:

What do you make of Mr Georgiou’s idea to offer a one-off amnesty to

temporary protection visa holders?

TREASURER:

Look, people are entitled to put forward their own views and we respect their

own views. But I actually think that the policy as it has been applied, particularly

in dissuading illegal entrants from trying to enter Australia illegally in the

first place, has been successful.

JOURNALIST:

Mr Costello, the Trade Minister this morning indicated that he would like to

see conditions put on Xstrata’s bid for WMC which ensure that the company

develops uranium assets in (inaudible) Australia’s interests. And furthermore

he said that he has raised it with you personally, what is your response to

that?

TREASURER:

Look, at the end of the day, can I make this point, this is a decision for

the Treasurer under a statute. The wonderful thing about everybody else’s

position is they don’t have to make the decision, the difference for me

is that I do. Can I say to you I have to make this decision under a statute.

I have to carefully apply a statute. I have to afford natural justice, I have

to direct myself to the matters that the statute prescribes. And if I don’t

do that I don’t properly exercise those powers. So I will be doing that

and when I have properly directed my mind to all of the things that I am required

to by law, after I have made the decision, I will announce it and I will explain

it. But until that happens I am not going to have a running commentary on the

outcome of my decision. Besides anything else, parties would say that I have

prejudiced my hearing or that they haven’t had natural justice.

JOURNALIST:

Is this debate making your decision harder?

TREASURER:

I am a pretty robust person. Thank you very much.