World Today: Regional Australia, Wages and Jobs

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Papua New Guinea – Short Term Financial Support Facility
December 15, 1999

World Today: Regional Australia, Wages and Jobs


Transcript No. 99/96


The Hon Peter Costello MP


World Today

Monday, 13 December 1999

1.45 pm

SUBJECTS: Regional Australia, Wages and Jobs


The Treasurer, Peter Costello, has in fact completed his Cabinet commitments after

lunchtime, he’s joined us in our Canberra studio at Parliament House now to explain

his position. Mr Costello is speaking to Alexandra Kirk.



Treasurer, on reflection was it a bad idea to raise the prospect of lowering wages in

regional Australia?



Well, I raised the prospect of flexibility. And what I said in relation to flexibility,

is that people have got to have the right to try and get the best deal for rural and

regional Australia. And what I said is, that in some areas some of the benefits can be

turned to advantage, such as the benefits in relation to housing. It may well be that you

can trade off housing in relation to employee packages and the like. And if you had these

additional flexibilities, that would help rural and regional Australia. And I think the

proof is there, isn’t it? If the flexibility is open to people, and they can use it

to attract investment for unemployed people, that will be a good thing.



There already is recognised in the industrial relations system, a principal of

inability to pay. So what more do you want, when employers can actually lower wages if

they can’t afford to pay anymore?



Well, I know incapacity to pay has been run on many occasions in particular industries,

and there’s a whole chequered history in relation to that. I’m not talking about

the incapacity to pay, I’m talking about new job opportunities for the unemployed.

Now, let’s suppose there are people that are unemployed. What do we do to get new

investment to help them? One of the disadvantages, generally speaking, in regional

Australia is transport costs. You’re always going to build a new plant closer to a

market, maybe a shipping port or something like that. One of the things the

Government’s working on, of course, is diesel fuel rebates to try and lessen the

disadvantage that regional Australia has in relation to transport. Now, in relation to

terms and conditions of employment, one of the advantages that rural Australia has, is

that you don’t have to pay over-priced housing costs like you might have to in

central business districts. That might actually be an advantage in attracting new

investment – executives that can have a better lifestyle and employees who are able to get

better housing on the same wages, and therefore are able to contribute their skills and

start enterprises up. And I think it’s a question really of going through all of the

areas and trying to use as much flexibility as possible.



And how does this apply then to say the lower paid workers? You’re talking about

the executives here.



Well, if you get new investment, you get executives that are starting up new plants,

you can create new jobs. That’s the whole idea. Everybody’s saying . . .



What about the . . .



. . .quite rightly . . .



. . . wages of the low paid?



Oh well, anyone who’s currently in a job, obviously is quite happy with, is not

going to agree to a wage cut. And nobody would suggest for a moment that anybody

that’s currently in a job would agree to a wage cut. What we’re saying though,

is if you happen to be unemployed, if you’re getting no wage and you want to get out

of unemployment and get into the labour market, the only way you’re going to do it,

is if there’s new investment. The only way you’re going to get new investment is

if it becomes attractive. What are the advantages that the bush has? Well the bush has

lifestyle and the bush has housing advantages. And if you can use the flexibility to

create that kind of investment that would be good for people who are unemployed.



Are you talking about lowering the wage below the award, below the safety net?



Nobody who is currently receiving an award, obviously, would want a lower wage. Nor

should they. But what about somebody who’s unemployed, who’s got no wage?



So there should be what, a special award for an unemployed person?



You should have flexibility. And the Government’s been working towards this

flexibility so that you can get new enterprises off the ground and create new jobs.



So you’re talking about a new type of wage to get new industries off the ground?



No, I’m talking about absolute flexibility, so that you can attract new

investment. And I’m talking about dealing with the areas of disadvantage,

particularly in relation to transport which is the main disadvantage area. Look, if people

are given the flexibility and the Government’s been working on giving them the

flexibility outside standard terms and conditions, you know, the arbitral matters, if that

flexibility is used, that can be used to the advantage of new job creation. That’s

the point. And new job creation is better for the unemployed.



But if you lower wages, doesn’t that mean more people end up going to the cities

where there are higher wages and you end up losing more people in the bush?



We’re talking about unemployed people. How do you get unemployed people into the

workforce? You won’t get it unless you attract the kind of investment that creates

new jobs. And you won’t create new investment for new jobs unless you can make decent

returns and you can address cost disadvantages. Now, I think, in regional Australia

we’ve got to turn those sorts of things to advantage. You’ve got to turn the

lifestyle to an advantage, housing to an advantage, community to an advantage to attract

new investment for new jobs. This is all about unemployed people, people who aren’t

getting any wages, getting new jobs.



So you’re talking about a new structure then?



No, I’m talking about using the existing system that the Government has put in

place and enhancing the flexibility and utilising the flexibility that we’re putting

in place. The reason why the Government’s put flexibility in place is to give people

the opportunity to trade these things. We should be able to trade hours. For example, for

working women who want to get home at 3 o’clock, being able to trade hours. And that

could be a really big advantage for flexibility in the workforce. It’s only if we

actually harness and use flexibility that people are going to overcome the obvious cost

disadvantages, particularly in relation to access to markets and transport that’s

currently working against regional Australia.



Peter Costello, thanks very much.



Thank you.