Interview with Louise Saunders, ABC Mornings, 10 January 2012

10 January 2012

Please read or listen to my interview on ABC Mornings.

Subject/s:  award rates for hospitality industry

Interview with Louise Saunders, ABC

Louise Saunders: Do you work on a Sunday? Do you work specifically on Sundays or evenings to attract the penalty rates? Perhaps you need the additional money to meet your costs. Do you choose to work that? Is it fair cost? Is it fair recompense for you for perhaps what you give up in terms of family time? The SMS number is 0438 922 936.  With me is the Minister for Workplace Relations Bill Shorten. Minister, good morning.

Bill Shorten: Good morning.

Louise Saunders: There's certainly an argument, particularly within the hospitality industry, as to whether the costs are just too much for the costs of doing business, up to three times the normal wage for working on Sundays. As the chef George Calombaris puts it, $40 for someone who has not had to go to university for 15 years. Do they have a fair point that their costs are just excessive?

Bill Shorten: I don't know the business models of particular restaurateurs, but I don't accept that everyone's getting triple time on Sundays. I think that's a fairytale. I also believe that when we talk about wages in the hospitality industry, the fact of the matter is that, along with farming and retail, hospitality is amongst the three lowest paid industries in Australia and that's below the median wage.

So I get that restaurateurs and small business want more flexibility. Some of them don't like paying double time on a Sunday. Sunday comes once a week.

I do accept that in the award process the hospitality industry is entitled to run a case for looking at the status quo. But I'm very wary of saying that the way for industry to succeed in Australia is to cut real wages.

Louise Saunders: Steve Old from the Hospitality Association argues that it is a unique industry and should be given such regard and treatment and that margins are so low that the costs really do have an impact.

Bill Shorten: Well, let's examine that. Tourism is an important and unique industry and it's a growth industry for Australia. It is really important and Australia is lucky to have a lot of the people who work so hard and invest their money and actually take risks to grow tourism in small to medium enterprises.

At the same time, this proposition which says that we're unique, therefore - and our margins are small. There are plenty of industries who've got small margins.  So where do you draw the line? Where do you say that we'll just get rid of the safety net and create an American style system with a low minimum wage?

I mean, if you want to start saying that penalty rates, which aren't negotiated, but which are just taken away, where do you draw the line? What about rosters and where do you draw the line about a minimum wage? Perhaps we should get rid of superannuation. I mean that's not what people are saying. But you've got to have a consistent logic. Most business would argue they're unique. Most business would argue that margins are under pressure. But the minimum wage for a waiter or a kitchen hand is $17 or $18 an hour. It's hard to earn a living and raise a family on those wages.

Louise Saunders: You asked the question, posed the question where do you draw the line. Is that something you're actually prepared to consider? Or are you suggesting that there is no such thing, there is no line that can be drawn?

Bill Shorten: No. We're going to review the - Fair Work Australia, I should say, is going to review the award system, the modern awards, employers and companies and their associations, because all the individual employers belong to unions and employer associations. They're welcome to put cases about changing aspects of the award system based on evidence. But I think that a generalised cry, well let's cut the Sunday rates and then everything will be better - I think life in business is more complex than that.

We've got a high dollar which is putting pressure on tourism. I think one of the biggest challenges for many people in the hospitality industry is getting skilled workforce. Now the truth of the matter is, one of the reasons why it's hard to attract skilled workforce is if you pay peanuts, you know, you're not going to get the best workforce.

So I think that part of where wages are at the moment in Australia is a reflection of supply and demand and we shouldn't forget the hospitality industry already is below the median wage.

Louise Saunders: The ability that does exist to negotiate with workers to increase productivity is there.

Bill Shorten: Sure.

Louise Saunders: There's concern - and it was raised by Gary Black - that it's just too complicated. Even larger organisations with industrial representation or lawyers find it difficult to wade through. Do you agree perhaps that is an area that could be streamlined?

Bill Shorten: I'll always listen carefully to how you eliminate red tape. But negotiations shouldn't be too hard for Australians. We negotiate every day. Before I came into Parliament I did probably 1000 enterprise agreements. Some of those agreements bundled up penalty rates into a salary. I think what it is though, is if you expect long term quality responses without putting long term quality effort into your human resources, into you people, it becomes hard to expect great outcomes.

People aren't dumb. People work hard. I don't buy this logic that Australians are lazy. I don't buy the logic that Australians can't negotiate. But if you want to get good outcomes with your staff - and I've employed people - it's not just a theoretical textbook I'm quoting here - if you want to get the best out of people, then you have to put a lot of time into your relationships with them.

Louise Saunders: Minister, I'll leave it there. I appreciate your time at short notice this morning. Thank you.

Bill Shorten: It's a pleasure.  Thank you.