AFTERNOON AGENDA WITH KIERAN GILBERT
THURSDAY, 18 MAY 2023
SUBJECTS: Unemployment rate, minimum wage submission, Voice to Parliament.
KIERAN GILBERT (HOST): On one of our top stories today, an increase in the unemployment rate from 3.5 to 3.7 per cent. I spoke a short time ago with the Assistant Minister for the Treasury, Andrew Leigh.
ASSISTANT MINISTER FOR COMPETITION, CHARITIES AND TREASURY ANDREW LEIGH: Kieran, these are still extraordinary unemployment figures. To have an unemployment rate below 4 per cent is still essentially full employment in the Australian economy. Our Budget forecast that there would be a modest rise in the unemployment rate, but we do hope to maintain full employment because it's so important for ensuring that people have jobs, that we see equity in the labour market and that we see those steady wage rises, including the substantial wage rise number we saw this week.
GILBERT: Does it make another rate rise less likely, though? Does it give the RBA some time?
LEIGH: The Reserve Bank will make its independent decisions, but the numbers as they're coming out shouldn’t give macroeconomists any cause for concern. The government’s primary focus is to create an environment in which we can see a soft landing, deal with the unemployment challenge without leaving aside full employment. Right now, I think the signs are strong for that. Our Budget was focused on providing cost of living relief in a sustainable and measured way, delivering a small projected surplus while still delivering on our promises of cheaper childcare, cheaper medicines, energy bill relief, putting downward pressure on prices.
GILBERT: The bid for the minimum wage increase, you’re seeing the ACTU asking for 7 per cent. Business groups, more like 3.5 per cent. What’s your read on it? I know the government says wages should not go backwards, but do you accept a hike of 7 per cent would be inflationary?
LEIGH: Australia’s inflation problem isn’t being caused because cleaners and childcare workers are being paid too much. It’s because of a war in Ukraine and busted supply chains the Liberals did nothing to fix in their decade in office. Our focus is on ensuring that people who are doing the jobs of keeping our economy running, the so-called heroes of the pandemic, don’t go backwards in real terms. That was the minimum wage submission we put in last year. We’ve put in the same this year. And I think it’s up to the opposition to explain why they think it is appropriate for cleaners, childcare workers, hairdressers to be going backwards in real terms.
GILBERT: Now, I’ve got a quote here from Adam Hatcher. He’s the president of the Fair Work Commission. He said during the week that reading the tea leaves, the Reserve Bank seems to be telling us that the increase should be the top of the inflation target band. 3 per cent plus long run productivity growth of 1 per cent. That comes to about 4. Is that a fair assessment?
LEIGH: Well, he needs to test all the arguments that are before him and I’m sure he’ll do that very capably. It’s important to remember, Kieran, that the government’s submission is about those on the minimum wage, the 200,000 or so workers who are on that very bottom rung. Last time, what the Fair Work Commission did was to provide that inflation increase to the very lowest paid, but provide a smaller percentage increase to those further up the award spectrum.
GILBERT: So would that be another scenario that you would believe would not be inflationary, say, a 7 per cent increase on the minimum wage and not as generous further up the income scale?
LEIGH: We haven't put a number on it, but obviously, as a Labor Government, we want to make sure that the lowest paid workers aren't left behind.
GILBERT: But you also don't want to drive inflation. If it was 7 per cent across the board, economists would say that would be expansionary.
LEIGH: I think most economists agree with the view, Kieren, that we're not in a wage-price spiral right now. That we can afford to pay aged care workers properly, afford to pay early childhood workers properly. We can afford to ensure that those on the minimum wage don't go backwards in real terms and at the same time slay the inflation dragon. It is really important that we're able to do those things. And that was what our budget was focused on, a Budget which was really centred around ensuring the cost of living relief flowed to middle Australia. The biggest increase in Commonwealth rent assistance in 30 years to deal with the housing crisis, but at the same time returning significant savings to the budget, bottom line. 87 per cent of the revenue upgrade returned to the Budget bottom line
GILBERT: Just finally on The Voice to Parliament. The AFL and Rugby Australia both today coming out to support The Voice. Do you welcome that?
LEIGH: Absolutely. The AFL has been a great showcase of Indigenous success. I think it's no great surprise that they're supporting the Voice to Parliament, as other sporting codes and business groups have done. I'd expect there's going to be other significant groups in Australian society saying yes to the simple proposition that our constitution should recognise the First Australians. And then when Parliament's making laws affecting First Australians, we should consult.
GILBERT: Do you think that might help with the polling? Because at the moment, the trend is not great. The reduction in support for The Voice.
LEIGH: Referendums are always hard, Kieran. Four out of five have failed historically and we understand this is a challenge, but if we don't recognise Indigenous Australians in the country's founding document in 2023, when do we do it? Our founding document should acknowledge that there were First Australians who were here for 65 thousand years. Not just acknowledge that, but celebrate it, recognise what an extraordinary thing it is to share this land with the people whose continuing history goes back to.
GILBERT: Should the government be willing to compromise on some of the language to get more Liberals over like Julian Leeser?
LEIGH: The recommendation of the parliamentary committee is to keep the wording as it is -
GILBERT: There's a dissenting report.
LEIGH: But the majority of the parliamentary committee recommended keeping the wording as it is, having consulted with a whole range of experts. Now we've engaged across the political spectrum on this. There are many Liberals who support the wording as it is. I hope that others will come on board with what can be a historic, unifying moment for Australia.
GILBERT: Tony Abbott responded to the rugby move. He said that this is another sports body that succumbed to moral blackmail and coming out for The Voice. What's your reaction to that?
LEIGH: I suspect Tony Abbott's ‘moral blackmail’ would be ‘a good moral call’ if it had come out the other way. The fact is that his view is that of an old fashioned Liberal Party stuck in the past. I'm hoping more and more Liberals will recognise that it is in the national interest to support a Voice to Parliament. It's a generous offer that Indigenous people made to non-Indigenous Australia through the Uluru statement. We should take it with both hands, take up this opportunity to bind our country a little closer together.
GILBERT: Assistant Minister for the Treasury, Andrew Leigh. Thanks so much for your time. I appreciate it. Thanks.