6PR Mornings with Gareth Parker

E&OE

Subjects: Wage underpayments, Jetstar, luxury car tax, test cricket in WA

GARETH PARKER: Well, another day, another corporate underpayment scandal and this time, it is Western Australia's most respected company. Not the first time they have come unstuck on this issue. Yesterday, we heard about Coles, a Wesfarmers subsidiary in part. Today, it is Target. $9 million underpaid. That's after Coles yesterday, $20 million underpaid. Its managers involved. Same old story. What do we do about it? If you're affected, I'd like to hear from you too. 922-11-882. Attorney-General, Industrial Relations Minister, is Christian Porter. Christian, good morning.

CHRISTIAN PORTER: Yeah. Morning, Gareth. Well, that now becomes an even longer list. I mean, you know, you're talking Qantas, Michael Hill, Commonwealth Bank, Super Retail Group, Sunglass Hut, Maurice Blackburn, Calombaris' MAdE Establishment Group, ABC, Woolworths, Coles. I mean, it's a very long list of sophisticated, moneyed enterprises and many of them incredibly profitable. And obviously, we want Australian businesses to be profitable but it's endemic. And I mean, Coles, obviously, yesterday, they made their announcement about their underpayment. Ironically, the same day that we, as the government, put out a discussion paper, sort of treating and seeking submissions on a third wave of reform to try and ensure that the culture and laws are right to prevent it from happening.

GARETH PARKER: Okay. But clearly, this is- I mean, you've used the word endemic. I think that's accurate. Is it a business model? I mean, are they actually taking this seriously? How can every one of those companies that you've named all get it wrong?

CHRISTIAN PORTER: Well, I don't think, in large part, it's intentional but it's still utterly hopeless. I mean, it's just totally falling beneath the standards that everyone would expect. So I wouldn't call it a business model. But it is an endemic failure of management and business systems which they have to fix and fix very quickly. And look-

GARETH PARKER: [Interrupts] But- sorry, but how can every one of those enterprises fail on this score?

CHRISTIAN PORTER: Well, I mean, you'd have to ask each of them as to how this arose, but it seems that the common feature to it all is that you've got profitable, moneyed, successful, sophisticated Australian businesses who spend an enormous amount of energy and resources on a whole range of things, but have been spending completely insufficient energy resources and investment of profits back into adequate systems, platforms, resourcing that ensures that people are paid correctly. And some of these underpayments, of course, are going back 10 years and in cases longer than that. So when we came to government, we increased the civil penalties for underpayments, non-intentional underpayment by a factor of 10. We increased the funding to the Fair Work Ombudsman by $60 million and now, they, for instance, have 300 per cent more litigation, 500 per cent increase in their compliance notice. They recouped 64 per cent more money last year than they did in the final year of the previous government. Then, of course, we committed ourselves to creating an offence of wage theft and that legislation will come out very shortly. Yesterday, we put out a paper about other things that we think should be considered, banning orders, publicity orders, preventing directors from being able to be directors of company if they've presided over these types of failures. These are all penalties and responses that exist in other sectors, corporate settings and consumer law settings. I think it's clearly time that they be considered in terms of responses to this problem.

GARETH PARKER: Okay.

CHRISTIAN PORTER: But ultimately, Australian business has to get its house in order, and the Government can and will present the firmest possible suite of laws to incentivise correct behaviour. But ultimately, Australian business has to get its house in order.

GARETH PARKER: This is just hugely damaging, not just to the individual companies, but to the reputation of private enterprise in this country. They look like a bunch of scammers.

CHRISTIAN PORTER: Well, I think that it does do clearly large damage to individual businesses. And Calombaris' MAdE Establishment Group, as we now know, financially failed. It is bad for the Australian economy. It's bad for these businesses. But ultimately, people who work hard, whether you're in Kmart or the Commonwealth Bank, you just expect that you'll be paid what you're owed. And the ultimate victims here are people who are not paid what they're owed, sometimes over many years, and then have to wait for the Fair Work Ombudsman to be able to detect, investigate and ensure repayments, or for…

GARETH PARKER: Okay.

CHRISTIAN PORTER: …self-auditing to ensure repayment. But ultimately, there is a responsibility on the businesses to pay the people, who work for them and make them profitable, the money that they're owed.

GARETH PARKER: There's other issues I want to get on to here. With your industrial relations hat on, the dispute between management at Jetstar and its staff, seems as though it could really disrupt Australian tourism at a time when Australian tourism is on its knees. Do you want the parties to come to a deal quickly here?

CHRISTIAN PORTER: Well, what I don't want to see is industrial action or a threat of industrial action used as leverage at the point that both the parties are at. It seems to me that Qantas have put a deal that needs to be properly considered. They obviously consider that that is the appropriate and reasonable deal. But, to threaten or launch industrial action at this particular point in time in the process between the parties, and given what tourism is suffering because of the Coronavirus, I think would be an act totally contrary to the interest of the members of the TWU. I mean, it would further and deliberately seek to weaken the sector as a leveraging tactic in circumstances where that sector has already been buffeted by forces outside the sector and the Government's control, and I think that that would be a completely retrograde action.

GARETH PARKER: The departure of Holden for good puts the final nail of that brand in this country, but it is the case that, for some time, there have been no vehicles manufactured here. Isn't the rationale for the luxury car tax, which does rake in more than $600 million a year to the budget, isn't the rationale for that tax totally gone now? Shouldn't that disappear from the books?

CHRISTIAN PORTER: Well, there's no plans with respect to that tax. I mean, that's something that the Treasurer will consider once the dust settles around the exit of Holden in a more fulsome way, but there's no plans with respect to that tax. It is a very sad thing to see Holden gone. And of course, this process started with Mitsubishi and Ford under the previous Labor government. I mean, billions and billions of dollars, of taxpayer money, went to subsidise and try and lengthen the existence of car manufacturing in Australia, and ultimately, that taxpayer subsidy wasn't successful. It wasn't successful for Mitsubishi or Ford under Labor and that has now ended finally with Holden, and it was a very painful process for the taxpayer…

GARETH PARKER: [Talks over] Yeah. But the point is now that…

CHRISTIAN PORTER: …But I understand your point [indistinct].

GARETH PARKER: [Talks over] But the point is the luxury car tax was supposed to prop up Australian manufacturing. We don't do Australian manufacturing anymore, so why don't we get rid of the tax and make cars more affordable for Australians?

CHRISTIAN PORTER: These are matters for the Treasurer to look at. There's no plans with respect to the luxury car tax but I'm sure that that, like all taxes, is a matter that gets under review once…

GARETH PARKER: Okay.

CHRISTIAN PORTER: …the full repercussions of Holden's final departure from Australia are able to be considered and known and measured.

GARETH PARKER: Last question. This is without notice, but you are a cricket fan. It does appear that Perth is set to miss out on an India test next year despite our investment in the new stadium. We'll be getting Afghanistan at the WACA instead. Your reaction?

CHRISTIAN PORTER: Yeah. I would find that immensely disappointing. So, and I'll be putting my views about that to Cricket Australia. But, having been part of the Barnett Government as a treasurer that made the decision to build that stadium and invest money in that stadium, one of the reasons that we did that is because we were informed, in pretty clear terms, by Cricket Australia, through the WACA, that if we didn't have appropriate facilities, we wouldn't get tests. Now we've got the best facility in Australia, if not the world, for playing cricket at, so I would find it immensely disappointing if you get a test at The Gabba, which facility is rundown, which hasn't been the subject to the sort of investment that we've had in WA. I would find that a bitter disappointment.

GARETH PARKER: Christian, thank you for your time this morning.

CHRISTIAN PORTER: Okay. Cheers, Gareth.

GARETH PARKER: Christian Porter, the Attorney-General, not happy with Cricket Australia. If, in fact, they do as we expect them to do, which is to skip over Perth for the test summer against India next year, instead getting the third-rate Afghanistan test at the fourth-rate WACA Ground.