Doorstop - Parliament House
Subjects: JobKeeper payment
CHRISTIAN PORTER: [First line inaudible]… Some people who earn less than $1500 and become the subject of the payment will find that their wage in effect will increase, some of them quite dramatically to $1500. Some businesses who make the threshold of distress may still be able to pay many or all of their employees their usual wage, and will use the $1500 to subsidise that wage. Then for businesses who meet the distress thresholds, but are very distressed, finding their very viability threatened by those extraordinary conditions we find ourselves in, they may face a situation where they can only afford to pay some of their employees the $1500 rate, which is less than the usual wage. So the structural problem that the legislation needs to deal with, simply put, is that if a business on the edge of viability can only afford to pay a worker the $1500 dollar JobKeeper amount, unless we change the Fair Work Act, we cannot guarantee that a worker can lawfully work, the right amount of hours for the $1500 payment. Now, Labor suggest, I think in the words of Tony Burke, their view is that that should be done by the Commission, the Fair Work Commission. Now the difficulty with that is that that would require changes to 121 Modern Awards, an unknown but high percentage of 11,000 enterprise agreements. In addition there are 4 million Australians that are covered by individual arrangements of a variety of types, some tied to awards, some not tied to awards. That process, if it could be done would take weeks, if not months to complete. The only sure way that we can guarantee that a person works the right amount of hours for the $1500 payment, if that is all that the business can afford because its viability is threatened, is to change the Fair Work Act. It's as simple as that. So that is why we're doing what we are doing, legislation to create the payment but also facilitate the transmission of the money to the worker who needs it to save their job. It's very simple and to give you an idea about why this is the best simplest and only guaranteed way to ensure that jobs are saved, last year the Fair Work Commission took an average of 20 days each to approve 5000 Enterprise agreements, so 5000 Enterprise agreements were approved. It took 20 days per agreement, and that took a year. So the idea that you could amend, some unknown but high percentage of 11,000 enterprise agreements in the time that we have available in the challenging and emergent situation that six million Australian workers face is simply not plausible. If there were an easier way we would adopt it. This is the only guaranteed way to make the $1500 payments flow in a lawful way to save Australian jobs. I've described it as $130 billion worth of lifeboats going out. This is Parliament's Dunkirk moment. We get the lifeboats out, and we save jobs, and we do it in the simplest clearest guaranteed formula that Parliament can devise.
QUESTION: Mr Porter can you talk us through what safeguards there will be to take account those concerns and will there also be sunset clauses in the legislation?
CHRISTIAN PORTER: The changes will only last for six months. So, six months is how long the payments are there for, so six months is how long the changes to the Fair Work Act to facilitate the payments are there for. Of course for an employer to enter the scheme, they have to be able to show distress and that distress is a measure of 30 per cent of turnover if they have a turnover of less than $1 billion, 50 per cent above a billion. You would have noted that the treasurer announced a greater inclusivity of the program with respect to not for profits and charities for whom the test will be 15 per cent of the turnover. So that's the test. Inside the changes to the Fair Work Act there'll be a secondary requirement about the viability of the business, and the necessity to give a direction around hours worked to save the job of the employee in question. And that decision will be reviewable by the Fair Work Commission, so that there will be safeguards in the process of trying to make the hours match the $1500 payments if the business is in so much distress that that's all it can afford to do, and remain viable in the circumstances. This is about saving jobs. And what we don't want to have is a situation where we're waiting for enterprise agreements to change, and so a worker ends up with no job, no wage, no way to pay a mortgage, because we've not lawfully facilitated the transmission of a $1500 base wage to that worker. I mean that would be ridiculous. That is an argument about process and what appears to be happening now is that people all agree that there have to be changes to allow the $1500 payments to flow and save jobs, but some people would prefer it be done, a more complicated way through the Fair Work Commission. I simply find that extraordinary.
QUESTION: Mr Porter, yesterday you indicated that there might be some flexibility when it comes to the definition of casuals, for example casuals who might have a diarised list of employers over a 12 month period and might have done so, for example the gig economy is a classic case. If someone has been in employment regularly and continuously, albeit with more than one employer, would they be eligible for the $1500 payment?
CHRISTIAN PORTER: Not under the definition that we're using which is straight from the Fair Work Act, which talks about systemic and continuous employment for a 12-month period. But I think, Andrew, the point there - and we've tried to be as inclusive as possible and you'll see that through the changes in the definition for charities and not-for-profits - but even with expenditure of this extraordinary size there have to be some definitions and some lines drawn. We think this is a fair and reasonable line. But also keep in mind that with the changes to the JobSeeker payment, which is effectively a doubling of Newstart, and the ability of a casual worker to also earn money on top of that payment, that there is going to be an equivalence between a casual worker who would receive JobKeeper - the $1500 through their employer - and someone who would have to go on to the JobSeeker payment but also has the capacity to pick up work as well.
QUESTION: Not if there isn't work?
CHRISTIAN PORTER: Well, the thing is though that we don't want to put an economy into complete carbon freeze. There is work out there for casuals in some sectors - it's growing and we've seen that. Obviously, in many, many sectors, it's tapered off and gone down very significantly. But nevertheless, there will be an equivalency and no one gets left behind. But there always has to be a line drawn around how you define something. Now, the alternative definition - I think that was proposed by Sally McManus, and I looked at it but I can't accept it because it is just too broad and ill-defined in my observation and the observation of the Government.
QUESTION: Can you just confirm, will you make any changes to extend this to allow casuals who've been with their employer or other employers for less than 12 months to be eligible for the JobKeeper? Is that a yes or no? Any changes-
CHRISTIAN PORTER: I don't know whether I can confirm this for the seventh time over the course of two days, but the definition is systemic and regular employment with the same employer for a 12-month period, which is a Fair Work Act definition. That's the definition.
QUESTION: So there's no bending?
CHRISTIAN PORTER: That's the definition.
QUESTION: Can I also ask, you have four million workers who are on individual contracts. Now, is that to make it legal for an employer, who has signed a contract with an employee, to wind down their hours of work and say: you're working now four days a week or three days a week?
CHRISTIAN PORTER: In certain limited circumstances where that's all the business can do to remain viable and save the job of the employee. So there are four million Australians covered by individual arrangements of a great variety of sorts. Some of those are pegged to awards as a base rate that pay more; some of them are quite bespoke and suit the individuals in question. But where a situation exists, of which there will be many, that a business can only pay a group of employees the $1500 - even if they were usually earning more than that, because there is no demand for the business and the business would otherwise fold and the employee gets nothing other than a redundancy or a stand down; has no job, no wage, no ability to pay a mortgage - there has to be a way to make the $1500 base wage through the subsidy lawfully paid. So that way has to apply to individual agreements, it has to apply to awards and it has to apply to the 11,000 enterprise agreements.The only way you can make it a guaranteed, absolute certainty, a lawful process across the board, is to change the Fair Work Act. Now, obviously, you should do that cautiously, advisedly, with safeguards. But it is the only way that you can be absolutely guaranteed that the system will work.
QUESTION: How do you expect Labor to agree to amendments to the Fair work Act when they haven't seen them yet? All they've been sent so far is a blank page. The other day the Prime Minister said there are no red teams or blue teams. You, yourself, said yesterday that six million jobs depend on this. So, why aren't they being sent these amendments?
CHRISTIAN PORTER: So, I explained the process. It was always the case that we undertook to get a draft yesterday on the Treasury side of this which is complicated, but not quite as complicated as the Fair Work side. That draft went. In the meantime we've transmitted drafting to the ACTU - I am working through that this morning. Then, when there is a final draft of the Fair Work Act side of it, it gets married up today to the Treasury side of it. I understand we discuss it with Labor tonight as a whole. Now, that is as good as we can do and be consultative through the union movement, who have been very helpful with this process. But that is as good as we can do in the timing that we have. So, some people would like more time - I'm one of them - but that's as good as we can do in the circumstances.
QUESTION: On social distancing, a video has emerged - you would have obviously seen it - of AFP recruits partying hard into the night, caught on video at the same time that people sitting in a car have been told to move on by people that they're hoping to become - the AFP recruits. What should happen to those recruits? And are you going to be demanding that the powers that be sort it out?
CHRISTIAN PORTER: Look, I haven't seen the video - there's some other matters I am dealing with - but it doesn't sound very good and it sounds like that should definitely be a matter of disciplinary proceedings for the commissioner with his recruits which I am sure he will engage in in a robust fashion. That does not sound acceptable to me, but I haven't seen the video.
Just back on the 1500, just to clarify. Say a worker has been getting 3000 a fortnight, the business is in trouble and the employer can't even afford to give them the 1500 - is it still possible for that worker to work a full working week for the reduced wage, if that's what it's take to keep the business afloat? [Indistinct]…
CHRISTIAN PORTER: Well, we don't want people working more hours for their hourly rate than they're actually getting paid for and if the business has to reduce them down to 1500 because of the viability of the business depends on it, part of this is to ensure that they don't work more than their hourly rate to get up to the 1500. Now, whether employers or employees reach other arrangements and volunteer or things of that nature - but we have to make it lawful for a person who was earning 2200 to only earn 1500 without changing their hourly rate of pay. I mean, it is a mathematical formula that we have to make lawful.
QUESTION: So if they say: look boss, I'll do the actual day for free, because that's what- that can be done on a discretionary basis? [Indistinct]…
CHRISTIAN PORTER: Well, even that would be difficult, right? Because there are laws about people working in an unpaid way under our award system - that's the problem. And that's the problem that we're trying to fix in the simplest way possible.
QUESTION: Just on the 12-month threshold again, is it the case it is too expensive to accommodate someone on a three month, six month, or nine month casual employment?
CHRISTIAN PORTER: Well, what we are trying to do here is ensure that people who have long-term connections to their employer maintain that connection with the subsidy. So we had to have a definition around what is a long-term connection to your employer. It's not a question of the cost because people who don't fall into the JobKeeper system, will fall into the JobSeeker system. And there is a relative equivalence - it's not exactly the same, but it’s close to the similar amount. So what you'll find is the expenditure is going to be very similar whether or not someone is falling into one scheme or the other.
QUESTION: Have you been given an assurance from Labor it will support the bill in its current form?
CHRISTIAN PORTER: No. And look, admittedly we've not got to the drafting point yet, but Labor have been very firm that they say the changes that need to be made to make the $1500 payments lawful should happen through some staged process in the Fair Work Commission which the government says is untenable. So if you don't - if you support only the Fair Work Commission making the $1500 payments lawful, you can't be supporting the bill because the bill says it has to happen through the Fair Work Act.
QUESTION: Mr Porter just to be clear, an employer would be able to say that they will stand some employees down for the 1500 threshold but keep others on their existing rate?
CHRISTIAN PORTER: But that language, again, confuses the issue because a stand down under the Fair Work Act is a completely different thing. There will be some circumstances where a business is faced with the choice of just letting someone go or having them work less hours and being paid $1500 so that the business survives. You have to change the law to facilitate that arrangement.
QUESTION: So it may affect some employees in a business, but not all?
CHRISTIAN PORTER: Well, it depends on the nature, [coughs] excuse me, of the distress or viability of the business. But the owners of the business, the operator of the business, the small businessperson is going to have to make determinations based on what makes the business survive - what makes sure that the people employed there are connected to that employer.
QUESTION: [Indistinct] announcement that don't go far enough for them because some of their funding was tied. Would you look at making further adjustments to that eligibility?
CHRISTIAN PORTER: Those adjustments the Treasurer announced, I think, are very reasonable. They ensure that a charity or a NGO would be able to show a 15 per cent decrease in the turnover and get into the system. I think that is reasonable, I don't think you'll be seeing any further changes to that.
QUESTION: Just because we get lots of questions it, but the way I understand it the reason you can't cover people multiple employees, people who have multiple employers, is because the way this whole system works the connective tissue is between one company and one employee?
CHRISTIAN PORTER: The connective tissue is people who are connected to an employer and you have to have some definition of that connection. This is about keeping people during this period of hibernation connected to their employer. Now, there has to be some definition around that otherwise we have provided the most generous increase to the Australian welfare system in its history - temporary though it is - the most generous increase to Australian welfare system in its history so that no-one is left behind in this and people are still able to get through what we think is a six-month period of economic hibernation and leave us in the best possible circumstances to get out of it in a strong, robust, growth-based way at the end of it. So I'll just take one more.
QUESTION: The latest News Poll shows the PM, it’s put the PM in a pretty good position. Do you think this shows that Australians are supporting the tough measures that we're seeing from the government in response to the virus?
CHRISTIAN PORTER: Well look, I think Australians are doing it tough. I mean people in my electorate, people right across Australia - kids aren't being able to see their grandparents - this is about as tough as our generation and our parent's generation of Australians, and the baby boomers, and Generation X, and Generation Y and the Millennials have ever seen it. We're all in it together and it's very tough. I think Newspoll at least says this: that people understand how huge are the challenges that we're facing and they're willing to support a government who is not letting the perfect be the enemy of the good and is coming up with solutions to problems as the problems arise. That's not always easy, not every solution will be perfect but you have to solve the problems as they roll off the COVID-19 problem production line - and man are they rolling off fast.
Okay. Thanks everyone.