Jennifer Westacott interview with Kieran Gilbert, Afternoon Agenda, Sky News

Event: Jennifer Westacott interview with Kieran Gilbert, Afternoon Agenda, Sky News
Speakers: Kieran Gilbert host, Afternoon Agenda; Jennifer Westacott chief executive, Business Council of Australia
Topics: Proposed changes to gig economy work; Same Job, Same Pay; inflation; wages; cost of living

E&OE

Kieran Gilbert host, Afternoon Agenda: Jennifer Westacott joins me now, she is the chief executive of the Business Council. Jennifer, thank you for your time as always. One thing in particular that you’ve picked up today, I want you to elaborate and explain why you’re worried about it. Is the government’s proposed changes to gig economy workers, people like Uber drivers and so on. What is your issue with what the government’s doing?

Jennifer Westacott chief executive, Business Council of Australia: So, what the government is proposing is effectively that you start treating these workers as if they are other workers in the economy. And effectively, they’re saying the Fair Work Commission will be allowed to set minimum standards, effectively set awards for gig workers. Now that works against how the gig economy is working. It’s not what workers want they want the flexibility. 93 per cent of people say they really love and value the flexibility. It potentially will deter people taking up these roles and that means that things either won’t get done, deliveries, services, or things are going to cost more. So, they’re pushing against this change in the way our economy is working that consumers want, that workers want. By overregulating having a, something like the commission, come in and say you’ve got to work a minimum set of hours, effectively setting awards for gig workers. That’s not what people want.

Kieran: One of the issues that you’re worried about as well is, who gets incorporated into that definition of employee-like, is it just gig workers? Would it be wider what the government is looking at?

Jennifer: Well, we don’t know. Because part of our frustration with the process that the government is undertaking, is that it’s not clear. The problem we’re trying to solve or who we’re actually talking about. We’re really asking the government to respectfully, be really clear with us about what are you trying to solve for? And who are you talking about? Is this about gig workers in Uber? Or is this about Air Tasker, tradies coming in and doing something in your home? The more restrictive, Kieran, we make these things, the more hard we make things for people to work, for people to get that extra three hours, five hours, however they want to work. I mean, you know this, I know this, when you talk to people working in the gig economy, they love the fact that they can just go and work for four hours, that those choices are up to them. They make the choice about how they work. They might work a number of apps, and that’s perfectly fine. Once you start saying, well, this is like an award, you got to work this many hours, suddenly you can’t work all the apps, that’s not how the economy is working. That’s not what consumers want. Consumers are going to increasingly want stuff delivered in an hour, let alone the next day. People are going to want stuff really fast and the workers themselves are going to want to assemble a whole lot of apps and make their day economically efficient for them. So again, we’re sort of like, what’s the problem we’re trying to fix here?

Kieran: So essentially, while the government is wanting to put in greater protections for gig workers, you’re saying one of the things, essentially, that needs to be protected, or at least the government needs to keep in mind, is the gig workers right to flexibility?

Jennifer: Absolutely, I’m not sure it’s really about protections. If it was, we’d be talking about insurance, we’d be talking about safety, we are absolutely up for that conversation. But once we start saying we want to put people on awards I’m not sure that is about protection. The cynic in me says the unions aren’t currently in these sectors and they want to get into those sectors, that would be a very poor reason for doing this kind of change. But again, we’re asking respectfully, let’s work out what problem we’re trying to fix. Let’s try and fix that problem. But let’s not shut down one important and emerging part of the economy. Let’s not shut down the innovation that’s happening in this economy that consumers want and that workers want.

Kieran: I know you had a meeting last week alongside the BHP chief and others. With the Same Job, Same Pay process how damaging will that be in your mind? With the government again saying it is about equity, ensuring all those doing the same job receive the same returns. But you are worried, I know BHP is certainly talking about costs of hundreds of millions of dollars.

Jennifer: It is actually $1.3 billion.

Kieran: So it’s not really in tune with what the RBA is suggesting, the RBA is calling for greater productivity. This doesn’t seem to fit in with that message?

Jennifer: Absolutely. These things sound good as a slogan, Same Job, Same Pay, but that’s not actually what’s being proposed. So, let’s really unpack this. What’s being suggested is that every single person, irrespective of whether they’ve been there for ten years, two weeks, two days, is going to get exactly the same conditions and pay as someone in the host employer. Assuming that you can work out whether or not people are actually doing the same job. So, how’s this actually going to work? How fair is it? So if I’m an engineer, but I’m working on an extremely complex thing in BHP and I’ve got 15 years of experience. Someone comes in for a couple of months and they get exactly what I get and they get the same things I’ve negotiated in my enterprise agreement; bonuses, childcare, extra things that people put into their enterprise agreement. And what BHP said last week should really concern every Australian. When a company says, this is going to cost us over a billion dollars, well people may say, well it’s a big company. That’s a billion dollars of activity they’re not going to do, the important projects they want to do in South Australia, vital to the South Australian economy. So, my question, again, is what is the problem we’re trying to solve? Labour hire is a very legitimate part of our economy. Many of the labour hire firms have their own enterprise agreements. Now, why would you go and do an enterprise agreement with your team if when they go on a host employers site, it doesn’t mean anything. So, again the thing that’s going to drive productivity is the enterprise agreement system. Our big fear, Kieran, is that this Same Job, Same Pay will deter people from doing enterprise agreements, because why would you do it? If someone comes in and they’re going to be there for two days, they get exactly the same bonuses, conditions. Why would I if I was a labour hire firm do an enterprise agreement if those conditions don’t apply with the host employer? And these labor hire arrangements, we’ve got these huge infrastructure projects. I was in South Australia last week, these massive projects that have to be done, it’s crucial that people be able to flex up their labour force. What I’m nervous about is that if we just keep adding to cost, adding to cost, adding to cost and not fixing productivity, companies have got really only a few choices. You charge your customers more, you employ less people or you do something overseas or you don’t do something at all.

Kieran: And when you look at the three different things the RBA Governor warned about. That being wage rises at a time of low productivity and high inflation, those things don’t all they just don’t all operate at the same time effectively? Hence rates have to keep going up.

Jennifer: Exactly. So, we should be doing everything to put downward pressure on inflation. I mean, of course, we want people to have good wages, we want them to have growing wages, but that’s got to be sustainable. That’s got to be because people are more productive, because their companies are more efficient. They’re using equipment, they’re training people better. It’s not because someone’s forcing wages to go up. That sounds fine in the short term, it won’t last. Particularly if you’re a small business. You’ve only got a few choices, you make your customers pay more and we can’t afford that at a time of cost of living crisis. You don’t do something which means you don’t expand, you don’t grow, you don’t have workers on for a longer period of time or you reduce your workforce. I mean, this is the problem we’ve got with a low productivity economy. And that’s why the RBA is absolutely right to warn that this is not the way to solve our inflation problem.

Kieran: Business Council chief, Jennifer Westcott. Great to chat as always. Thank you.