Sunday Sunrise Interview with Bill Shorten

The following is a transcript from Channel Seven's Sunday Sunrise program interview with AWU National Secretary Bill Shorten.

Michael Pascoe: Last week's rate hike was explicitly aimed at heading off the wages surge that should result from our skills and infrastructure crisis. What are the chances of that happening? The person most likely to know would be Bill Shorten, National Secretary of the Australian Workers' Union and also a member of the ALP's national executive. The AWU has more than 130,000 members across a wide variety of industries, including those at the core of the Reserve Bank's concerns. Being a supporter of free markets myself, I put to Mr Shorten that where there's a shortage of labour and skills, sharp wage rises are entirely reasonable.

Bill Shorten: I think that what a number of industries are seeing are the results of short-term thinking by the private sector and by the current Federal Government. Too much of business is dictated by half-yearly reports and annual shareholder meetings, not about long-term planning. The same goes for the government. Their politics and decision making is determined by the 24-hour media cycle, elections and opinion polls and no long-term plans for Australia. So I think that the issue of wages is only part of a bigger problem in Australia, that is that the Howard Government squandered the long boom of the last 10 years and we're not in a position to be able to engage in the necessary nation building that we should be doing.

Michael Pascoe: What industries are you finding would have a shortage of labour and room for market forces to force up wages?

Bill Shorten: There's no question that the civil construction sector, the mechanical construction sector, where people have got to build the big energy projects and the big infrastructure coming up in the next five years, in those areas there is a shortage of skilled tradespeople and indeed skilled labourers. In addition, you'd have to have a look at the oil sector, the oil and hydrocarbon sector. There are a lot of - there's an ageing work force there. The operators who maintain Australia's refineries and oil and gas fields are getting older, and there hasn't been a concentrated plan to hire new blood into that industry in a long time. We also think in terms of wages that remote areas of Australia, the fact of the matter is that you can get better wages and better conditions working in the big cities of eastern Australia than you can in other parts of Australia. So I think there'll be labour challenges and shortages in remote and regional Australia.

Michael Pascoe: So what sort of wage rises do you think would be reasonable over the next year or two?

Bill Shorten: I think a wage rise which has a component for productivity and a component for increases in the cost of living is reasonable. Anyone who goes and fills up their own car full of petrol will realise that $1 a litre is the norm. I do think that that's a pressure on a lot of people. The increase on the average mortgage of $30 a month will contribute. I would suspect somewhere between 4 per cent and 5 per cent per annum is a legitimate pay rise. Of course there will always be individual circumstances which may dictate a greater or lesser result.

Michael Pascoe: The Energex linesmen weren't your members, they're ETU, but that pay rise, 31 per cent over three years, does that set something of a benchmark in areas where skills are tight?

Bill Shorten: Listen, these Energex linesmen deserve every cent they get. There's not a lot of them. Do I think that means that all the workers in Australia will be getting 31 per cent over the next three years? Not at all. But I have to say that when workers see the excessive salaries which boards have rewarded themselves with, it's a bit rich to hear lectures going to the blokes in overalls from the people in suits when in fact a lot of boardrooms and executive wages have increased their remuneration far in excess of their performance.

Michael Pascoe: Productivity growth has fallen off, the figures show that. The government and a lot of employers would argue that we need IR change to get productivity up so we can afford wage rises.

Bill Shorten: IR changes is just code for a low-cost industry. I think that the only way which we're genuinely going to engender greater productivity in Australia is by the notion of partnership, not conflict. Most private sector companies don't train workers anymore. These days only one in 10 every private employers trains their workers. So I think we see the age-old truth that the private sector will capitalise the profits and socialise the losses for demanding a greater role from government, still ring true. But there needs to be concerted work done by the government, and by the private sector, to create incentives for private employers to do more training. The private sector has got to start carrying its weight in this debate about training people up. Everyone knows in some of the great regional manufacturing centres of Australia, be it the Illawarra, the Hunter, Gladstone, Karratha, the traineeships and apprenticeships are a thing of the past and that we're not training up the blue collar talent to build a great Australia.

Michael Pascoe: So higher wages are the price that the private sector is now paying for not training.

Bill Shorten: A short-term perspective by the private sector now means that because there's not enough trained staff, then the laws of supply and demand have kicked in, as they should. In a market economy if the supply of labour isn't available at the price that has been put forward by the people seeking it, then the price of the labour will have to go up. Then the supply will emerge.

Michael Pascoe: Will the government's IR changes help solve Australia's infrastructure and skills problems?

Bill Shorten: What will solve Australia's infrastructure and skills problems is the concept of nation building. There's nothing wrong with Australia seeking to be the wealthiest nation in the world, there's nothing wrong with us seeking to promote prosperity, and there's nothing wrong with ensuring a strong and robust union movement which will deliver an equitable share of the national income amongst all people. The way we improve IR, the way we improve education, the way we improve infrastructure, will be buying - allowing a tax system which encourages companies to invest, by taking a long-term approach to infrastructure and the funding of infrastructure, which is a combination of private and public funding. I think if there was a consensus about a long-term vision of nation building, the IR changes are a mere speck on the telescope.

Transcript from the Sunday Sunrise website.