24 February 2017
Transcript - #2017004, 2017

Interview with Richard Perno, 2DU, Dubbo

Joint interview with
Mark Coulton MP
Federal Member for Parkes

SUBJECTS: Michael McCormack's small business roadshow, penalty rates, small business tax cuts, confidence in regional small business

PRESENTER:

[Question on penalty rates]… we're going to see some action on this?

McCORMACK:

Well as I travel around the countryside – and certainly last year I started a nationwide tour of small businesses with the Australian Chamber of Commerce and Industry, in fact – and I was told in most states apart from South Australia, where energy is their biggest issue, that the number one issue was Sunday penalty rates.

PRESENTER:

Why?

McCORMACK:

Because they felt in many sectors – and this is only affecting four out of 122 awards, this decision yesterday – but they felt in many sectors it was prohibiting businesses actually opening on Sunday. And I visited, just the day before yesterday, the little town – population 800 – Lockhart, in the south of my electorate. It's a place where most of the businesses in the main street don't open, simply because the coffee shop doesn't open. They feel that people who are travelling through Lockhart – if the coffee shop were open – people would stop. They would have a look around. They would spend a bit of money. But because the coffee shop isn't open, isn't trading, because of – probably – penalty rates and other things as well, that people just keep travelling. So the small businesses in that town actually don't open.

PRESENTER:

Yeah. Would that be the same around your patch, Mark Coulton, around the Parkes electorate? Little villages don't open their coffee shop and hence they lose trade.

COULTON:

Yeah. That's exactly right. I think the larger places do get into the seven day cycle. You know, personally – and I know you can't stop time – but it's a bit of a shame we have got into the seven day trading cycle. I know in my little home town Sunday is the biggest day of the week for the supermarket. People now want to do their shopping on that day, but you are right, there are a lot of those smaller businesses that probably don't open or they don't open all day, only for a couple of hours, for that reason.

PRESENTER:

Yeah, because it used to be we would have trading up until midday on Saturday, shops would shut and that would be it. All gone. Wouldn't it Michael. We wouldn't have trade on Sunday – no shops would be open and then little by little shops wanted to open and thought if you're going to get people out of church, or their family commitments of a Sunday we are going to have to lure them off the sporting field, out of their houses and out of church by feeding them money. Is it a dinosaur that is now gone? Do you believe it's old fashioned now?

McCORMACK:

Well, the Fair Work Commission have indicated they feel that Sunday is a bit more like Saturday, so the penalty rates that will be paid in the future – according to the ruling of the Fair Work Commission – will be more on a Saturday rate. It is one of those things. The Fair Work Commission is, of course, an independent umpire at arm's-length of Government. So this is a decision made by a body set up by Labor when it was in Government last time…

PRESENTER:

Correct.

McCORMACK:

The Fair Work Commissioner is a person appointed by Labor when it was in Government last time, and Bill Shorten can have his little tantrum, he can jump up and down but the reality is he was asked last year three times on – on three separate occasions – by Neil Mitchell on 3AW, in a studio not dissimilar to this, 'will you support the Fair Work Commission's decision, if and when it reviews and changes penalty rates', and he said he was going to support it. So, you know, let's remember this is the bloke at the end of the day who didn't really protect workers when they were under his watch when he was the union boss. You know, he sold them out. So he doesn't really have good form in that regard, at any rate.

PRESENTER:

I gave you a free kick and he took it, didn't he, Mark?

COULTON:

Well the other thing is, Richard, if you happen to see a quote from a nurse or an emergency worker or someone like that…

PRESENTER:

Well nurses aren't affected.

COULTON:

Unaffected, that's right. So we have seen – there was a bit of egg on face yesterday when someone got wheeled out as being someone who was going to lose their, say, $6,000 a year and it turned out that they weren't affected at all.

PRESENTER:

That's right.

COULTON:

So you just need to have a good look at some of the case studies.

PRESENTER:

It's selective evidence, you're right. You know, used to support a case.

If you would like to talk to the Federal Minister for Small Business, if it's affecting you, do it now on 2DU Breakfast or the Federal Member for Parkes, Mark Coulton, you can do it now.

[AD BREAK]

PRESENTER:

We're on air this morning with Federal Small Business Minister Michael McCormack. Michael, specifically can we focus on how you think the changes from the decision of the Fair Work Commission yesterday, the decision, are going to affect our businesses. Now, you've got a patch, Mark's got a patch. It's all regional. How do you think it's going to affect the café and the little shop down the road on Sunday? And how do you think it's going to affect those who are really reliant on these penalty rates from Sunday?

McCORMACK:

Well – for a start I will say that when I used to work as a journalist, many years ago – we received a 25 per cent penalty rate for working on a Sunday; working on a weekend. And that was appreciated. Of course, now penalty rates have got to double-time, double-time-and-a-half and it can be an impost on employers. It can be an impost on business owners. So hopefully with this decision by the Fair Work Commission yesterday, at arm's-length of Government, independent of Government, they will look at this and think, 'maybe it's time we traded on a Sunday, maybe it's time we hired extra staff.'

The NSW Business Chamber Chief, Stephen Cartwright, has said he feels the decision yesterday by the Fair Work Commission will encourage small business owners to trade on a Sunday if they weren't previously. He feels they will be able to employ more people, more young people and more older Australians, so for some this might well be the catalyst for change, the catalyst for getting their very first job. So we will see how it plays out but hopefully it will incentivise small business owners to trade on a Sunday and employ more people.

PRESENTER:

Michael, you say it may give liberation to these small shops which didn't want to pay penalty rates and shut their doors an opportunity to open the door, but are you actually convinced they will employ more or just use the cut in penalty rates for their own use and keep the savings? Gerry Harvey has said it's already too expensive to employ somebody on a Sunday, he doubts he will hire any more despite the cutback by the FWC.

McCORMACK:

Well they might put on that casual worker who's not affected by the change. At the end of the day most small businesses when they take advantage of a lowering of the company tax rate – which we are trying to introduce – if they have cash-flow to take advantage of the instant asset wrote-off – which we are trying to extend – they reinvest that money into their business at any rate. These are people who back themselves, who have a go, who have that entrepreneurial spirit – particularly in rural and regional areas. The sorts of electorates like Mark Coulton and I represent, they're the sorts of people who do take risks. They do give that young person their first start.

PRESENTER:

What's the circle of life in regards to this? We have the slowest wages growth we have had in so many, many years, Michael McCormack, if we don't have good wages, we don't spend. Is this going to affect that, cutting back on my penalty rates for a Sunday and that means I've got less to spend. What's going to .. what will be the flow-on impact?

McCORMACK:

Well, it will be a wait and see. Obviously the decision will take effect from 1 July for the public holiday rates, but it's a wait and see as to how it plays out. But I do think it will encourage more people to get a job, particularly in small business and particularly those casuals who may not otherwise be working. Stephen Cartwright, the NSW Business Chamber chief – as I say – he believes it will lead to more employment. That's a good thing, and you know, if there's more employment then there's more money going around in the economy.

PRESENTER:

That's the question though, Michael, whether there will be more employed? Now you say the FWC is at arm's-length of Government, how much power does it have to make sure all these recommendations get through? Are they through and will the Government tick off on it? Where does that stand?

McCORMACK:

The Government will tick off on it because it is the independent umpire. It is the decision-maker as far as these things are concerned.

PRESENTER:

So that's it?

McCORMACK:

Well, Bill Shorten when he was the Employment Minister…

PRESENTER:

What about the current Government though?

McCORMACK:

Well the current Government is in favour of the independent umpire, the Fair Work Commission, as far as this is concerned. It is the independent umpire and they do set the rates. That's what they're there for. That's their job. It could be like a Government turning around and overturning a Court decision, you know, we are not in the business of doing that. It's a decision made by the Fair Work Commission…

PRESENTER:

Untouchable?

McCORMACK:

Well, it is the decision made by the independent umpire.

PRESENTER:

What do you as a Government get out of this?

McCORMACK:

Well, hopefully we get more employment. Hopefully we get more younger people engaged in the workforce. Hopefully younger people might have this and view this and see this as an opportunity to get that first job they were seeking. And hopefully around rural and regional areas, this means that café will open. That little place that wasn't previously will open and that will then inspire other businesses to open and trade, also, of a Sunday.

PRESENTER:

How would you expect it to affect a trucking company? A mum and dad industry at home that does it all. How would you expect it to help a citrus company or, you know, someone who grows off the land?

McCORMACK:

Well, there's flow-on effects with any decision made and that's why we are trying to introduce our small business tax cut plan – otherwise called the Ten Year Enterprise Tax Plan – that's why we are trying to introduce it and get it through the Parliament to inspire confidence, particularly in regional and rural Australia – the sorts of electorates Mark and I represent. We know out here that anything which starts as a good starts here in rural Australia, it just gets value-added sometimes in metropolitan areas. That's why we really want to inspire confidence in the bush and I think these sorts of things – our plans for tax cuts, the decision yesterday – it does inspire small business to get out and have a bit more of a go. And I appreciate that some people will be affected. I do. I understand that fully. But hopefully the advantages will outweigh any of those people who are going to have this as a result of yesterday's decision from the Fair Work Commission. And hopefully the flow-on effects will be good for the entire economy, particularly in rural and regional areas.

PRESENTER:

On 2DU breakfast with Michael McCormack, the Federal Minister for Small Business. You're saying tax cuts – ok, that's on the agenda for the Feds at the minute anyway – now we have workers earning less, paying less tax. Less tax means less money for the Government to spend, doesn't it?

McCORMACK:

If the economy grows it doesn't. We know as a Government…

PRESENTER:

Is the economy growing?

McCORMACK:

Well we have had economic growth in Australia for 25 years. It's the only country in the world – apart from one I think – that has had that economic growth, year on year, Budget on Budget, as far as economic activity is concerned. We have been growing, we have been steadily increasing.

PRESENTER:

You're not worried about tax cuts?

McCORMACK:

No. What I am worried about is that our plan for tax cuts for small business won't get through Parliament. Because it gives small business the tax break they need and deserve and want and expect. And by doing that, by getting that tax cut, they reinvest the money in their own businesses to make sure their own businesses grow and that's what small businesses do.

PRESENTER:

Alright, Michael McCormack, a couple of quickies. There are four out of 120 recommendations these … occupations which are being affected by the FWC's decision yesterday?

McCORMACK:

Yeah – hospitality, fast food, retail and pharmacy.

PRESENTER:

So we have four out of 120? They come into effect on the 1st of July – what power has the FWC got to now, once these four go through, to then land on other occupations? Even nurses?

McCORMACK:

Well, this was part of a review – they only looked at six out of 122 – they have made a determination on four.

PRESENTER:

So they can't do any more?

McCORMACK:

These things are part of a review process and that review process was introduced by Labor, so it's part of it. But here's no penalty rate cuts for nurses or emergency workers, so anything that the unions and Labor come out with today as far as scaremongering – it's not going to happen anywhere in the near-distant future. So it's just scaremongering and – look – in Government you never say never about anything, but this was a review commissioned, set up, call it what you like by Labor. It is only affecting those four particular sectors and they were the ones reviewed – six out of 122 awards – the result of something set up by Labor.

PRESENTER:

But there is no reason why they can't through the course of the next year or so, land on other occupations?

McCORMACK:

There won't be another review for quite some time. That's part of the process of the set-up, the establishment, of the Fair Work Commission. And look the Fair Work Commission was set up a long, long time ago under Labor and this is the first review that essentially it's taken or made a decision such as this, so as far as nurses, they're safe.

PRESENTER:

Righto. Mark Coulton – your summary of what we have heard so far from Michael McCormack and also, what are your feelings about the FWC's decisions yesterday?

COULTON:

I think there's an opportunity – I think I've got something like 16,000 small businesses in the Parkes electorate …

McCORMACK:

More than that, even Mark. It's a great area.

COULTON:

Yeah, Michael. And so at the moment there's low interest rates, we talked about tax cuts. You know the instant asset write-off for equipment under $20,000 has been a boom for retailers right throughout my patch. Accelerated depreciation for grain storages, water, fencing, has all put money into the businesses and towns right across my patch. So through tax cuts you can generate economic activity. So there's people out there now, pouring slabs to put up silos and digging trenches for water. And that's the idea of it – to generate activity and create jobs.

PRESENTER:

And you think the decision from yesterday will do that?

COULTON:

Yeah, it's certainly going to help. Because it's for certain categories I don't think it's going to affect a large number of people in my patch and I think we should remember it's not doing away with penalty rates. There are still penalty rates. Saturday and Sunday will be the same – it's not doing away with penalty rates.

McCORMACK:

That's correct.

PRESENTER:

Michael McCormack, the Federal Minister for Small Business and the Federal Member for Parkes, Mark Coulton, thank you.

COULTON:

Thanks Richard.

McCORMACK:

Thank you.