BARRIE CASSIDY, PRESENTER: Sally McManus, welcome.

SALLY McMANUS, ACTU SECRETARY: G'day, Barrie. Great to be here.

CASSIDY: Paul Keating introduced enterprise bargaining in 1993. It's fair to say that a period of prosperity flowed from that, so what went wrong?

McMANUS: Things have changed since Paul Keating. Since the global financial crisis, we've seen profits and we’ve seen power concentrate in the hands of a few and because of that the system is no longer balanced. We've had as you say a long time to test out one system and that is enterprise bargaining and it is failing. There are less people on them, they are dropping back to awards and they're not delivering the pay increases that they need.

CASSIDY: Is it because fewer people signing up to trade unions?

McMANUS: Not so much that because you don't need to be a member of a trade union to be covered by an enterprise agreement. The main reason why enterprise bargaining is failing is because working people don't have the power they need to negotiate fair pay rises. So, if you work in a childcare centre, for example, and there is five of you, it is very hard to negotiate a pay rise with your management committee who might be volunteers. Really, why shouldn't childcare workers be able to band together across the sector and say, "We want to set fair wages for childcare workers no matter where you work.

CASSIDY: But if you want to go across the sector is it partly because you can use strike action more effectively?

McMANUS: Often pay rises come about, not so much because workers go on strike, but because they have the option to do so, and at the moment we do have an option to have what’s called low-paid bargaining, but you've got to give up even the option or the right to ever take any industrial action of any type, so because of that employers can think, "Well, we can just keep saying "no" and if we keep saying no the workers don’t have any other options so we know we will get the outcome we want." That system hasn't worked. We haven't seen that operate successfully anyway, so we need to re-look at that and say we need to re-calculate our system to make sure it's fair for working people.

CASSIDY: But then again if you make it easier to strike as part of pay negotiation, it will happen, and the Government is already saying this is a throwback to the 1970s where strikes are far more common than they are now and who needs that?

McMANUS: Well think about how crazy that is. Back in the 1970s, more than 50% of people were in unions, number one, and now it is 15%, so that's a big change. Number two, productivity is going up, and wages aren't going up. Profits are going up and wages not going up. Profits went up 21% last year and wages only 2.1 per cent, something is seriously wrong. So to say if there was a system like this all of a sudden there will be this big outbreak of strikes like there was in the 1970s is just a crazy fantasy.

CASSIDY: What would your approach be. At what point would you introduce strikes into the negotiations?

McMANUS: Well, for us we want to see a balance between the right for working people to take industrial action as a last resort and giving again the power to make decisions to the Fair Work Commission. At the moment they do not have the power to make decisions when there's a big dispute or a disagreement, so essentially that means it is actually the law of the jungle and the tigers are winning, and those tigers are the big multinationals and we need to make sure we have a fair, independent umpire that will balance or make sure we don't see long, big strikes. We just want to see an outbreak of pay rises, not an outbreak of strike action.

CASSIDY: What do you expect, what is the minimum you expect from the Labor Government under this arrangement? Do you want unqualified support for this new system?

McMANUS: Well look, we are having discussions with the Labor Party at the moment, but we're also having discussions with every single political party. We've been really open, we've outlined exactly what we think needs to happen for a new, fair system, so people also get better job security, we are sitting down with them, but we are also sitting down with the Coalition and we will sit down with all of the minor parties as well because in the end we believe this is what is necessary. We hope, of course, that the Labor will adopt a lot of the proposals that we've got, but in the end that's a matter for them.

CASSIDY: But the difference is you finance the Labor Party at elections, you man the booths, you run ads at times, you must expect something in return?

McMANUS: Well, actually, just less than half of unions affiliated to the ACTU aren't affiliated to the Labor Party, so all the big unions in the public sector, Nurses Unions, teachers' unions, and also when we run campaigns, we will run campaigns around workers' issues, so we’ll run campaigns around secure jobs, better pay, any political party that who adopts those as saying they will do something about that will get our support.

CASSIDY: When you are asking for a boost in wages, do you have a figure in mind? What's a reasonable figure? Are you able to talk about a sort of across-the-figure in any way?

McMANUS: We've always thought that enterprise bargaining or the system in general should deliver pay rises at least in line with productivity increases. Over the last 10 years, productivity has gone up twice as fast as wages have, so clearly there’s something wrong there. At the moment the figures for essential services like electricity has gone up, much more that the headline CPI. Things like childcare, private health insurance, working people are really struggling to pay the bills, so we do believe there needs to be a significant boost in wages for the lowest paid workers, people on the minimum wage of $50 a week, and that will make a big difference also for our economy, because those workers spend that money they earn.

CASSIDY: Philip Lowe, the Reserve Bank Governor says that wages are starting to pick up and he talks about it being slightly stronger growth in every state and they says is a positive development. Do you agree with that? Changes are starting to happen already?

McMANUS: We haven't seen that change yet, and if there is a change, it must be a very slight one. We are not seeing that in bargaining and we’re not seeing that on the ground. Obviously the Fair Work Commission will make a decision often the minimum wage, what it should be on 1 July, very soon, but we're also worried on 1 July there will be another penalty rates cut, so that will offset that wage rise that those people were meant to get.

CASSIDY: And the Government says you're focused on the money, not on the jobs and last year 403,000 jobs created, 2017 was the strongest year on record for job creation and you will put that at risk if you push too hard for wage rises?

McMANUS: There is a few things here. Unemployment is around 5.5% which is the same as when the Coalition first came in, so it hasn't moved, and also got this other huge problem of underemployment and that's where people want more hours and can't get more hours. The old trickle-down idea, that if you increase wages, people will lose jobs, yet there is now evidence coming from around the world that that is actually not true. For example in the United States they increased wages in one state of the minimum wage and not the other, and actually jobs went up in the state where they increased minimum wage. Simple economics again - if low-paid people get pay rises, they spend it.

CASSIDY: Bill Shorten cop it is from the Parliament probably on his relationship with the trade union more than any other issue and it is because of the behaviour of militants and some officials and delegates within the organisation. Why don't you pull some of them into line?

McMANUS: I think that the Coalition will try and find whatever they possibly could to attack Bill Shorten on, and I think that if we were all, regardless of what the trade union movement did, if we asked for pay rises, if we asked for anything, they would always be attacking us, unfortunately. In terms of what you're talking about, I assume you're talking about some of the charges that some union officials are facing now.

CASSIDY: Any given time, there could be as many as 100 people on charges?

McMANUS: Yes, what's happened in our country, nearly all of those charges are for two things: Either taking so-called illegal industrial action or so-called right of entry breaches, particularly in the industry. And the reason that happens is that our laws in Australia make it illegal to take protected action when you need to, even as a last resort, unless you follow a whole lot of rules So in many other countries, if you were driving down the road and saw a group of worker in a building site who have stopped work and you would think they are having a disagreement with their employers over safety, and it's normal, in our country, we get fined, those workers individually then the union gets sued, and then it ends up on the front page of the paper and then in Parliament. Our laws in terms of taking industrial action are out of step with the rest of the world, it’s part of the reason why we've got record low wage growth.

CASSIDY: But it’s not just about right of entry and things like that, there is a lot of bullying and intimidation goes on?

McMANUS: Well I don't agree with that. The royal commission looked at this, for two whole years they went through all unions and in the end, what we’ve got is one conviction of a current union official and that was a bookkeeper.

CASSIDY: Can I ask you about immigration just before we wrap up because it's become quite an issue this week. The level is at 190,000 now. It looks as if that not going to be reached for various reasons, really around tighter control of visas and so on. What do you think about the level of immigration? Is 190,000 about right?

McMANUS: Yeah so Peter Dutton is the one that has brought it up all of a sudden and I think of it this way: Whenever they are in trouble, it's as if they want to break the glass and get the emergency hammer out and ‘let's start talking about immigration,’ and I really feel as though what they do is try and blame immigrants for things that are actually - things that are wrong with the economy, and a lot of things that I've talked about, it's not the fault of immigrants that jobs are being casualised or we can't get pay increases.

CASSIDY: No, but they take about overcrowding as well.

McMANUS: With immigration, we've got permanent immigration and this new issue of temporary visas that are operating in Australia that were only tiny 20 years ago. Now there is around a million people with work visas, temporary work visas. What’s happening is that we are shipping in exploitation and it is taking away jobs for local people, so if we wanted to do something about this issue, Peter Dutton could do something about that now and we should move away from this temporary idea of having guest workers and instead move to ensure we maintain a proper permanent migration system.

CASSIDY: What do you say about overall numbers then? If you were to reduce the temporaries, are you happy with the overall number?

McMANUS: We wouldn't put a number on it, we think at the moment we have far too many people on temporary work visas, though.

CASSIDY: Thanks for your time this morning.

McMANUS: No problem.