ADDRESS TO THE FINANCE SECTOR UNION NATIONAL CONFERENCE

Thank to Julia Angrisano for the opportunity to address your conference today and congratulations to the FSU on 100 years.
 
It’s so good to be among friends with the shared values of fairness, respect, equality and helping each other out when times are tough and who understand that being a trade union member is about helping to build a better life for you and your family, your colleagues, and your community.

To all of the workplace leaders here today, and I understand that in your gathering today you have 14 new delegates -  I want to acknowledge you all, thank you for your service and tireless work and note over the unions 100 year history, it is the workplace volunteers who define the union. It falls to you to take up that role in challenging and changing times. 
 
From restoring public trust in your sector, to ensuring wages and conditions are fair and improving, dealing with the impact of evolving technology and automation and the professionalisation of your industry – I know that the FSU is up to the task.
 
We meet today in tough economic circumstances.

After six years of Liberal governments, Australians are struggling to get by.

Economic growth is at its lowest levels since the GFC, and wages are flat.

Nearly two million Australians are unemployed or underemployed.

Household debt is at record levels. Business investment is down. Consumer confidence is down.
 
We know what is happening. We also know how to fix it. But the real tragedy is that the Prime Minister Scott Morrison just seems content to have won an election that he didn’t expect to win. He doesn’t have the will or the ability to put in place a plan to turn the economy around.
 
There are three things we need to do: you have a role and the Government have a role. The Government needs to listen to the concerns that extend from the RBA board to the boardrooms of corporate Australia – implement a fiscal boost through infrastructure, tax relief and increasing Newstart.
 
But let’s talk about your role.
 
Wages
 
In the 1980’s Paul Keating used to say that every galah in the pet shop was talking about microeconomic reform.  If there are still galahs in pet shops today, they are talking about wages. Since the Global Financial Crisis, wages have stalled. Profits have recovered – in fact the profit share of the national economy has never been better. CEO pay continues to skyrocket – with the top 10 CEOs in Australia each taking home more than $10 million last year – while ordinary Australians see their salaries stagnate.
 
Wage increases are critical because when family budgets are stretched, when confidence is low then people aren’t spending. A decent wage increase, on the other hand, means customers in shops. It means businesses hiring staff and it means entrepreneurs investing in new equipment or new businesses.
 
You’ve got some big guns in your corners who agree. Recently Philip Lowe – the Reserve Bank Governor – gave a speech in Armidale, where he said that we need to go back to wage increases that start with a three.
 
He noted that low wage growth is a key factor causing our economy to slow – with household consumption weak despite growing employment.
 
Now a Government that was serious about economic management would be looking for allies in solving our wages problem.
 
A few months ago we said farewell to a great Australian – Bob Hawke. When Bob became Prime Minister he realised the country had a wages problem as well – back then it was a wage price spiral, but Bob was a man who had spent his entire life bringing Business and unions and Government together to solve problems. In 1983 he did just that – he reached agreement between the unions, business and government. A series of Accords were born which were instrumental in economic recovery and a new social safety net.

This growth was facilitated by responsible unionism.  Unions bargained for wage increases and improvements in conditions and the social wage – Medicare, Superannuation, childcare – it was all on the table. Just as  important, unions had a stake in the future of enterprise, productivity growth and understood the need for change, managed in a way that was fair to the workforce.
 
How different would it be today if our current PM took the Hawke approach and said we’ve got problems with wages. We should look to the union movement as part of the solution to low wages and inequality – the need for a fairer distribution of wealth.  Instead we see an entirely different approach.

A government with a union allergy, going in the opposite direction. It’s attacking unions out of instinct and has floated only one idea - that workers pay for their own pay rise – by foregoing superannuation.

There is something very cynical and unfair about this. After years of wage restraint and an economic crisis looming – the best thing that the Government can do is suggest that the only way you will get a fair pay rise is if you give up legislated super increases.
 
It is worth noting that the Government’s Budget forecasts for the next for years assume a wage growth between 2.5% this year growing to 3.25% in 2020-21.

But the legislated superannuation guarantee increases are worth 0.5% per annum in five yearly instalments between 2021 – 2025: less than one fifth of forecast wage growth which factors in the legislated increase.
 
Some in the Government expect you to believe that if we cancel those increases – not set to take place for another 2 years – wages will increase today.
 
This is not a claim that is borne out by the evidence, or by common sense.
You don’t need to cast your mind back far to see why – back to when the scheduled Super Guarantee increase to 10 per cent in 2015 was cancelled.  Wage growth did not rise.
 
And to claim that business is going to pay workers more in wages when they don’t have to – in a time when private and public sector wages are as stagnant as they’ve ever been – simply isn’t plausible.
 
Attacks on compulsory superannuation
 
Our $2.7 trillion in superannuation savings is something we can be proud of. Over the last 3 decades the average worker has gone from having no super to having a retirement fund of more than $200, 000.
 
There are some in the Liberal Party who want to dismantle it. They propose to make superannuation “voluntary.”  We don’t need modelling or even an imagination to know what this looks like. We just need a memory.

Some of you may remember what retirement savings was like before compulsory superannuation. We actually had a name for people with superannuation entitlements: men. Actually – not all men – more likely managers than labourers. Even in the industries that ostensibly provided superannuation in the form of defined benefits – like the public sector and the finance sector – the vesting rules meant that the low paid and short term employees ended up funding the benefits of their bosses.
 
As with most areas of our economy, the superannuation system still needs to improve in terms of the gap between men and women. I know this is something your union is very passionate about.
 
The average balance for all members is 63 per cent higher for men, the average balance for members is 72 per cent higher for men in the 60-64 age bracket and 23 per cent of women in the 60-64 age group have no superannuation. We must do better.
 
This crazy idea of voluntary superannuation means workers in desperate situations will pay more tax on the income they divert from retirement savings, and have less in super at the end of their working lives.
 
A system where low income earners are paying more tax and retiring with less is not a system based on fairness.
 
The Liberals are trying to convince us that the problem with low wage growth is super. Actually the problem with low wages is low wages and unions are a part of the solution.
 
Banking Royal Commission
 
I would like to acknowledge the work of FSU members from the start of the campaign calling for the Royal Commission. Whilst FSU members and workers in the finance and banking industry were under sustained pressure to do things in contrary to the interests of the customer whilst the coalition voted 26 times against holding the Royal Commission. You knew what was going on and the need for scrutiny and change.
 
The fact that FSU members were the only group granted leave to appear at every session of the Royal Commission speaks volumes to roll FSU members played on shining a light on the darkest sections of the industry.
The role your union collectively played is something you should be proud of.
And while the cost in remediation is expected to exceed $10 billion the reputational damage has been much greater.
 
I know that you hoped for much more from the Commissioners recommendations. In fact much of what was exposed and what was recommended was not new. The crimes had been known to regulators, the recommendations had been put to government by previous inquiries. But they were ignored. It’s all the more reason why we should be impatient for the recommendations to be implemented - all the more reason to ensure that the face of finance is changed for ever.
 
To ensure that happens, we need:

  1. The Government to implement the recommendations – carefully, with consultation, but quickly nonetheless.
  2. A permanent change in the culture – from one driven by profits at any cost to one driven by service to the community.
  3. Strong well-funded regulators - staffed by capable, professional career servants of the public interest.

But there is also a key role for the union – your union. In many, professions the union is not only the protector of remuneration – it is also the guardian of ethics and professional standards.
 
The FSU can play this role by continuing to push for higher ethical and professional standards across the whole financial sector.
And FSU members should feel supported by their union to call out wrongdoing by their employers – whether the behaviour is hurting employees or customers.
 
It’s been a great pleasure to talk to you in your 100th year. I wish you many more decades of success.

ENDS