Geoffrey James:
Welcome back to Squawk Australia, I’m Geoffrey James, you are watching CNBC. The newly elected Rudd Government here in Australia won last years election on an agenda of change. Part of that change was the repeal of the controversial workplace laws and enacted by the Howard administration which had removed many of the legislative protections that workers had come to enjoy. On the eve of the new industrial laws going through Parliament, what does business have to fear and why has the Opposition suddenly thrown their support behind Labor’s new laws? A short while ago in fact just over one hour ago I spoke with the Deputy Prime Minister, Ms Julia Gillard and I started by asking her what business has to fear from the new legislation.
Julia Gillard:
Well I can certainly say to businesses that there is nothing to fear and we’re not going back to anything. We’re going forward to a new system that will be fair and flexible and balanced. In designing the policy we took to the election and the bill that is before the Parliament now commences to implement that policy, we consulted extensively with Australian business. We understand their needs for flexibility and our system will have a lot of flexibility in it but it will have fairness too and the Australian people rejected the Liberal Party’s Work Choices laws because they simply lacked any form of fairness, particularly for the workers most at risk in the Labour market, young workers and low skilled workers.
Geoffrey James:
Let me now turn it right around, the Prime Minister has warned intensely about inflation and indeed cautioned workers not to push for wage increases unless they can guarantee greater productivity. This goes of course right against grassroots Labor tradition of big government spending and in the case of former Labor governments terrific increases in wages fostered under the governments of those times. Are you Ms Gillard concerned that workers down the track could claim in fact that they were betrayed?
Julia Gillard:
No I’m not. What we said to the Australian community before the election was perfectly clear. We have the benefit here of having published our comprehensive policies months before the election were held. So everybody Australian employees, Australian employers had the opportunity to read our policy and understand what it would mean for them. And what we said to Australian working people was that they needed to be productive, that our industrial relations system was going to be focused on lifting productivity and whether or not they could get wage increases was all about how well their workplace was going. The focus was going to be on a decentralised system, enterprise bargaining, making sure you are there at work doing the right thing, being more productive and if there is greater productivity in the workplace then there are gains to be shared. So that’s the system we described to Australian working people, that’s the system that we are delivering for them. It’s all about productivity and all about an enterprise focus.
Geoffrey James:
Deputy Prime Minister just following on on this very issue, the Australian Chamber of Commerce and Industry has rejected your message on wage restraint. The unions say it is an attack on workers pay. Given this widespread opposition, is wage restraint perhaps the best way to go to fight inflation? Would you be reassessing the strategy in the light of this opposition?
Julia Gillard:
Well on the question of wage restraint can I be clear here. We understand that Australian working families are under cost pressures, they’ve got rising mortgages to deal with, those that are renting have rising rents, we have petrol prices and grocery prices going up, these are the basic things of everyday life, the basic costs that a family faces so we understand that people are under pressure. But what we’ve said to people is that you don’t make a real gain if we end up fuelling a wages inflation cycle. That there is need right across the community to help fight inflation, government is leading the way by showing restraint on the Federal Budget but also about by investing in increasing capacity in our economy particularly investing in skills. One of the great problems for our economy now is that we face the skills crisis in the rapidly growing industries in our economy and the Government is committed to fixing that by investing in more than 400,000 new training places with 20,000 of them coming on stream as early as April this year. We are also saying to working people that we understand that it’s easier for people at the upper end to show restraint and politicians have lead by example by having a 12 month wage freeze.
Geoffrey James:
Now your Government has made it very clear and has maintained very strongly that it welcomes foreign investment but having said that it now says foreign state owned wealth funds must face closer scrutiny in Australia. Is there perhaps not an inconsistency here?
Julia Gillard:
My colleague the Treasurer has been dealing with this matter and he’s been making it clear that we welcome foreign investment in this country, we are open for business, there’s no doubt about that. Of course we do have a foreign investment screening mechanism and that screening mechanism does have the Treasurer particularly, assessing questions of the national interest. But we have been very open to foreign investment, if you look at our resources sector, if you look at our economy right across the board, we’ve been very open to foreign investment and that will continue.
Geoffrey James:
According to the polls Kevin Rudd is the most popular Prime Minister in 20 years. Business has in the main swung behind Labor despite the surprise from some. Commentators are trying to find something to pick apart with the new Government, they’ve been having a lot of difficultly in doing that. The Opposition has swung radically to support the new workplace reforms, you’re new workplace reforms to the astonishment of most people who ask what the Opposition actually stands for and they have difficulty finding an answer. You are having great fun, when will the honeymoon be over do you reckon?
Julia Gillard:
I not sure I am a good person to ask that question of but it seems to me that the important thing for government is to be there delivering the things we committed to the Australian people we would deliver and we are doing that right across the board. Whether it’s workplace relations, whether its education, investing in skills, investing in our schools, whether it is ratifying Kyoto and dealing with the consequences of climate change, we are delivering what we promised and I think when people see that then they do give that a tick. They went to the election, they voted, they knew what they wanted and they want the Government now to get on delivering it and we are.
Geoffrey James:
Deputy Prime Minister, a question on foreign policy the Australia /US ministerial talks concluded over the weekend, two questions for you. How would you describe the current state of bilateral relations between your country and the US and is there any substance to report that Washington is keen to see your government to play a greater role as an intermediary between the West and China which is growing economically and politically?
Julia Gillard:
Our relationship with the United States of America is incredibly strong. It’s a relationship that’s endured across the cycle of politics whether it is Labor governments, whether it is Conservative governments, it’s the view of this nation that America is a great ally of ours and the bonds there are very deep. They are people to people bonds as much as they are government to government bonds. From time to time we disagree with our American friends about foreign policy questions. For example the Labor Party disagreed with America on the question of Iraq. But the strength of the relationship goes beyond any one disagreement or any one issue and I think it’s been on display as my colleague the Foreign Minister has been at these meetings on the weekend.
I think Australia is placed to help people understand dealing with China. Of course the Prime Minister is a fluent mandarin speaker and someone who spent a lot of time in China. We are very lucky to be in this region of the world, very lucky to have the sort of relationship and understanding we have with China as well as the great and historic bonds with America.
Geoffrey James:
Ms Gillard there is no doubt that you got the tick that is for sure. You are Australia’s first woman Deputy Prime Minister and empower now for about three months, tell me how you personally are travelling and how winning office has changed your life. What happened to Julia Gillard when she was just Julia?
Julia Gillard:
Well one of the great things about the Australian people is their informality so as I travel around this country I am still just Julia. People barrel up and have a conversation and whether they’ll be small school children or whether they’ll be people who are of working age and wanting to have a chat about industrial relations or whether they’ll be older Australians, everybody still calls you Julia, people call the Prime Minister Kevin and I think that’s terrific. I think it says something about the Australian people that we don’t have that real sense of hierarchy, we have a sense of we are all in this together.
Geoffrey James:
Julia Gillard, the Deputy Prime Minister of Australia, it is a true delight to have you on Squawk Australia, thank you ma’am we look forward to welcoming you again in the near future, have a nice day. That’s Julia; you’re watching Squawk Australia live from Sydney. She is a very nice lady.
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