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Independent senator David Pocock is the government’s best hope of passing its industrial relations package. He says it’s ‘fascinating’ how lobbying works in Canberra. By Mike Seccombe.

Industrial reforms: The David Pocock interview

Federal independent David Pocock in the senate chamber this week.

Credit: AAP Image / Lukas Coch

Michaelia Cash, Tony Burke, David Pocock: one of these three central players in the biggest debate in Canberra this year, over industrial relations reform, is not like the others.

It’s Pocock, of course. For all their differences, Burke, who organised his first “union” among fellow paperboys at a newsagency in Sydney and worked for six years as a shop assistant at Grace Bros department store, and Cash, the bête noire of organised labour who, as the daughter of a construction company owner and Liberal Party politician, grew up wealthy in Perth and went on to study law in London, have one key similarity: both are steeped in the subject before the parliament. Pocock, who is generally seen as smart and thoughtful, is not.

Industrial relations has always been the key point of difference between Australia’s major political parties. The contest over how the nation’s wealth is apportioned between capital and labour is the great constant of politics. There is the party of the workers and the party of the bosses.

Burke, the minister for Employment and Workplace Relations, formerly was an official with the Shop, Distributive and Allied Employees’ Association, now the SDA and colloquially the “shoppies”, Australia’s largest private-sector union, which represents workers in the retail, fast food, warehousing, hairdressing and beauty industries, among other generally low-paid and often casualised and insecure industries. He is a lawyer and an 18-year veteran of federal parliament.

Cash, the shadow minister, practised in employment and industrial law before entering politics. She has served 15 years in the senate and filled several relevant portfolios in the past Coalition government.

And then there’s Pocock. He was raised on a farm in Zimbabwe and brought to Australia by his parents 20 years ago, after then president Robert Mugabe’s land reforms saw their farm compulsorily acquired. Until 2020 he was a professional rugby union player, whose long list of achievements included captaining the Wallabies. When he retired from rugby, he said he would focus on conservation efforts.

He is not a lawyer. He holds a master’s in sustainable agriculture but has no background in industrial relations. He was not marinated in the ideology of any particular party, although he holds progressive views on most social issues. When he ran for a seat in the senate at the May election, his campaign focused on climate change and integrity in politics.

Yet now, because of the way the numbers fell at the election, he finds himself the crucial swing vote on the Fair Work Legislation Amendment (Secure Jobs, Better Pay) Bill 2022.

You might think he would find it daunting, being thrown in the deep end of the most intractable issue in Australian politics. But when asked to describe the experience, the word he chooses is “fascinating”.

“It has been a fascinating insight into the amount of lobbying, how much goes on, given that this bill is not yet before the senate,” he tells The Saturday Paper.

Pocock is not bothered at all by the lobbying. He is, he says, “very new and very aware of it”, and considers it “an extraordinary privilege to be able to sit there and question experts, people with lived experience, all the various stakeholders, the relevant departments, and, you know, ask questions and target different parts of a bill”.

He has met major employer groups and heard their concerns, met unions and heard theirs; he and his staff are in regular contact with Burke’s office, working as methodically as possible towards an understanding of the detail of a dense omnibus bill the Labor government says will get the wages of Australian workers moving again after a decade of stagnation, and which is intended to lift up, in particular, the low-paid and job-insecure and to address the yawning gender pay gap.

The bill passed the house of representatives, 80 votes to 56, a couple of weeks ago, with the support of the Greens and four independents – Zoe Daniel, Monique Ryan, Bob Katter and Andrew Wilkie. But six other independents elected on similar platforms to Pocock – Kate Chaney, Allegra Spender, Sophie Scamps, Helen Haines, Rebekha Sharkie and Dai Le – voted against it.

The government wants it through the senate by the end of next week, before parliament breaks for the year. Pocock is resisting being rushed.

And the process has most assuredly been rushed by the government. It reluctantly agreed to a quick senate inquiry, which was so hurried that witnesses were appearing before committee members had a chance to read their submissions. The last hearing finished at noon on Tuesday, and Pocock was supposed to have his comments on the legislation finished by 12.30pm.

The majority report recommended largely minor changes. A dissenting report by Coalition senators, led by Michaelia Cash, came up with just two recommendations: that the bill be rejected by the senate, and that the government “apologise to the Australian people for promising that industry-wide bargaining was ‘not part of our policy’ before the election, and then attempt [sic] to legislate it by stealth once elected”.

The most significant recommendation from the majority related to the most contentious part of the proposed legislation, the “single interest multi-enterprise stream”, under which workers could negotiate agreements with multiple employers providing similar services. It proposed the threshold under which a small business could be subject to multi-employer bargaining be increased from fewer than 15 employees to fewer than 20.

Burke says the change would mean 97.5 per cent of businesses would be exempt from multi-employer bargaining. That equates to 2.5 million businesses, some 500,000 more than under the lower threshold. Nonetheless, he has signalled he is open to change.

Pocock says he has yet to decide on a number. “Some of the unions are saying that it should be one employee and everyone should be able to collectively bargain. Some of the business groups are saying 200,” he says.

He has other concerns as well, related to the single-interest stream. We need not itemise them here: suffice to say, Pocock finds “a whole bunch of things that are ambiguous and unclear” and in need of “more consideration”.

His position is that the legislation be broken into two parts, with the contentious stream to be dealt with later.

“The argument from the government is that there’s an urgency to get wages moving. And I agree with that. I hear the urgency [but] there is real anxiety amongst small businesses about what this means for them,” he says.

“I’ve made it very clear that 85 or 90 per cent of this bill, including the two streams that deal with lower-paid workforces, and in particular the so-called feminised industries… they’re good to go. Those could go through, and those people could have a pay rise.”

There can be no doubt Australia’s wages system is broken, Burke told the National Press Club last week. During the past decade, he said, real wages have fallen even as productivity has gone up 10 per cent.

“We were told … that if you got unemployment low in a sustained way, that of itself would create the hydraulic pressure to push wages up,” he said. “We have now had sustained low unemployment … but wages aren’t moving up in the way that they should. Why? Because as that hydraulic pressure comes through, there’s leaks in the pipes.”

Over the past decade, Burke said, enterprise bargaining, which was intended to be the main conduit for wage rises, “became stagnant, and agreements fell off a cliff to the point now where only 14 per cent of the Australian workforce is covered by an agreement that’s in date”.

He strongly defended the multi-enterprise part of the package, saying it would actually protect businesses that paid their employees fair wages from being undercut by others.

“We’re providing a framework that allows good businesses to be able to deliver a better deal for their workforce and not compete in a race to the bottom with their competitors on wages,” he said. “They’ll still compete … on quality, they’ll compete on systems, they’ll compete on brand recognition. They’ll compete in a whole lot of other ways. I don’t see why a race to the bottom on wages should be part of that competition.”

So, what has happened to the wage rises that leaked away?

Gone to business profits, says Fiona Macdonald, policy director, industrial and social, at the Centre for Future Work, a labour market think tank.

“Corporate profits have increased as a share of GDP over the last decade. They are the highest in history, other than for a short period during lockdown. So, we’ve seen poor wages growth and expansion of corporate profits at the same time,” she says. “Our wages growth rates about 20th in the OECD.”

She and her centre support Labor’s plan. By their calculation, implementation of the proposed changes would result in “an improvement in nominal wage growth of some 1.6 percentage points per year. Just one year of faster wage growth would boost annual earnings for a worker with average full-time wages by $1473. That increment would expand to almost $8300 by the fifth year of [compounded] faster wage growth.”

Most of Australia’s employer organisations, as well as the Coalition parties, however, argue the costs to business of compliance, particularly small business, would depress activity and ultimately be counterproductive.

In its dissenting report, the Coalition cited a variety of business organisations on the point, perhaps the most succinct being Innes Willox, of the Australian Industry Group, who said wages growth would not come from a “union gun being held to an employer’s head”.

Employers always warn that they and the economy cannot afford higher wages, but right now there is actual, genuine reason for concern about the impact of stronger wage growth.

There is already galloping inflation, which the Reserve Bank expects to be about 8 per cent by the end of this year.

So far it has mostly been driven by prices, not wages. Nonetheless, the bank’s governor, Philip Lowe, warned again this week about the prospect of further inflation, and a recession, if wages chased prices up.

“If we all buy into the idea that wages have to go up to compensate people for inflation, it will be painful,” he said. “I know it’s very difficult for people to accept the idea that wages don’t rise with inflation and people are experiencing a decline in real wages.”

The central bank chief, who earns more than $1 million a year, continued: “That’s tough. The alternative, though, is more difficult.”

Lowe’s comments were immediately grasped by the opposition, business and the conservative media as a warning against Labor’s proposed changes. Burke’s frontbench Labor colleague Bill Shorten fired up in response.

“These wage changes aren’t going to lead to double-digit wages inflation. Like, it’s just rubbish,” he said.

So as the storm over Labor’s bill continues to intensify, a former footballer, a Canberra new boy on an incredibly steep learning curve, remains remarkably calm at its centre.

“It’s a big responsibility,” he concedes. “There’s a lot to… to work through.”

But his time to work it through is fast running out.

Labor shows no sign of agreeing to split the bill. That, they say, would defeat its purpose. And if they will not hive off the contentious part, as Pocock wants, will he still support its passage?

It’s a big decision, summarised by one of Labor’s people like this: “Does he stand up in the senate next week and vote against getting wages moving for the lowest paid in Australia, or not?”

This article was first published in the print edition of The Saturday Paper on November 26, 2022 as "Industrial reforms: The David Pocock interview".

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