News Room Archive
Increasing Social Prosperity: Michael Chaney’s Interview with the Sky News ‘Sunday Business’ Program
28 October 2007: Video and text transcript of comments by the immediate past president of the BCA, Michael Chaney, to the Sky News ‘Sunday Business’ program.
Helen Dalley: The last week in a job usually involves winding down. But not if you’re Michael Chaney. Wednesday night was his last as president of the Business Council of Australia … After two years focusing on red tape, infrastructure planning, industrial relations and tax cuts, Chaney’s most recently steered the BCA to set its sights on social policy. Michael Chaney leaves his successor, Greg Gailey, to lobby for reform in workforce participation and education, in particular, lobbying hard for higher wages for teachers.
Sunday Business reporter, Kylie Merritt, asked Mr Chaney about the challenges of his time as the country’s premier business lobbyist.
Michael Chaney: Yes. I mean one of the things you’re not having to be concerned about in business is political issues all the time. And when you’re dealing with national policy, they are of course a very big part of it. And I do find it pretty frustrating, I must say, that somebody has a good idea, whether it’s outside government or inside government, but it seems to take a long time to get it executed.
I also think there’s a need for politicians to state a vision for the nation. Because then I think people would understand that this action or that action was being taken in the context of a broader vision that they might buy into.
Kylie Merritt: So do you think vision is lacking in Australian politics?
Michael Chaney: Well politicians generally aren’t prepared to go out on a limb with a vision. And I think, you know, they cite some examples in the past where people have set solid targets. Like no child will live in poverty. And then been hung on them. I don’t think you need to have that specific a target. I think what you need to say, for example, is let’s try and ensure that Australia’s in the top five countries in the world in 2012, in terms of standard of living. And these are things we need to do to get to that level.
Kylie Merritt: Now the policy you outlined on Wednesday night is really another move away from the traditional business policies that the BCA’s been making. Why continue going down this road of social policy?
Michael Chaney: Well we think that social policy area is critical for the future of business because the students that are going through our schools, in the next couple of decades, are the future human resource for our businesses and our society. And unless they’re really well educated, we’re going to be left behind as an economy in the rest of the world.
Kylie Merritt: So you have a real fear that in, say 10 to 15 years time, Australia will not be operating as its maximum potential?
Michael Chaney: Well I think there’s a real risk of that because I don’t think teachers are held in high enough esteem. And I think that’s reflected in the way we remunerate them. And I think one ought to have an expectation of a society where we treasure our teachers and we say these are the most incredibly important resource we’ve got. They’re the future of our country. And let’s make sure we look after them. And let’s make sure we get the best people going into teaching, not going off into all sorts of other professions, as they are today.
Kylie Merritt: Is there anywhere else in the world that’s got this right?
Michael Chaney: Well Singapore, interestingly, about ten years ago, overnight just doubled salaries for teachers and introduced merit based pay and said we’re going to have accreditation to different levels. And if you meet those accreditation standards, you will be able to get these salary increases. If you don’t, you’ll remain on the salaries of today. And I think that’s what needs to happen.
Kylie Merritt: During your farewell speech on Wednesday night, you discussed the contrast between the economic prosperity that the majority of Australians are enjoying and the group that is still really doing it tough. You did touch on it before, but what is the business case for addressing that demographic?
Michael Chaney: Well, you know, frankly it’s going to be to the huge cost of business if we continue to have a part of our society outside the mainstream of prosperity. You know, we’ve got three million people of working age who aren’t working, many of whom would like to work. We’ve got very low participation rates in some parts of our society.
You know, whether it’s in south-west Sydney or in the Indigenous population. And that’s a real waste of national resources and also is not fair to the people concerned. And work we’ve done indicates that we can lift our participation rates, as they’re called – that is the proportion of people who can work in work – by more targeted programs and doing things at the local level. And we think business has a part to play in that, as well as government.
Kylie Merritt: You talked about the frustrations of being a lobbyist and then trying to get your ideas heard and implemented. What about for you personally? Is it frustrating, now that you’re sitting at that sort of senior strategic role, as opposed to the CEO role, where you could get in and get your hands dirty? Do you miss that?
Michael Chaney: Not particularly. I very much enjoyed that, the chairman’s sort of role. Partly perhaps because my role at Wesfarmers as CEO was as CEO of a holding company and a whole lot of subsidiaries, of which I was the chairman. And so I had that chairman’s role with those operating companies. But of course had a CEO role for the group overall.
And I found my role as chairman of NAB or of Woodside to have a whole lot of similarities with that old role, but of course without the ultimate group CEO responsibilities. And some aspects of that old group CEO role are nice not to have to worry about at the moment. Like you know, meeting 50 days a year with analysts and investors. So which we can leave to the CEO.
Kylie Merritt: Well in that CEO role at Wesfarmers, you were critical in embedding that now famous Wesfarmers strategy, which is to create value [indistinct]. Does the current proposal to purchase Coles fit that strategy?
Michael Chaney: Well I’d really hate to express the view on an activity taking place in a company that I used to run. But I have to tell you that I think the people in there, Richard Goyder and Gene Tilbrook and the other people involved there, are absolutely first class. I have no doubt they have the same very strong shareholder focus that I used to have and the board has. And I’ve got every confidence that it’ll be a great acquisition for the company.
Kylie Merritt: I know you don’t want to make a prediction on interest rates. But I am interested, in your role as the chairman of NAB, for your view on the broader economy. Are you concerned that we’re at the beginning of a cycle, where we start to see interest rates and inflation creeping much higher?
Michael Chaney: It’s impossible to know that actually. You know, there are obviously some inflationary signs in the economy. But at the same time, you’ve got the US really suffering in its housing market and threatened with recession and having to lower interest rates. Now that ought to have an effect here eventually.
You might find, because the US is so important in terms of the trade dynamics, China, the US, Australia, China and so on, you might find that the troubles in the US at the moment flow through and cause activity in Australia to be lower and you could find that interest rates fall next year.
Kylie Merritt: Would a change of government have any impact?
Michael Chaney: Well I don’t want to comment on the politics of the situation at the moment in the middle of an election campaign. But one point we’ve been making very strongly is that whichever party is in power after the election has to make sure that productivity is not affected negatively by the workplace relations legislation.
You know, it’s really important that we have enterprise-based workplace relations arrangements, because at the moment we’ve got this remarkable situation where Australia’s got strong wage inflation in one area of the economy in resources and it’s not flowing through right across the economy and causing widespread inflation.
That used to happen in the ‘70s, where we ended up with far higher interest rates and inflation rates. And we can’t afford to recentralise our industrial relations system, nor to have unions coming in and interfering in the process where they’re not needed.
Helen Dalley: Michael Chaney there, speaking with Sunday Business’s reporter, Kylie Merritt.
View the interview (in three parts) via the links provided below.