Event: Bran Black, interview with Laura Jayes, AM Agenda, Sky News
Speakers: Laura Jayes, Host, AM Agenda; Bran Black, Chief Executive, Business Council of Australia
Topics: Minimum wage; Greens’ divestiture Bill; productivity; fuel emissions standards

E&OE

Laura Jayes, Host, AM Agenda: The Federal Government says it will support a minimum wage rise in line with inflation this year, but the Unions want to go a step further, calling for an above inflation increase of 5 per cent. Joining me now is the Business Council of Australia Chief Executive Bran Black, Bran, thanks so much for your time. What would be about right here for the Fair Work Commission?

Bran Black, Chief Executive, Business Council of Australia: Well, Laura, we think that the fundamental thing here is to make sure, of course, we've got to provide assistance and provide support for people who are doing it tough right now. But what we're seeing at the moment is that wage increases aren't being matched with productivity gains. And the consequence of that is that we're not seeing real wage increases. So, whilst you might have an increase in your wage, that's not being backed with how you feel when you go to the checkout, or how you feel when you're at the petrol station and you're paying your bill there. So, what we've got to do is fundamentally make sure that we don't let these types of increases get ahead of productivity.

Laura: Okay, how do you boost productivity? What's the number one thing the Government can do right now?

Bran: Well, in our budget submission we've said that there are a number of key things that the Government needs to focus on. In the first instance, it can do that by looking at a real red tape reduction program. In the second instance we think that there's a program associated with how we can go about winning investment and beyond that there are initiatives around jobs and skills, what we can do to invest in that space. And then of course, there is the all important question of how we can go about reforming our tax system. Fundamentally, though, it's about how we can go about driving our economies to be more effective so that we can attract investment.

Laura: Okay, so say the Union's get their wish of a 5 per cent increase to the minimum wage, what would that do to the economy in your view?

Bran: Well, it's difficult to quantify precisely what that would do. But what we can say is that we really need to make sure that ultimately people aren't left worse off. Because at the moment what we're trying to see, with certainly the Reserve Bank's approach to managing inflation, is that the gains that people take home, in terms of their pay packets, are ultimately gains they feel day to day. At the moment when they get a boost to their pay that's being eaten up with increases in costs, so ultimately, they don't feel as though they're getting ahead. The way that you can get ahead is by making sure that you deliver real wages growth and that's why the productivity agenda is so important. So, our urging to the Fair Work Commission is be very cautious here. Be very cautious here because we want to make sure that we don’t deliver gains that are ultimately counterproductive by driving up further inflation, and therefore reducing the scope for the Reserve Bank to reduce interest rates as quickly as possible.

Laura: Okay, a couple of other issues here, of course, the supermarket, big supermarkets Coles and Woolworths, they have all the market power. Well, are dominant in the market. Have been under the spotlight that, you know, the Government, Opposition, Crossbench is all over this at the moment. You've also been critical of the way they operate. How can this be fixed in this country?

Bran: Well, certainly, what we've got to do, I think the real challenge is that people are. The fundamental problem that we're looking to try and address is that people are doing it tough. So, there are steps that can be taken in order to try and address that. We've seen in the course of the last 36 hours that the Treasurer has mentioned the importance of providing the type of short-term relief that we've seen delivered over the course of the last 36 months or so, including utility relief, and so forth. But then it goes to that broader question in terms of productivity and how we can start to see people genuinely get ahead day to day. Now, in terms of what we've seen in the last week in relation to discussions around supermarkets and divestments, we've been incredibly cautious and concerned with respect to the proposal that's been put forward by the Greens’. Because as we see it it's not a proposal that’s been backed by the evidence, we've seen a number of different reviews look at this question of divestiture over the course of the last three decades. And each time that has happened each one of those reviews has come to the conclusion this is not a path that Australia should go down.

Laura: Okay, but what would you suggest then? Because the market power is becoming almost a political problem to.

Bran: The challenge that we've got to look at in terms of market power and so forth is you've got to remember that Australia is quite a small jurisdiction. So, we're, you know, three times smaller population than the UK and I think it's something in the order of 20 times the size. So, we've got different types of competition challenges here. When I go back to that point, what is it that we're trying to do? Ultimately, we need to try and support people through what is a difficult time. And that's where those cost-of-living relief initiatives really come into play. But ultimately, we need to take the steps now that go towards delivering the longer-term productivity growth that's necessary to deliver them real wages increases so that they take home more in the long-term.

Laura: I’ll tell you what, a lot of people at home are looking at this conversation and others that have been in the lead up to this and saying, well, Australia produces all of this food, all of these groceries and they're among the best quality. In fact, though, we're paying so much more than comparable countries when we go to the supermarket. So, look, I think this is becoming a huge issue in the lead up to the election. We'll see what happens there. Before I let you go, I just wanted to ask you about the electric vehicles, well the encouragement of electric vehicles. The Government was looking to put in fuel emission standards, that bar has now been lowered. We're expecting to get an official announcement today. Is that something that you welcome?

Bran: Yeah, we think it's really pleasing that there is a process that's been underway of listening to industry concerns, we think it's appropriate to look at what the United States has done. Ultimately, everybody wants to move towards net zero. There's no question around that. But we've got to do it in a way that's both ambitious, but also realistic and we think that this approach is reflective of both of those objectives.

Laura: Okay, Bran, thanks so much for your time. We'll see you soon.