Event: Jennifer Westacott interview with Fran Kelly, ABC RN Breakfast

Speaker: Fran Kelly, host; Jennifer Westacott, chief executive Business Council of Australia

Topics: US Presidential election; US China relations; trade; climate policy; JobSeeker

E&OE

Fran Kelly, host ABC RN Breakfast: Jennifer Westacott, welcome back to breakfast.

Jennifer Westacott, chief executive Business Council of Australia:Thanks very much Fran.

Fran: Joe Biden will apparently be sworn in as US President on January 20th. Will he be good for Australian business?

Jennifer: Look, I think the share market says it all yesterday. I think the answer to that is yes. I think the United States has definitely turned a corner. You've got a record turnout. You've got a comfortable win by Mr Biden. I think he'll bring civility to public life and that's very important Fran, because stability is crucial to problem solve and they've got a lot of problems to solve. I think he will have to govern from the centre though. Because I think that's crucial if you're going to unify the country, if you're going to get the economy going and obviously get the pandemic under control. So I think yes, and if there's an opportunity to revisit TPP, that's even going to be better. But I just make one very brief point about the US election that nobody should ever underestimate the importance of the Australian way of life in terms of a strong and growing economy and a strong social safety net. I wasn't surprised by how close the election was because I always thought the economy would play a bigger role because they do not have that strong social safety net. And I think, note to national self, don't let go of those core things of a strong and growing economy and a decent social safety net for people.

Fran: I'll come to our social safety net in just a moment because it's in the news this morning. But just in terms of one of the major problems that the US and the world has to deal with is the US-China relationship. The outgoing President had an antagonistic relationship with the Chinese leader Xi Jinping but in more recent times, President-elect Joe Biden has also called Xi Jinping a ‘thug’ and has vowed to pressure isolate and punish China. Do you see much difference in attitudes to China, between Joe Biden and Donald Trump?

Jennifer: At a substantive level not really. I think there are big trade tensions there, and certainly all of the advice I've had is that there won't be a substantive policy change. I think there will definitely be a tone change and hopefully a more civil tone, that allows trade negotiations to obviously proceed. This is a very difficult issue for us, Fran, I don't think there's a simple solution here because we've got to get to a sort of principled realism here. On the principled side, we've got to make sure that we maintain our sovereignty. We maintain our security, that we don't tolerate levels of foreign interference. On the realism side, you know, we cannot recover without a strong trading relationship with China. And so we have to make sure that from our perspective, we don't allow the relationship to deteriorate further and that we've got those policy and diplomatic settings that allow businesses to continue to trade.

Fran: Do you think if the relationship between China and the US does improve or the tone of it improves that Australian businesses will benefit from that? Because we seem to be copping a lot at the moment for basically, you know, being accused by China of being a lapdog of the United States, or could it work against our exporters if China and the US repair trade relations?

Jennifer: Well, it was hard to see how that will play out because we don't know the detail of that, but I think anything that kind of establishes sort of some semblance of world trade order and the trading systems that have been so important, not always effective, but important over the last 20 or 30 years, that is a good thing, but we have to manage this relationship on our own terms. We have to make sure that we don't let it deteriorate any further that we restore it. That we make sure that our rhetoric and our language is careful and that we create that floor so that businesses can continue to trade.

Fran: Well, are you satisfied with the government's response to the threats advanced from China so far?

Jennifer: Look, I think it's a very, very difficult balancing act. I think yes, they have done what they needed to do, which is to maintain our sovereignty and our security. We continued to trade with China. There's continued to be a lot of discussions with China. Businesses of course, are continuing to trade. I just think that we've got to stay the course. And comments about diversification, I don't think are particularly helpful because it's not realistic in many cases. But companies and places like universities are responding to demand. So it's not a question of diversifying away from, of course we should diversify, we should do more with Japan and India and Indonesia, but diversifying away from China is just an opportunity that will go somewhere else and that's jobs and prosperity that will go to other countries.

Fran: What about climate policy? We do expect to shift in US climate policy when Joe Biden takes over the presidency. Our Prime Minister says they welcome the US signing the Paris Agreement and don't see much difference really between the US approach to climate policy and Australia’s. But Australia is refusing to commit to zero emissions by 2050. Do you think there'll be more pressure on Australia to sign up?

Jennifer: I don't think there's any doubt that Mr Biden will have a renewed focus on what specific actions will obviously depend on the Congress. Look a couple of things. I think it's important for everyone to remember Australia never left the Paris Agreement. Australia signed the Paris Agreement after President Trump pulled out. We've got a target, an interim target, we're on track to meet that target. We've got a very robust set of policies and systems. Business would like to see government embrace the 2050 net zero target because it will give us a sense of direction. We believe it will open up more investment. It will make an Australia attractive, and it will give us that sense of ‘where are we heading to and how do we direct our policies to it’. But I think it's a bit naive to say that Australia has to catch up to the US. The US has to catch up in Australia.

Fran: But there is a lot of the world that is certainly ahead of Australia in terms of that target.

Jennifer: Sure.

Fran: Can I just ask you finally, before we run out of time, you mentioned the safety net there, and it's in the news today here in Australia, the federal government will extend the coronavirus supplement for job seekers until March, but the rate will be cut by another a hundred dollars a fortnight. So it'll be down to $150 a fortnight on top of what was the old Newstart, is that good enough? You've been for many years calling for Newstart to be increased.

Jennifer: Yeah, it's a bit of a relief, but it's no solution Fran. We need a permanent solution here, a permanent increase for this allowance. You know, we need an allowance that gives people a dignified life that does not see them fall into incredible poverty, where they will not be able to get back into the labour market. We need the skills system to wrap around the many people who find themselves in JobSeeker. But my point is simply this why shouldn't unemployed people have the same certainty and predictability instead of living from three months to three months and get a decent, adequate allowance that allows them to live lives of dignity.

Fran: So just briefly and finally because the news is a minute away, does a $150 extra a week, as a coronavirus supplement, does that represent a decent, adequate allowance in your view?

Jennifer: We've called for it to get closer to the Age Pension. And that's where it used to be set. And we'd like to see the permanent allowance set at that rate, but not just the allowance. You've got a wrap around a of services for people, a decent skill system. I think we need a permanent approach to the allowance, to the system, so people can live a dignified life.

Fran: Jennifer Westacott. Thank you very much for joining us.

Jennifer: You're very welcome Fran.