Event: BCA Chief Executive Bran Black interview with Holly Stearnes, AM Agenda, Sky News

Speakers: AM Agenda, Host Holly Stearnes; Business Council of Australia Chief Executive Bran Black

Date: 21 March 2025

Topics: ACCC supermarkets inquiry, Federal Budget, CFMEU

E&OE

Holly Stearnes, AM Agenda Host: Joining me now is the Chief Executive of the Business Council of Australia, Bran Black. Bran, thank you for your time. Good morning to you.

Bran Black, Business Council Chief Executive: Good morning to you.

Holly: What do you make of this - do you believe that they're not ripping us off?

Bran: Well, I think what's been clear in this report is that there is no evidence that's come through of price gouging. What we've seen is that the supermarkets are profitable, but that is a good thing. We need our businesses to be profitable. We know that profitable businesses support jobs, they support our economy more broadly, they support the payment of taxes, and of course, there's the dividends that get paid to support retirees, superannuants and so forth.

That is a good thing. We haven't seen evidence of price gouging. What we've also seen through this report is that there hasn't been a basis identified for the divestment powers that had been mooted. That is also useful because one of the key arguments that we've been putting, and that many others have also put, is that divestment counterproductively increases prices, reduces job security, and can reduce competition.

Holly: So, we’ve heard from the government, obviously this morning, saying that they're putting about $3 million investment into this to address the competition issue and boost this issue that many are facing at the moment, what do you make of the government's response to this issue?

Bran: Well, I think they've made their response, and of course, we'll see that there's probably more statements to come. That's because the report has only just been dropped, so there are still people that are going through it, considering its findings very carefully, as should be the case. We've obviously had an opportunity to review it only since about 6:30 this morning. So, we're in the process of doing that ourselves.

Where we can find opportunities for increased transparency, we should take those. Where we can find opportunities for increased competition, we should take those as well. But broadly speaking, we've got businesses here who aren't engaging in price gouging, who are providing services right across our country, and we are seeing that there is increased competition within this sector due to new entrants, such as, of course, we've got IGA, but you've got Aldi, and you've also got the fact that there are the online retailers as well.

Holly: Yeah, it’s a really interesting point you make there. So, you're saying it comes back to inflation, not that they're price gouging, but, I mean, consumers are necessarily feeling that in their back pockets, right?

Bran: It's such a good point to make. I think one of the key points that the report seems to have noted is that right across our economy, we've seen inflation increase, but that's increased for supermarkets and for grocery prices at broadly the same rate as inflation across the economy. So, what that means is that if we're trying to make life a little bit easier for people, if we want people to have more money in their back pockets at the end of the week after they paid for their school fees or their mortgage or their rent or their groceries, then we've got to address the underlying causes of inflation, and that really comes down to the lack of productivity at the moment.

Productivity is sitting at negative point one of a per cent over the course of the last 12 months. It's at its lowest decadal productivity rate in 60 years. So, we've got to get on top of that, and that's important, because that's how we drive real wages. That's how we deliver better outcomes for people in their back pockets.

Holly: Yeah, interesting I mean, this obviously leads into, and you guys have got a busy week coming up. The budget will be delivered next week. How are you feeling about that and the outlook there?

Bran: Well, of course, it's an election budget. So, for us, we'll be looking to see not just what the two parties in the budget address, but also in the budget in reply address talk to for the next 12 months, but what they speak to in terms of their priorities over the course of the next three years if they're fortunate enough to be selected by the people of Australia to govern for that period of time.

What we're looking for are policies that will ultimately reduce spending. That's important because that takes away inflationary pressure. Again, that means that it's more likely to give people scope to have a bit of cost-of-living relief. But we've also got to see policies to drive productivity. Both the Shadow Treasurer and the Treasurer have talked about the importance of a private sector-led growth agenda. You'll get that when you have reduced government spending and in policies that drive productivity.

Holly: But at the moment, we're seeing an all-time high in government spending all of these promises coming out, which all sound good, but it comes at a cost of the taxpayer right?

Bran: It does. At the moment, government spending is sitting at about 27 per cent of GDP, and that's the highest that it's been, other than during Covid, since the mid-1980s. And government spending is significant because when you're spending in the government sector, you're spending in a sector that is less productive than the market sector.

So, the government sector has a productivity rate over the last decade of about negative point 4 per cent. For the non-government sector, so the private sector, it's at about point 6 per cent so there's significant difference there. In other words, the more we're seeing the private sector spend, the more we're driving productivity outcomes. So, we want to see the type of policies that will facilitate governments helping businesses to make those types of investments.

Holly: So, you’re talking about a private sector-led growth here and a plan, and when you talk about those policies, can you just delve into that a little bit further. What would you like to see?

Bran: Yes, certainly. So, there are key areas that we think are really important. First and foremost, we want to see what other countries are doing in terms of prioritising deregulation, we think that we've got to do likewise. That's how we remain competitive. We've called for a number of key initiatives in that regard. We think it's also important to invest in how we can actually drive investment, so ideas like an investment allowance broadly-based across the economy, but also looking at research and development, how we can facilitate more research and development in Australia, because we know that research and development ultimately helps us drive the creation of new industries, new markets, and ultimately new jobs and opportunity across the country.

And then we want to see industrial relations tackled as well. At the moment, industrial relations is a significant problem. The balance has shifted too far towards the unions and their interests. What we're proposing is that we restore a sense of balance.

Holly: Bran, do you think Australia is a good place to do business at the moment?

Bran: Look, I think Australia has so many opportunities. We are so very fortunate. And when I speak to peer organisations overseas, they'll consistently say that they love the fact that we have a democracy. We have a parliament that, for the most part, people are very comfortable with, and they can trust. We have secure property rights, a great financial system, abundant natural resources. Those are all the positives. But increasingly, what I'm hearing is that they regard Australia as a place that is just no longer competitive for their investment.

And that's disappointing, because if you look at some of the key reports that come out of the government, like the Intergenerational Report, they show that unless we take steps to get more competitive, we are on the path to decline. I stress that, we are on the path to decline. What we want to do is see a genuine discussion about the types of policy area reforms that can drive a private sector-led recovery.

Holly: Yeah, powerful words there. We are running out of time, but I of course want to get your thoughts and of course, budget's going to be a big week next week, and we'll get your thoughts on that hopefully over the next couple of weeks, back in the studio as well.

We do have to wrap things up, but you are calling for a royal commission into the CFMEU. Can you just give us your thoughts on that please?

Bran: Yes, certainly. I think we've seen in the last nine months that there are very serious allegations of criminality that have been levelled against the CFMEU and people within that organisation. Unfortunately, we've seen over the course of the last week that nothing's changed, that this type of behaviour is still continuing. Now, my comment nine months ago was that if what we had seen then wasn't a basis for royal commission, I didn't know what was.

The fact that it is still continuing, just says that it is even stronger now that need for genuine transparency, a genuine inquiry with the full powers of a royal commission, so that we can get to the bottom of what the root causes of these challenges are, and so that we can put in place the types of measures that we know will ultimately help ensure that the industry can return to a position of trust.

Holly: Yeah, it just seems to be the scandal that just keeps on giving, doesn't it. And questions loom over the administrator’s power to actually stamp out this criminality as well. Thank you as always for coming on. I really appreciate your time today. Thanks Bran.

Bran: Thank you.