BCA Chief Executive Bran Black interview with Laura Jayes, AM Agenda, Sky News

04 February 2025

Event: BCA Chief Executive Bran Black interview with Laura Jayes, AM Agenda, Sky News
Speakers: AM Agenda, Host Laura Jayes; Business Council of Australia Chief Executive Bran Black
Date: 4 February 2025
Topics: Tariffs, Big Five Questions, Australia’s energy mix

E&OE

Laura Jayes, AM Agenda Host: Joining me now is the Chief Executive the Business Council of Australia, Bran Black. Bran, thanks so much for your time. There's a lot of nervousness, not only from investors but within the business community, as to what you know, a long-term tariff war where we're not directly involved, but certainly indirectly, would mean for our economy. So your reaction to this reprieve and perhaps the ongoing threat of tariffs?

Bran Black, Business Council Chief Executive: Thanks Laura, appreciate you having me on the show. I think there are a couple of different ways in which we need to look at what's happening in the United States right now in terms of tariffs, certainly from an Australian perspective.

The first is the risk of tariffs being applied to Australia or Australian goods and commodities. Now, as has been noted, that risk is low, but it's not a risk that we can treat as being non-existent. And it's pleasing to see, of course, that our leaders are not treating that risk as being non-existent.

We have many factors in our favour that would support an argument for no tariffs being applied to Australia. We have a deficit to the United States, in terms of a trade deficit, we've certainly got our AUKUS agreement, we're historical partners and so forth. But we do need to work on the basis that this is a transactional government that we're dealing with, and we need to be clear in terms of the benefits that Australia brings to the table. And I think that's what's happening, certainly from what we've seen.

The other dimension, of course, is what happens in terms of tariffs that are applied to other countries, for example, China. If tariffs are applied to Chinese goods and services, then the impact of that may be a reduction in demand for the commodities that constitute or make up those Chinese goods, and that in turn, might affect Australian exports, particularly in some sectors like mining.

So we need to be very cautious about that. And the underlying message that I have is that what this means is that we can only control the things that we can control, and that is our competitive settings and how we can try and attract investment to our shores. So that's what we should be getting on and doing.

Laura: So of your members, how many would be directly affected by tariffs in Mexico, Canada and China, and what kind of impact are they bracing for?

Bran: Well, it's still difficult to say at this point, and I do note, as you noted a little bit earlier, that there has been a reprieve with respect to the tariffs that have been imposed or were imposed on Mexico. But to reiterate that point, where our concern lies is that if there's a reduction in demand for, for example, Chinese products, that translates into a reduction in demand for Australian commodities, and that in turn, reduces job opportunities, particularly here at home.

We are, at the end of the day, a trading nation. One in four jobs in Australia is trade dependent. So for us, it is absolutely critical that we have free and open trade opportunity.

Laura: Okay, let's talk about more immediate concerns, and it is an election right around the corner. You're there in Parliament, question time today. I'm not sure how much is going to get done over this week or the next, but here we are anyway.

I’m sure you're in Canberra with a list of demands for both sides. What is at the top of your list for both the Opposition and the Government, and who do you think is best placed to get your to do list done?

Bran: Well, we hope that both sides take on the recommendations that we're putting forward, but what we're saying in our document, which we're calling the Big Five, is that there are key issues that are facing the country right now at the absolute top of the list is, how do we ease the cost of living. And how do we do that, well, the critical thing is to focus on productivity.

I know I talk about that a lot, but ultimately, it's productivity that underpins our capacity to drive real wages growth, and at the end of the day, that's what you get in your back pocket after you've paid for your mortgage, your rent, your school fees, your groceries, your petrol at the end of the week. So for us, it's productivity that matters.

That's why we want to see such a strong focus on what makes Australia competitive as a place to invest. That's deregulating, it's looking at our tax settings, it's looking at what we can do in order to improve our approval arrangements for example.

Laura: What about tax? Do you back the Coalition to have another look at what was going to be stage three tax cuts for high income earners, given that in stage one and two that really did look after low income?

Bran: What we've said, and we consistently make this point, is that we want to see a holistic examination of our tax system. We don't favor an ad hoc approach to looking at individual taxes or components of taxes. We think it's really important to be looking at our overall tax mix. And the reason why we say that is that the Intergenerational Report back in 2023 made it absolutely plain that on our present trajectory we will be leaving to future generations, our kids, a greater burden on the shoulders of a proportionally smaller working population.

We need to turn that around, and to do that, we need to start attracting investment. It goes back to that point I made before about being competitive. Tax is an integral part of that, but it's not just one or two taxes, it's the entire tax mix.

Laura: Bran, when you're looking at attracting investment, whether it's manufacturing or artificial intelligence or the things that we are traditionally good at, we are less competitive than we were a decade ago and at the center of that it's got to be the fact that there's been no bipartisanship on what our energy mix should look like.

Now we've got the most expensive energy in South East Asia. You have both major parties fighting over what the future energy mix is going to look like, and there has been an over reliance on getting green, rather than reliability and cost. What needs to change in that dynamic?

Bran: Well, I'd say a couple of key things, and I agree with the points that you've made. The critical thing is that we've got to try and deliver certainty to industry in terms of what that roadmap to 2050 looks like. We said, as I mentioned to you when we spoke last week, that we support and will continue to support Australia's ambitions of being net zero by 2050 but we have to do that affordably and reliably.

To do that, we need a proper pathway, and a critical point that we need to recognise right now is that we are facing shortfalls in supply, particularly with respect to gas. If we're talking about a renewable future, at least in the short to medium-term, we are going to also be needing much more gas in our system, so we've got to get on with the job. And the most critical question that we have right now is, how can we deliver more approvals, particularly with respect to gas, as quickly as possible.

Laura: I mean, who's going to invest in Australia when you have from time to time our political leaders on a hot day saying, “Please don't turn your dishwasher on in peak time, please turn the air conditioning down”. It's frankly embarrassing.

Bran: Look, I think that question who is going to invest in Australia is one that we should be asking ourselves every day. And the key reason why I say that is that it's a question that other countries ask themselves every day, and so they should. We should be remembering at all times that we are quite literally competing for investment. And I have seen, and I have heard in the time that I've been in this role, consistently the message is that Australia is a less competitive place to do business.

I mentioned the Intergenerational Report before. A big problem with that is that even if you assume that we're able to deliver on the trajectory that it noted, we are still leaving a poorer quality of life to our kids. If we want to improve the quality of life that we're leaving, we have to do much better than that and that means attracting investment. So the time is now. The obligation is on us. We must do more to be more competitive.

Laura: Yeah, well, we're in the election season now, so good luck with that. This is a good time to get your message heard.

I mean, four year terms would be better, which means that the governments of the day can govern for a little longer, but an argument for another day. Bran, thanks so much, we'll see you soon.

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