Event: BCA Chief Executive Bran Black interview with interview with Ross Greenwood, Business Weekend, Sky News

Speakers: Business Weekend, Host Ross Greenwood; Business Council of Australia Chief Executive Bran Black

Date: 30 March 2025

Topics: Federal Election, supermarkets, productivity, business investment

E&OE

Ross Greenwood, Business Weekend Host: Bran Black is the Chief Executive of the Business Council of Australia, which represents our biggest 100 companies, joins me now. Bran, many thanks for your time. The Government, Coalition, they're both sending out very anti-business messages to my mind.

Bran Black, Business Council Chief Executive: Well, I think if you look at the messages that you've just heard in terms of supermarkets, that is something that is deeply concerning to us. There is a body of evidence now, that's come about in the last two weeks that says very clearly that there is no evidence of price gouging, and yet we're still seeing these types of policies move forward from both parties.

What is clear is that both supermarkets have had profit margins in the order of about $2.50 to $2.70 for the course of the last five years. Inflation has put pressure on prices, that's the core concern here. What we need to focus on both sides of politics is how we can put pressure downwards on inflation and how we can put pressure upwards on productivity.

Ross: Isn't this blame-shifting by the Prime Minister?

Bran: Well, I think it's very clear from the ACCC report that there is no price gouging. It goes back to the point that I was just making.

Ross: So, it is blame-shifting then?

Bran: Well, we are concerned that there is a focus on trying to address a problem that doesn't appear to exist.

Ross: Okay, so isn't the real problem that the Government itself has gouged people's incomes, as we can see, by taking on average, $3,500 out of people's pockets by its bracket creep, increasing them into higher tax brackets.

Wouldn't a better strategy if you wanted to take pressure off cost of living, not just handing out a small $5 a week tax cut in two years time, but by actually indexing, as some politicians have claimed, those brackets to make certain that people don't get actually into those bracket creep problems.

Bran: Well, we certainly support indexation, but I think the key point that I'd make in terms of what you've just said is that we have seen that real wages growth has declined over the course of the last two years. People are feeling pressure right now, and that's, of course, fuelling this discussion around, ideas around supermarket divestiture and so forth.

People are feeling pressure because their real wages have declined, but the answer to that is focusing in on reducing government spending and therefore putting that downward pressure on inflation and increasing our focus on productivity. Those are the measures that you and I have discussed on previous occasions around industrial relations, how we can grow the size of the pie with policies around taxation, around improving approval times and so forth.

Ross: Okay, so you saw the Budget this week, you saw the expectations of business investment growing quickly to basically get economic growth in Australia going again. I would make the observation that that is heroic, those forecasts, because right now, business does not have confidence to invest, does not think there's actually a dollar at the end of it, if it does invest and even then, business is worried that government may intervene and try and take some of it off them.

Bran: Look, I'd make two points in that regard. The first one is, I think the key statistic that I point to, and I do acknowledge there is some increase in business investment, and that is a good thing, but it's not enough, that's the core challenge that we have.

The critical figure is our productivity growth figure, and I heard what Warren (Hogan) had to say a little bit before I would back that in. Our productivity is sitting at negative 1.2 per cent over the course of the last 12 months. That's against the long-run average that is assumed for the purposes of the intergenerational report, of 1.2 per cent, so there's a 2.4 per cent difference between what's assumed and what's being delivered. It is heroic to say that we can deliver that type of growth.

Ross: But to improve productivity, and therefore to improve the outcomes for families, prosperity in Australia, for businesses and for families you need bold politicians, you need brave politicians to put it out there and to explain it to people. I don't see that.

Bran: Well, I think what we are seeing, which is very clear, is that there are other countries that are intensely focused on trying to be more competitive. We're seeing what's coming out of Canada right now, we've seen what's come out of the UK, or what is starting to emerge there as well and of course, in the United States, the President's announced a series of different policies now, some we would support and some that we've got concerns with - what is clear is that he's very much focused on trying to win investment. And I was in Washington just last year, and what was very clear in the conversations that I had with members of the Republican Party who were coming into the administration, but also with business groups and business leaders, is that they were excited by the prospect of a genuine deregulation agenda.

Ross: Okay, but here in Australia, though, you've got quite the opposite, you've got an energy policy, you've got a tax policy, you've got an industrial relations policy that you and I both know is driving investment from big companies to America out of Australia. Australia is not keeping up from a competition point of view. Would a tax cut for businesses across the line, would that be the first start you think, to try and improve not just productivity but competitiveness in this country?

Bran: We've always said that it is important to look at tax cuts, and if you look at our company tax rate, we are internationally uncompetitive. Look at the OECD, we are the third least competitive company tax rate in the OECD. We are ahead of Portugal, and we are ahead of Colombia. Every other country in the OECD has recognised that they grow the size of their pie by making it easier for businesses to invest. We haven't done that.

Ross: So, if you grow the size of the pie, you create more jobs, the government gets more money, and it opens up the prospect for it to be able to cut taxes and take a bit of the cost-of-living pressure off ordinary families as well. Why do politicians not understand this, because it's too difficult to go out and say, we're going to give big business a tax cut.

Bran: It is difficult, but I think one of the great challenges that we've got in Australia at the moment is that we are being complacent. We are assuming that, because we've had a quality of life historically, that will continue. I know that it's often useful to …

Ross: Well, we get lucky, because China basically demands our minerals, but you can't necessarily presume that for the future.

Bran: Indeed.

Ross: That’s no way to run a country.

Bran: I think people assume that past performance is always the best indicator of future performance. That is generally the case, but in terms of our own economic potential, it's clearly not. We have a demographic problem again, you and I have spoken about that previously. We will have fewer taxpayers in the market paying for a proportionately older share of the population.

Ross: So therefore, if you want cheaper medicines, as they're all promising, if you want, say for example, more bulk billing and more free visits to the doctors, you've got to have somebody paying for that.

Bran: That's right.

Ross: You can't just borrow it forever.

Bran: That's right, you've got to have people who are able to pay for it, you've got to have a tax base. And what we would say is, let's grow the size of the pie by encouraging investment into the country, getting that investment, securing the jobs, securing the taxes that come as a consequence of that, because that is ultimately how we're able to guarantee that the prosperity that we're fortunate enough to enjoy today is prosperity that our kids can enjoy tomorrow.

Ross: It's going to be fascinating just to see exactly how this plays out, whether any of our political leaders are brave enough to come out with that type of a message, because that's the thing that drives prosperity and productivity into the future. But at the moment, you just don't get it from either political side. Bran Black, always great to chat to you, many thanks for your time.

Bran: Thanks so much for having me.