Event: Bran Black interview with Ross Greenwood, Business Now, Sky News
Speakers: Ross Greenwood, host, Business Now; Bran Black, chief executive, Business Council of Australia
Topics: Industrial relations; inflation; interest rates; trade; China; United States of America

E&OE

Ross Greenwood, host, Business Now: Bran Black, the recently appointed chief executive of the Business Council of Australia is a lifesaver. His local club is Manly in Sydney. The bigger question right now in his new role is whether he can save business from onerous changes to industrial relations policy being imposed by the Minister Tony Burke. Burke is seeking to soften some changes, but companies say it goes nowhere near far enough. Bran Black until now has done no broadcast interviews, he joins me now. Bran many thanks for your time. Here's the big thing that Tony Burke has managed to unite business groups in ways that no other Minister has ever been able to around this industrial relation law change. Can you change the government's mind?

Bran Black, chief executive, Business Council of Australia: Well, we certainly hope so and let me say thank you, it's great to be on the show. Our position with respect to the industrial relations laws has been very clear right from the start, they add cost, they add uncertainty, and that just comes at a time and Australians can least afford it. What that means is it's bad for businesses, and it's bad for jobs. We've seen in the last week that there has been some change from the government. They've looked to try and make some amendments, certainly with respect to casuals, but our position is it just doesn't go far enough. The law is still bad and we're saying collectively as business groups right across Australia, that the reforms need to be taken off the table.

Ross: So, the Reserve Bank now says a lack of productivity growth in Australia is adding to inflation and therefore keeping interest rates higher than they otherwise would be. Do the industrial relations changes proposed by Tony Burke add to inflation and add therefore to the pressure on interest rates to rise?

Bran: We're concerned that the changes will add to the costs fundamentally, that are being faced, being borne by Australian households and Australian businesses. What we're going to see with these reforms is increased compliance cost. That's increased uncertainly that translates into more money that gets spent on what they need to know in order to comply, but also the changes they need to make in terms of how they run their businesses. That's going to add cost and tracks through into how much money we spend day to day.

Ross: But it can’t improve productivity surely?

Bran: No, it can't. These reforms don't improve productivity, our concern is that they'll do the exact opposite.

Ross: Okay, so if you don't improve productivity, you add to inflation. If you add to inflation, you keep pressure on the Reserve Bank to keep interest rates higher? Bottom line.

Bran: Indeed

Ross: Okay, so therefore as a result why doesn't the Treasurer, why doesn't the Prime Minister see this argument that you're putting to them? Why are they persisting with these IR changes?

Bran: Well, that's a matter for them. But what we can do is advocate as strongly as possible, behind closed doors, but also through the media and in every way that we can, to really make the case that these reforms come at the wrong time for Australia. They’re bad reforms at any time, but particularly now when Australians are facing cost of living pressures day to day, and we know that they're increasing. We also know that there is the risk that they'll increase even further with interest rate rises. Now is not the time to be going down this path and we strongly urge the government to think again.

Ross: Okay, but as part of business delegations to the United States you've spent time with the Prime Minister recently. You're on a new visit to China very shortly with the Prime Minister where he'll see the Chinese Premier Xi Jinping. So, you know, again, is the message getting through that while there is all this international policy, right here at home there are some very big issues that need to be decided now, that may affect the outcomes of many businesses, whether they survive or whether they don’t?

Bran: We think it's important to make the case, of course, with respect to domestic issues, industrial relations, and of course, the broader productivity narrative and the agenda that we've been pursuing. We'll continue to do that. But by the same token, it's also important to do that important work in relation to visits overseas, because it's those business-to-business dialogues that we've been able to strengthen and establish on trips like the trip to the United States and the visit that's forthcoming to China. Where you've got the chance, as I say, to strengthen those relationships, establish new ones and in doing that, make a tangible difference back home with more jobs and more opportunity for Australians.

Ross: So, is the Prime Minister trying to basically dance on a razor blade in his relationships? With on one hand the United States, trying to be a very strong ally of the United States, while trying to reopen relationships with China. Isn't that a very difficult balancing act to make right now?

Bran: Well, from a business-to-business perspective, we think both relationships are extremely important. So, on the one hand with the United States, you've got the largest source of, and destination for, foreign direct investment. On the other hand, with China, you've got our single largest trading partner. With the United States they are our greatest ally, our greatest friend and they have been for decades and with China we've got a decades long relationship again at that business-to-business level.

Ross: Okay, but then with China you've got one of the great geopolitical threats as well, given what's happening in the South China Sea with our trade routes. With potential spying which has been alleged by our spy agencies. These are all important aspects to recognise and understand when you're dealing with China which can take punitive action against Australia when it suits their purposes?

Bran: What we see from a business-to-business perspective is the opportunity to engage in a way that helps Australians on the ground. So, we see that there are opportunities for Australians for jobs. You've got to remember, of course, that one in five Australian jobs is trade related and one in four regional Australian jobs is trade related. So, for us, there's this great opportunity to strengthen but also to establish new opportunities, new relationships, and that's where business comes in. Ultimately, we want to see Australia prosper. We are a nation that to a very significant degree relies on trade and relies on direct investment. So, from a business perspective, it's important that we lock in those relationships and do what we can to improve them.

Ross: So, you’ve worked at a very senior level in politics, you've worked at a very senior level inside our universities as well. From both those points of view you can see that that relationship with China commercially is very important, but politically can be potentially treacherous?

Bran: From our perspective, the important thing to focus on for the Business Council of Australia and for other business groups, is making sure that those relationships that have a business-to-business level are as firm as possible so that we can bring that prosperity back home in a way that all Australians can enjoy it. At the end of the day, it's about more jobs, more opportunity and for us, it's what we can do to create that back home.

Ross: So, Bran, just a simple one here, coming into this job are you an optimist for Australia?

Bran: I'm always an optimist. I'm always an optimist in life, but I think Australia has enormous opportunities. We have enormous challenges as well. But we have a fundamental opportunity right now to take important steps towards a broader, bigger and bolder productivity narrative. For me coming into this role a major priority is seeing what we can do to work with the government and to work with other stakeholders to drive that narrative as firmly as we can.

Ross: Those lifesaving skills might come in handy. Bran Black, thanks for your time.

Bran: We will see how we go. Thanks so much.