Jennifer Westacott panel discussion with Fran Kelly, RN Breakfast

13 May 2020

Event: Business Council chief executive Jennifer Westacott panel discussion with Fran Kelly, RN Breakfast

Speakers: Fran Kelly, host RN Breakfast; Jennifer Westacott, chief executive of the Business Council of Australia; Michele O’Neil, president of the Australian Council of Trade Unions; Cassandra Goldie, chief executive of the Australian Council of Social Service

Topics: COVID 19 response; JobSeeker payment


Fran Kelly, host RN Breakfast: Well we were supposed to be back in the black, remember that? Instead, Australia is on track for a massive budget black hole thanks to the coronavirus pandemic. Yesterday the Treasurer Josh Frydenberg told parliament the budget deficit has already hit $22.4 billion at the end of March. That's almost $10 billion worse than forecast pre-pandemic days back in December. To get us out of this hole, the Treasurer is pinning his hopes on tax and industrial relations reform, a hundred billion dollar infrastructure pipeline and cutting red tape. Also, pinning his hopes on business. To discuss the road back, which we really didn't get a picture of from the government yesterday, I'm joined now by Cassandra Goldie who is chief executive of the Australian Council of Social Services, Jennifer Westacott chief executive of the Business Council of Australia and Michele O'Neil who is president of the ACTU. Welcome back to breakfast all of you. Let me ask each of you after listening to the Treasurer yesterday and not a lot of new information, not a big economic plan for the post-COVID economy, but some pretty negative numbers on investment and consumption. I want to ask each of you, what did you take from the picture painted by the Treasurer yesterday and did it prompt one big idea from each of you for the government to plot a way out of this. Jennifer let me start with you.

Jennifer Westacott, chief executive Business Council of Australia: Well there's some pretty sobering numbers that the Treasurer gave yesterday and fundamentally I think we've all got to come back to basics here. This is about people's lives and so what we have to do as the kind of leadership dynamic is to focus on getting people back to work and getting them into secure and meaningful work. So every decision, every action has got to be focused around will this get a business open, will this get someone back to work, will this create a new job, will this give people the skills to get a new job? So my big idea, I think the skills system has to come into very sharp focus because it's been wanting for a long time, it takes too long to get qualifications, too long to get skilled up. So that's one of the things I'd like to see put absolutely at the top of the list.

Fran: Okay, I'm going to come back to how that might happen given the impact on the budget from all of this. But first let me go to Michele O'Neil.

Michele O'Neil, president Australian Council of Trade Unions: Fran we were concerned that the Treasurer yesterday really didn't outline any plans for jobs and the economy coming out of this. It's so critical that we have a plan that focuses on the creation of new, permanent jobs. We're calling for two million new permanent jobs to be created and also a halving of the number of insecure jobs in Australia. And that's because we went into this crisis with some pretty serious fault lines in our economy and labour market. We've got the third-highest rate of insecure work in the OECD and we saw the impact of that where so many people were let go fast once we were in the pandemic. So when we rebuild we've got to rebuild in a way that's actually different to where we were before. You can't just sit back and let the market prevail. We need intervention in the market to make sure that new jobs are created, that are secure jobs that workers can rely on, and that we end up with a fairer and better society and economy at the other end of this.

Fran: Alright and Cassandra, what struck you as you listened to the Treasurer? And your one big idea in the wake of it?

Cassandra Goldie, chief executive Australian Council of Social Service: Well the first thing is that many people are still very worried about the health risks Fran. I wouldn't underestimate how many people are frightened today with all the talk about us getting back to some kind of normal. There are people who are still seriously at risk in terms of their health and the impact of this virus. So we have to focus on safety and go carefully. I think the other thing is the Treasurer says he wants to build confidence and we know that when you are very vulnerable, when you're on a low income, when you've lost your job, what does confidence look like? Well, the big idea is to secure the social protections for the country. We've got to protect people from poverty. That doubling of the JobSeeker payment was absolutely the right thing to do. I mean how many times have we all on this call talked about the need to fix that $40 a day Newstart? But that confidence that in the uncertainty. We all must focus on jobs opening up but when, how, what they're going to look like are uncertain and so knowing the government has got your back for the long haul is really crucial at the moment.

Fran: Okay let's just stay with that for a moment. JobSeeker, as you say everybody on this panel, on this program, has called for a rise in the Newstart payment. For some years now, governments on both sides have failed to act. Cassandra, do you think it will be different this time? I know you hope it will but it's pretty clear the government's not going to maintain the doubling of Newstart. The JobSeeker is currently at $565 a week with the coronavirus supplement. It won't stay at that but do believe the government is considering increasing Newstart now in the wake of this?

Cassandra: Well if the government sticks with what it seems to have done very well on the health front; which is to listen to evidence, to listen to the scientists, to listen to the research, they will absolutely fix the adequacy of social security. That payment level needs to be fixed above the poverty line. For a single person that's about $500 per week. And what we know, those payments, the increase has just started to get into people's hands. Let's remember that, it's only been a couple of weeks since people have started to get that relief. They are spending it Fran, they're spending it on essentials, they're spending it on good things that need to be done. You know, the first pair of shoes in a very long time. That kind of thing. Well, that's what the economy needs as well. And that's why people like the Chris Richardson's of the world have been calling for fixing that for a very long time as well. So I think as politics comes back, we all saw it yesterday, there is a moment here for people such as ourselves to say, ‘what is the common ground here we're confident it will deliver?’ It will deliver the kind of protections for people. And then we get into what do we need to invest in to open up job opportunities? Because that also will help people to know there is a...we're not going to go into old tribal war. We are going to focus on good investments that guaranteed are going to deliver jobs. That's what we need to be working on as well.

Fran: Okay we'll come to tribal wars and jobs in a moment. But Jennifer just on that payment, you're talking to government all the time. I know no one probably knows the answer yet but do you believe the government is considering lifting Newstart in the wake of this? Even though it's adamant it won't keep that coronavirus supplement in total?

Jennifer: Look I simply don't know the answer to that Fran, because I think nobody knows the answer that. I think we're in such a fast-moving world. There's no doubt that payment is too low. I've been saying that for years. The question is what do you move it to? Do you move it Cassandra's suggestion of $75 a week extra?

Fran: Well actually Cassandra says it takes $500 week really to get above the poverty line.

Cassandra: We have to fix that level.

Jennifer: What level you set it at I think is the debate to have. But we also have to make sure that we don't just increase the allowance, we get the system working properly. And Cassandra and I have talked about this many times. We've got to get people back to work. We've got to make sure that people don't slip into long-term unemployment. We've got to make sure that the system moves to a demand-led system where people can see the jobs. And we make sure that we've got much better programs around skills and supporting people to get back into work, to stay in work. So it's a whole system thing, not just the allowance...

Fran: Of course.

Jennifer: ...which I have, as Cassandra knows, been a long-term supporter of increasing the Newstart allowance.

Fran: No most people would prefer a job to an allowance. No doubt about that.

Jennifer: That's absolutely right Fran. People don't want to be on welfare, and we've got to remember that many people, even though the allowance has been doubled, they've lost quite a lot of money. So they'll want to be getting back to work and it's absolutely essential we get them back to work.

Fran: Just on that, let me stay with you for a moment. Michele, I'll come back to you in a second. But Josh Frydenberg said yesterday, 850,000 Australians should be back at work by July if all goes to plan. Is that too optimistic in your view? I mean that's a lot of jobs to be springing back.

Jennifer: It's a lot of jobs but, you know, I think if you look through those stage one, two and three of lifting the restrictions, I mean that's the modelling the government is relying on. And obviously that will depend, to Cassandra's point, on making sure that the health outcomes are achieved and we step backwards.

Fran: Of course.

Jennifer: But I really hope that's where we get to because we cannot afford to have this many people unemployed for longer. We have to make sure that focus is on getting people back to work and getting them back, I agree with Michele, getting them back into secure work, getting them back into meaningful work, getting them back into paid work.

Fran: I wanted to ask you specifically about that. Michele's big idea and the ACTU's big idea is two million new, permanent jobs created. I mean has this pandemic, as the ACTU has highlighted, put the spotlight on too much casualisation of the workforce, too many people depending on temporary jobs, part-time jobs, not having secure permanent employment. Are employers open to changing that?

Jennifer: Look I think absolutely. No one wants to come out of this with insecure work. No one wants to...

Fran: But they went into it with insecure work.

Jennifer: Well if you take the data without getting into a technical discussion, the Productivity Commission says that the casual workforce hasn't changed for 20 years. But that's not the point Fran. The point is that many of the people that have been hardest hit are in casual work. Many of the people who are in hardest hit are in those jobs that are less secure. So I totally agree with Michele, let's try and come out of this with secure work and with meaningful work. But you can't do that without secure businesses, growing businesses, successful businesses. So we've got to work in tandem. You can't get people back to work if businesses don't get back on their feet and they don't get back on their feet in a permanent way.

Fran: Okay, Michele O'Neil, we're hearing the spirit of cooperation there again from Jennifer Westacott. The Treasurer didn't lay out a specific plan but he certainly said the path to the post-pandemic recovery is tax and IR reform. What do you think is on the table? And is the union movement prepared to be more flexible perhaps coming out of this pandemic than you were going into it? In terms of enterprise agreements, simplifying the awards system, those kind of ideas that are definitely being spoken about?

Michele: Well Fran I mean firstly I want to say that comment of Jennifer's about the importance of creating secure jobs is a really important comment. And I appreciate the support of the BCA for that. Because when we talk about insecure work, we're not just talking about casual workers. We're talking about gig workers, labour-hire workers, people on rolling contracts. There's so much insecurity in the system. But I've got to say that I think what we've seen in this is an extraordinary amount of so-called flexibility that workers have been giving, much to their detriment in many cases. Because it has been that when workers have been in jobs which have been, from the employer perspective, extraordinarily flexible where the worker doesn't know if they're going to have the next shift. They don't know how many hours they're going to work each week. They consequently don't know what they're going to earn day to day, month to month, year to year. That's caused some of the underlying problems in our economy. Because as well as insecure work, remember before the virus, we had seven years of stagnant wages. So seven years without real wage increases. Which of course was adding to the underlying problem with domestic spending that we've got to address. So the government can't just sit back and turn back the clock really. Which is what I hear Josh Frydenberg saying. It's like, 'well let's drag out from the bottom drawer those old ideas'. The old ideas are not going to cut it. We need aggressive stimulus. We need intervention that's actually going to make sure that we can support jobs in for example, the public sector and the community and health sector. We've seen the difficulties not just from the coronavirus but also from the bushfires where we didn't have in place what was needed as far as the support for our health, for our communities, for the recovery. We also need to think about the crisis of climate change and how we invest for example in electricity transmission upgrades. This is an opportunity to do things differently. Not the same way as they were done before.

Fran: Okay we're going to run out of time here rapidly. But just in terms of Michele's point of dragging out the old ideas. I mean the Prime Minister says they're not going to do that. He said specifically that the way out of this and the Treasurer made this point too, is got to be business-led. The Prime Minister said theirs are the shoulders that Australians will stand on. These businesses that will provide the employment and provide the opportunity. I mean Jennifer Westacott, do you see that the ball is in businesses' court? But also the government will look favourably now on things like tax cuts and will you be using this kind of opportunity to push further for more flexibility on IR, tax cuts, company tax cuts, things like that?

Jennifer: Well there's a lot in that question Fran in a short time. Look I don't think the Treasurer was harking back to the old. I think he was simply stating the obvious which is business has got to lead the way out of this. Because it's business that employs 11 million people. And I think it's business that have done a lot of the heavy lifting in this crisis. Whether it's ResMed and GE who've converted those machines to ventilators, whether it's the banks who've extended those loans, whether it's the supermarkets who've put food on our shelves, whether it's Bunnings who've kept people able to do a lot of activities.

Fran: Well it's Australians really isn't it? It's Australians who have responded.

Jennifer: Of course it is. But that's who business is Fran. I think if we're going to start this reform agenda and start working cooperatively we've got to remember two things. That business is people, it's 11 million Australians, and it is absolutely essential to get the country back going again. And we've got to remember who we are doing this for. We are doing it for the kid who doesn't think they're going to get a job, the older person that thinks they'll never get a job again, and the business who thinks it can't get up and running again. If we can all remember those two things we might get something done.

Fran: Just very quickly because I'm going to be in trouble with time here. I'm just going to hold you up there. Just on your idea of skills Jennifer, I promised you we'd come back to it. I mean that's going to take a major investment from government and yet the Prime Minister is talking about business leading this. The Treasurer is making the point there's no more money on the tree basically. Does government need to acknowledge it's going to have to invest, and that's going to be a major investment, on skills? It's going to cost a lot of money.

Jennifer: We'll have to make some investment but there's a lot money already in there Fran. We just don't spend it as well as we could. I mean there's $20 billion in that kind of post-secondary system. My view is that we've got to make courses shorter, we've got to give people like a skills account so they can show that they've upgraded their skills. We've got to make it easier for people to quickly upgrade their skills. They can't go back and do a computer science degree. They can't go back and do an undergraduate degree. That's my objective. Get people skilled faster.

Fran: And Cassandra just very briefly from you, a response to that. Skills, is that going to help the sector you represent to give them a better chance to get onto the ladder essentially?

Cassandra: Well yes of course. I mean look we've got a highlight but let's remember that essential services, community services, social services have been at the frontline during this crisis and I think this notion that it's only about business or it's only about us that's going to lead the way. We've all got to lead this together.

Jennifer: Sure absolutely.

Cassandra: And so it's so crucial that we make sure that we're investing in those kind of services. They're all good jobs, they should be decent jobs, we should be protecting people in those jobs as best we can. It's so crucial that we also acknowledge that if we're going to do anything, we're going to spend money now, we've got to be confident that it's going to deliver. So why don't we all swing behind investing in something like housing construction. Gee have we ever all been confronted by the terrible situation if you don't actually have a home to stay in? Now that could be something that we all could get behind. It would be great jobs and you know Michele, Jennifer, in terms of investment, social housing, government has got to play its role. And so it's those kind of things rather than going back, as I say, to things like IR, tax. Well, what do we really mean there? Let's focus now on things where we all know it's going to deliver great jobs and as soon as we can.

Fran: Sounds like the topic for our next discussion. Cassandra Goldie, Jennifer Westacott, Michele O'Neil, thank you so much for joining us.

Jennifer: Thanks very much.

Michele: Thanks Fran.

Cassandra: Thank you.


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