This address, by Business Council of Australia President Catherine Livingstone AO, was made at the BCA's 2015 Annual Dinner, held on 5 November in Sydney.
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Thank you Jennifer.
And thank you all for being here for the Business Council of Australia’s Annual Dinner for 2015.
A special thanks to Prime Minister Malcolm Turnbull for agreeing to attend as our guest of honour and keynote speaker, and to Lucy Turnbull, we are delighted you could both join us tonight.
Prime Minister, there is a new sense of optimism in this room, and around the country.
In just seven weeks in the role, the impact you have had on national sentiment is almost unparalleled.
You have given us the permission to have conversations about things that matter to people, and helped, through your own example, to make those conversations positive.
For some time now, the Business Council has been trying to start a conversation around fostering an innovation capable economy to drive the next decade of growth and job creation.
We now have permission to build on what we have been saying:
• about the impact of disruptive forces
• about keeping Australia competitive in a vastly more competitive global economy, and
• about the role of liveable cities, a topic on which Lucy Turnbull is an acknowledged leader.
There is also a new sentiment that leadership is a collective responsibility.
In this context, the National Reform Summit demonstrated a promising level of engagement, dialogue and agreement around fundamental national objectives and directions for change.
A number of the core participants in the Summit are here tonight, including Cassandra Goldie, Ged Kearney and Dave Oliver, as well as the editor of one of the two supporting newspapers, Michael Stutchbury from the Australian Financial Review.
In your first month in the role, Prime Minister, you brought the Summit participants back together to create momentum, specifically to build on areas of agreement, and to work through points of difference.
This early initiative has galvanised the positive sentiment.
An innovation economy
The most important outcome of the Summit, and our meeting with you, was the collective agreement amongst disparate groups around two things:
• one, that the central objective of the policy reform areas debated at the Summit is economic growth, and
• two, that the way to achieve that growth is through innovation.
Representatives of the community sector, the labour movement and business of all sizes jointly acknowledged that we will not be serving the interests of our diverse constituencies, if we don’t align our efforts to create an innovation capable economy.
However, it’s important we get the innovation conversation right.
We must move on from a fundamental misconception in Australia that ‘innovation policy’ is a somewhat standalone activity, or a government program, when the real task is to unlock the innovation capability of the whole economy by mobilising key elements such as:
• skills, physical infrastructure, and knowledge infrastructure; and
• by having regulation which enables and incentivises, trade agreements which underpin our participation in global supply chains, and a government acting as a demanding customer in its delivery of services.
Innovation isn’t a program that can be delivered. It’s the result of a thoughtfully designed system, that:
• supports individuals’ capacity to innovate, because ultimately it’s people who innovate, and
• encourages the demand for innovation through competition, and seeking solutions to problems, including problems at the national level.
It is a complex system, replete with interdependencies, unpredictability and deep long-term causal loops.
Prime Minister, you have significant experience in dealing with complex systems, whether it be the Murray Darling Basin or the National Broadband Network.
This experience gives you extraordinary credentials to use the government’s upcoming Innovation Statement to draw together the interdependencies, incentives and signals which characterise this system, and identify opportunities for better mobilising key elements.
You have already shone a light on one area of white space, the importance of mobilising entrepreneurship and start-up ventures. This is long overdue.
Of course, it is also essential that established businesses, large and small, continue to invest in innovation, and to recognise that not all of that innovation is technology based. Business systems and processes matter too.
This means taking account of what drives businesses to invest and innovate – including regulation, and, of course, the broader tax system, including the tax rate.
While absolutely recognising the critical importance of personal income tax reform, the experience of other countries has shown that nothing will stimulate innovation and growth more, than a reduction in the tax rate for all businesses, as part of a broader tax reform agenda.
The income tax rate really matters, whether personal or business.
If there is no growth dividend from tax reform it will be a missed opportunity. We run the risk of undertaking a tax mix change that simply underwrites increased spending.
This is not the path to sustained economic growth and prosperity.
Just as the company tax rate is essential in driving a more innovation capable economy, so too are specific tax measures such as employee share schemes, tax incentives for start-ups, and the continuity of the R&D tax incentives for businesses.
As a final comment on tax reform, I would like to thank the Prime Minister, the Treasurer, and South Australian Premier Jay Weatherill who, along with NSW Premier Mike Baird, are enabling the community to have a mature, informed conversation about the reform of a system that was built for a different era, and a different world.
Before introducing the Prime Minister, let me take a moment to thank some people.
Could I thank the BCA board and acknowledge two outstanding directors who retired from the Board today, Gail Kelly and Grant King, and to welcome our new directors, Alison Watkins and Ian Narev.
I would also like to thank Jennifer for another year of exceptional service to the BCA and to the nation.
Jennifer and her small team–and I emphasise small: that is fewer than 30 people, cover a daunting range of policy areas, adding fresh perspectives, finding new approaches to old debates, and literally sitting down with policy makers to work through the detail and implications of policy proposals.
Jennifer’s leadership of this team is extraordinary.
Introduction to the Prime Minister
It is now my great pleasure to introduce the Prime Minister.
Prime Minister, having worked closely with you, most recently in the communications portfolio, I have seen you operating with a blend of vision and pragmatism, a combination that can take this country forward and realise its potential, gradually and systematically, over what will be a 10-year period of transition.
Ladies and gentlemen, please join me now in welcoming the Prime Minister, Malcolm Turnbull to the stage.