This opinion article by Business Council chief executive Jennifer Westacott and Coca-Cola Amatil managing director and chair of the Economic Policy and Competitiveness Committee Alison Watkins was published in The Australian on 20 July 2020
As the country’s major employers, the priority for business is to help people back to work by creating new jobs in tandem with protecting the health and safety of the community.
Unprecedented levels of collaboration have marked the national response to the COVID-19 pandemic and ensuing economic fallout. The task of job creation, which is key to the recovery, will require a continuation of this cooperation but it also demands that we expunge the idea that business as usual will cut it.
To return living standards, wages and economic growth to an upward trajectory, businesses need to create as many as two million extra jobs to help those on JobSeeker find work as well as re-employ people currently on JobKeeper in companies that may need to restructure.
The ask is colossal. The rewards great. The last time Australia created two million new jobs it took almost 10 years. This time, business will need to achieve this task sooner while adjusting to a new abnormal.
The effects of disruption were evident before the pandemic. This is now accelerated.
The economic recovery task ahead of us is bigger than anything the nation has had to confront since the Second World War. So too are the opportunities.
But here’s the dilemma: our starting point was a period of stagnation in investment, productivity and wages growth.
So, how do we achieve the monumental task of creating about two million new jobs and dodging long periods of painful adjustment?
There is no silver bullet and we’ll need to do better than we did pre-COVID. As a nation we are up to the challenge.
More to the point, business is up to the challenge. It is business that will need to create the jobs and make the necessary investments. A strong business-led recovery is essential to securing the futures of all employees, customers, shareholders and suppliers.
We have cause for optimism. Business is ready to join with the community to make the most of the recovery. We are primed to capitalise on the possibilities it offers to ensure Australia is the best place to live, work, grow old and invest.
This starts with rebuilding confidence. To do so, we need to hold our nerve on opening up the economy with the right systems in place to manage and contain outbreaks. The alternative is job destruction.
We need to unleash the balance sheets of large and small companies by putting the incentives in place to encourage greater investment. For businesses, this is one of the most important factors in decisions about rehiring workers, creating jobs, buying machinery, adopting technology, expanding, training, and entering new markets.
We want companies confident to invest, not be risk-adverse and hoard cash. A broad-based investment allowance of 20 per cent for all businesses, covering all forms of investment, would kickstart business investment and have a multiplier effect through the economy when it is most needed. Let’s remember we are in a global competition for capital.
While businesses will do the heavy lifting in job creation, governments need to release activity through targeted spending such as bringing forward shovel ready infrastructure projects.
Fast-tracked and streamlined planning approvals, while still meeting community expectations and environmental standards, for major projects should complement this.
Other vital economic defibrillators include resisting the temptation to bring back the red tape and regulation we jettisoned as too burdensome during the pandemic. Let’s also go further in reducing unnecessary chokeholds that dampen activity.
Our focus remains on building a society for the future through a more responsive skills and training system that enables people to upskill rapidly to meet the demands of new jobs.
And we cannot miss the window on adapting now to fundamental structural change. This includes devising a roadmap to outline how we transition to a more carbon efficient economy and putting in place the policies to accelerate the necessary shift to a digital economy.
In embracing the changes necessary for recovery, our central economic tenets should guide us.
When safe to do so, we need to return to normal migration levels. Skilled migration is a job creator, not a job stealer.
Taxing our way out of this crisis is not a solution. Guardrails such as tax to GDP rules matter because the alternative is runaway taxation and spending for another generation to shoulder.
We need to keep pressing for a competitive tax system that can deliver sustainable revenues.
And we must ensure Australia remains open to trade and investment. Retreating within the walls of Fortress Australia would be self-defeating.
Now is not the time for radical or knee-jerk policies.
But it is the moment to seize a once in a generation opportunity for comprehensive nation building reform, drawing on the actions we have all known for a decade will make a difference.
Nips and tucks will not create two million new jobs, nor help the economy regain its footing.
Australia went into COVID-19 in a better position than most nations.
We started with a strong balance sheet that we now need to put to work.
We started with an incredibly cohesive society which we will continue to call on to see us through these challenges.
We started with strong institutions which now must focus on the reform task.
When it comes to mounting a sustainable and swift recovery, we cannot lose our way. To do so would mean our hard-won gains will have been for nothing. It is up to us to stay the course.
Jennifer Westacott AO is the Chief Executive of the Business Council of Australia.
Alison Watkins is Group Managing Director of Coca-Cola Amatil, a Business Council board member and chair of the BCA’s Economic Policy and Competitiveness Committee