Event: Jennifer Westacott interview with Deborah Knight, Afternoons, 2GB

Speaker: Deborah Knight, host; Jennifer Westacott, Business Council chief executive

Date: 7 September 2020

Topics: Victorian COVID-19 restrictions; BCA Budget Submission; investment allowance

E&OE

Deborah Knight, host Afternoons: Jennifer Westacott is from the Business Council of Australia. She's on the line for us now. Jennifer, thanks for joining us.

Jennifer Westacott, chief executive Business Council of Australia: You're welcome.

Deborah: What do you think about this road map? Is it fair enough that Victoria is saying that they will bring about these changes if they can have low numbers? Or is the road map actually leading them down to a really big problem for the entire economy?

Jennifer: Well I'm really worried about where we've ended up with this. Look there are some good things that they announced yesterday but we are a long, long, long way from where we need to be. And that means more job losses, it means business will fail, it will mean some businesses leave Victoria. And we want to work constructively with them. Because obviously nobody wants a third wave. But we want to work with them to say well why is it that a business that's got a COVIDSafe plan can't open where they haven't got any transmission? Why is it that a region that has got zero cases, that hasn't had any cases, why can't they go to a more comprehensive opening? How do we get more predictability in this? Because what I'm worried about Deb is that people have got to start thinking, particularly small business about Christmas, if you were running a small business today how would you do your Christmas ordering?

Deborah: Yeah.

Jennifer: And we've really got to look at the nation's plan. Look at states like New South Wales where they've been doing local containment. Really effective tracking and tracing. They have got 314,000 jobs that were gone in the first lockdown, those jobs are back. And we have got to find a better way of carefully, gradually, but predictably and certainly more urgently I'll be honest, opening the Victorian economy up.

Deborah: Have they been even talking to groups like yours, Jennifer? Because I know that the head of Wesfarmers Rob Scott has been really critical of the Victorian Premier's lack of consultation. Have they been picking up the phone and getting your advice?

Jennifer: Look they've been picking up the phone and telling us where they're at.

Deborah: But getting your advice though. I mean surely seeking your input?

Jennifer: And look I agree with you about this. I think they could have worked a lot more constructively. Because everybody wants this to work. Nobody wants a third wave. Nobody wants people to get sick. But businesses would have a lot of expertise about well could we play a stronger role for example in tracking and tracing and testing? Could we, you know, look we've got some of the most digital companies in the world, could we be more helpful? There were some things like remember they talked about having tradies on a particular site for six weeks which anyone who works with tradies knows that's not how it works. They did change that. But things like civil works, where you're talking about hectares not square metres. That's something we've been asking them to change and they haven't. Things like asking the two big supermarkets which employ over a hundred thousand Victorians to reduce their workers by 30 per cent. That's a lot in just a few days. So the consultation hasn't been good enough. It has to get much better. Because we want to work constructively to get the state open again and get it open safely.

Deborah: You think you would want all the help you could get frankly in the middle of a pandemic in the light of what they’re facing?

Jennifer: There are some very expert people around those businesses who understand supply chains, who've got fabulous digital capability. Let's work as one Australia and get this fixed.

Deborah: The other big thing is the inconsistency between the states and territories, and the lack of common sense which I've been highlighting on this show. But in terms of the domestic borders reopening, they've got to get on the same page here.

Jennifer: Absolutely. Look national cabinet on Friday, a light at the end of the tunnel, the Prime Minister saying, ‘I don't need everybody to agree but I need enough people to agree to get cracking.' That was a really good thing. But to your point, why are there different permitting arrangements? Why are there different rules? I'm just hearing story after story after story from farmers who can't get to their livestock, people who can't move their heavy machinery, people who've got a permit but get held up and lose a lot time.

Deborah: And a lot of these areas, they don't have any COVID.

Jennifer: Correct. Exactly. And this is my point about Victoria as well. Why are regions that have not had cases, have never had cases, why can't they open up more quickly? So you're absolutely right. So, what was good at national cabinet on Friday, which is what we called for in our budget submission, is a three-month plan to open our domestic borders. Now obviously not all of the states have agreed to that. But as you know and as you have been saying, we run a services economy. An economy that is overwhelming about hospitality, tourism, retail. And those things are being really hurt by these really artificial borders closures. Versus what we know is working in New South Wales. A really, really effective local containment.

Deborah: Now you mentioned the pre-budget submission that the Business Council's put forward and the budget will be handed down in a month's time now. What needs to happen between now and October 6 for the economy, the Australian economy, to get back off its knees? Because we're officially in recession, we know how bad it is.

Jennifer: Well we are in a bad place and I think people have got to understand how bad it is. We've got a million people who are out of work. We've got our economy having the biggest drop in a hundred years, in fact since records began as I understand it. We're in a very, very difficult situation. So what have we got to do? Well, first of all, we do have to open up our borders and get local containment working better and try and live side by side with this. Obviously keeping people safe. Because if we don't do that we can't get activity going. Secondly, we've got to turbo-charge business investment which has been in freefall. What do I mean by that? People putting on new plant and equipment. That creates a work order for someone. People getting their online systems working better. People doing extra training for their staff. People expanding what they're doing. People doing their maintenance ahead of schedule. People opening or bringing forward their capital programs like say a supermarket or something where a thousand people would be involved in construction and then two or three hundred people working at it. So we're calling for a 20 per cent investment allowance, a bonus deduction, to ramp up that investment. That will create in our view 500,000 jobs and the maths that is really important here. But I think it's really important here Deb for $10 billion a year for that investment allowance. It's $10 billion to go forward, or $12 billion a month, which is what we're spending on JobKeeper, to stay as we are. Other things we're calling for is state and federal governments to continue to stimulate. But really good infrastructure projects, some tax relief, getting rid of all that red tape, getting our digital systems up and running. We've done pretty well but small business needs a real ramp up on digital and governments are going to have to help them. We've got to sort out our energy stuff because if we have lower prices that's crucial to recovery. So let's invest in those projects that are going to lower prices and get our emissions down. And we've got a big focus Deb in our submission about regional Australia. I think regional Australia is one of the most untapped resources that could get the country going. It's about prioritising...

Deborah: Well we can't travel around so we may as well travel to our regions.

Jennifer: Exactly. But also we've got places that I've been visiting for the past 12 months, you just think, 'boy if this thing could get going, the country would really get going.'

Deborah: Yep. And what about the businesses too with their bank loans? Because I know they're approaching the end of that six-month deferral period. Some businesses, they're back up and running but a lot of them aren't. In terms of the extension, is that the right way to go?

Jennifer: Yeah look the banks have got a plan to manage that and I think they've been fantastic through this whole process. And they've been very responsive to their customers. And they'll be sitting down and contacting people with deferrals and people who are able to recommence they'll be negotiating that and then they'll be negotiating ways forward for people who can't. But I think the banks have been really magnificent throughout this crisis and they've shown willingness to work with their customers to make sure people can stay in business. That people can stay in their homes. I think we should be really proud of our banks actually.

Deborah: Yeah well let's hope that there's more consultation taking place because it seems like it's not happening in Victoria at least. Jennifer thanks for joining us.

Jennifer: Thanks so much, you're welcome.