Event Interview with Ryk Goddard, Breakfast, ABC Radio Hobart
Speaker Jennifer Westacott, Ryk Goddard
Date 14 February 2019
Topics Strong Australia, Tasmanian economy, big and small business
Ryk: Jennifer Westcott is CEO of the Business Council of Australia, now their remit is large businesses of sort of 250 million bucks turnover or more. Hello Jennifer.
Jennifer: Good morning, how are you?
Ryk: Hi. I don't think we've got many of those in Tassie have we? The government, UTas?
Jennifer: Yeah, I mean that's an issue and that's one of the things we're here to talk to people about. I mean you've got a lot of small businesses and the economy is going pretty well. It's growing faster than the Australian economy. But you know, it's interesting when I talked to people in the chamber, when I talk to small businesses, they all say we still need some big businesses here. That big investment that drives a whole lot of other investment. But you know, we're here today to listen to people. What's going to keep the state stronger? What's going to make it grow faster? What sorts of things can be done to improve people's quality of life? And you know, I've been around the country for the last 12 months and I'm always amazed how simple some things are that could be done that we just make people's lives so much easier.
Ryk: Tassie has always looked for that giant project to sort of save itself. But we've found really, I would argue that we are flourishing now because of the diversity of our businesses, not because we've got a massive pulp mill or a giant, I don't know, tomato industry or whatever.
Jennifer: Yeah, I think that's true. But you still need large businesses kind of supporting some of those things. You still need people to buy the goods and services that are produced by small business. You still need those relationships. You still need those investors that are putting in big capital. It's not a one size fits all solution. It's not one company. I think any state, any country that says look, "all we need is a magic pudding" that's got one business or one industry, is putting itself at a lot of risk. I think the diversity has been important. But as I talk to small business yesterday they said, look, we still need some big investors here.
Ryk: Mona has been interesting as a big investor in cultural tourism and kind of creating an idea of a Tasmania that didn't exist previously, of like really high levels of service.
Jennifer: It's incredible. And it's really incredible to kind of talk, to sit down with Mark yesterday, the CEO, and talk about the pride that it's engendered in Australia and how, you know, it's been just so huge. And sort of the visitors annually, is the same as the population of the state. I mean, that's an incredible piece of investment, of vision. To me when I go there, I just thought there's vision for you. You know, there's a bit of vision that one person had that has just had this kind of multiplier effect of not just people working directly there, but all of the things that hang off it. And it's a great story.
Ryk: Governments love trying to get elected saying they're going to slash red tape, slash green tape and then they end up putting up all of the blue tape it seems. Is it getting harder or easier to set a business up or expanded business in Australia?
Jennifer: Much harder and some of it's, you know, we want to see good regulation, not no regulation, but sometimes you think really? Come on, you know, what are we trying to achieve here? Of course you want to protect consumers and of course you want to protect people's intellectual property, but fair dinkum, I just think sometimes the kind of overlap between the Commonwealth and the states, the cost of employing one person in this country is too much and we've got to kind of strip it out. And you're absolutely right. Every government I’ve ever heard says we're going to cut red tape. And then they add 20 times more than was there before.
Ryk: You're saying that the cost of hiring a person is too much. But in a lot of industries there's been increased casualisation, there's been a drop in the expense of workers, there's been a drop in what is paid people working.
Jennifer: Well, let's just get that right though. So first of all there hasn't been an increase in casualisation, and the Productivity Commission's confirmed that. It's the same rate as it was for 20 years. The second issue is that wages have not grown. And we have called that out. We have said wages have to grow. Now the way to get wages to grow of course is to have companies investing, be they small, be they large. Investing in things, getting new equipment, getting the kind of technical term "productivity" up. That is what increases wages. And, no quick fix to that is actually going to solve the problem. So people say, everyone should get a wage for rise? Well you know, if you're a small business particularly there's only one place a wage rise can come from, if you haven't got more customers in your door and more revenue in your door, that's your profit or the number of people working there.
Ryk: In terms of big business, you know, one thing that we've really seen rise over the last sort of 10 or 15 years is CEO salaries and packages, the gap between what a CEO earns and what a worker earns is like 100 per cent or something like that. I'm not quoting that figure. It's created a lot of cynicism I think in the community about that.
Jennifer: I think this is a problem that business has got to work through and solve. I'm not sure what the solution to be honest is because you know, people kind of say $500,000 is a lot of money. That's not what people are earning, they're earning, serious amounts of money. What I think shareholders want is more accountability for what people are doing. So if people are earning these big salaries. They want to see them held accountable for companies not doing so well and they want to see them rewarded when companies do do well. I mean, this is one of those issues that no one is ever going to get satisfied but do we need to fix it? Absolutely.
Ryk: Because it seems like if you're a CEO, if something goes wrong, you're accountable in the sense that you'd quit and then you get another job somewhere else. They're not accountable. We've seen the banks do this as well in the sense of going, okay, I'm going to stay here and sort this out. Alan Joyce did it.
Jennifer: Yeah, he did. You know, and he's coming here today, so it'll be good to see what he's got to say. He's coming to the lunch and he's doing the broadcast tonight. But, you know, there's a classic example of somebody who turned a company around that was on its knees, that put in the hard work. And now they, they're giving their employees, and I'm talking non-executive employees here, discretionary bonuses to like $300 million, I think it is. They've got a higher wage wages around 3 per cent. Now, you know, do you reward someone like Alan? Of course you do because he could've walked away. He could have said, well, I'm not, I'm not staying because we've made the biggest loss in Australia's corporate history. But he didn't, he stuck in there. His board got behind him, he did the things that needed to be done. The company's great success and it's investing here in Tasmania.
Ryk: Seventeen past seven. Before I let you go, Jennifer Westcott, CEO of the Business Council of Australia, where do you see the opportunities are in Tassie for some really big business?
Jennifer: Yeah, look, I think the tourist stuff is huge. We can't underestimate that. It's interesting, you know, people forget 140 million people in China have now got a passport and they're looking for somewhere to go and somewhere to have an experience that's not just another city, that's a unique experience. Tasmania has got that characteristic. So investing in the sort of infrastructure that's going to make the tourist experience really, really strong. And look, I think the agri-business stuff here is really important, but you've got to sort of all the freight issue because if you want to get high value products, cherries, and was with Tim Reid last night, to the Chinese market, to the Asian market, you've got to get them there fast and you've got to get rid of a lot of the obstacles to getting products out into other countries very quickly. And that means you've got to have good infrastructure at the airport. You've got to have direct freight. So they're the sorts of things we're going to be talking about today.
Ryk: And that'll be at the lunch today in the city, lovely to talk to you. Thanks very much.