Event: Jennifer Westacott interview with Ross Greenwood, 2BG 
Speaker: Jennifer Westacott
Date: 11 October 2017
Topics: Education and penalty rates
E&OE

Ross Greenwood, Host: Jennifer Westacott, the Chief Executive of the Business Council of Australia is with me right now. Many thanks for your time Jennifer.

Jennifer Westacott, Business Council chief executive: Thanks very much, I'm still recovering from the shooting star thing.

Ross: Wasn't that good?

Jennifer: It's amazing.

Ross: Size of a grapefruit, I like that.

Jennifer: Didn't think about that.

Ross: Now the one thing I want to ask you about this Jennifer, I will start, say for example, with those penalty rates, and that decision by the Federal Court. Now given the fact that you represent the top 100, the largest 100 companies in Australia, but of course for many, that's actually what happens to small business, that decision about penalty rates, but ultimately for the economy, that's got to be good, but for many households, that's going to be pretty tough if they do get a cut in those Sunday penalty rates.

Jennifer: Yeah, and look, I think you've got to kind of go to where you've gone. So who does this really benefit? It benefits small business. The person in regional community, in a tourist town on a Sunday who doesn't open their shop, or their café, or whatever, because they can't afford the penalty rates. And it also really benefits a person looking for work. A person who can't get work, that needs work on a Sunday, who may not be able to work the rest of the week, who needs those extra few hours.

Now, you know, obviously there's an adjustment known, and the Fair Work Commission laid out the transition to minimise the impact on people, and we are very supportive of that, but we just can't go on in a modern world thinking that in retail and hospitality, Saturday and Sunday are different. This is a 24/7 world in retail and hospitality, and I have really been behind this decision of Fair Work Commission for small business, and when I talk small business, they say this is really hurting their capacity to stay open and employ more people. 

Ross: But you know there's going to be a massive political issue going into the next Federal election.

Jennifer: Yes.

Ross: Unions and the Labor Party are basically opposed to this, notwithstanding it's come from an independent regulator that they created.  The fact is that it will be a part of the politics leading into the next Federal election.

Jennifer: Yeah, and I think we need to call some of the politics out. I mean, it's a big reach for the unions to run this campaign when they have done deals, and the first thing they've traded away in Enterprise Bargaining Sunday rates. I mean, really the hypocrisy of that is breathtaking. I mean, they've gone to the negotiating table and given away, Sunday penalty rates. If they're so precious to them, why did they do that?

Ross: It's a very good question. Alright I want to take you to the subject of your speech to the National Press Club, which really did address education in a very significant way. There's one thing I did note come out today from the university acceptance commission, and this basically the study preferences for young people doing their HSC.

So 62,000 early bird applicants for university next year. So 25% of those people, indicated that their first preference would be health. 21% said society and culture. 14% said management and commerce. 10% natural and physical sciences. And then you get down to creative arts, 8%. You get down to engineering and related technologies, 8%. Information technology, 3%. So agricultural and environmental, 1%.

But it just got me thinking that health is funded by government broadly, 25%. Society and culture funded by government broadly, 21%. Management and commerce, okay that's a private enterprise. Natural and physical sciences, depends on where it is, 10%. Creative arts, largely funded by government. A lot of the jobs that people are going into ultimately require government and tax payers money to fund them. It's not coming from private enterprise. There is not the entrepreneurial spirit here in Australia. Are we really directing our students the wrong direction?

Jennifer: Absolutely. I mean you've hit on one of the huge issues that people don't want to talk about, which is when they say, are we creating new jobs. Many of them, to your point, are being created by taxpayer funds, and we are directing people into the wrong things. And this is the point I was making in my speech today, that we need to create a better environment for people to study vocational things, for better market information so people pick the right things where they're likely to get a job, understand how much it will cost them to do the course, what's the right provider, they can pick between VET and higher education. And the other thing we propose to them is lifelong skills account, where once I've done mine ...

I get this if I'm studying in a university or in a vocational educational provider and I can have that for the rest of my life. So I finish my undergraduate, and then say I'm turning 40 or 50, and I need to up-skill, I control the money. So I can go purchase a module of training from a TAFE, something from the university so I can up-skill really fast, because if we don't do that, people have to go and start a qualification again.

We're really not going to be able to manage this big transition that's going to happen with robotics and artificial intelligence. So this is what we're proposing, but your point is absolutely spot on.

There are a million people going to university in Australia at the moment. A million people. Now, there are not going to be jobs for a million people going to universities. We need more people in engineering, more people in the vocational areas, but we've let our VET system, fall away and we need to put funding in the hands of the student and try and invigorate the vet system, which is what I was talking about. 

Ross: There's this issue of the VET system, as you talk about, that I had mentioned in the introduction, is that given the fact that previous governments, Labor government, but then this coalition government, to their credit, have tried to clean it up, effectively tried to privatise or allow private operators into what had previously been, right I believe, very well by the TAFE system, and by state governments in particular ...

And those private operators in a wholesale manner, ripped the system off blind, to the point at which students were getting ineligible or inappropriate training that was very costly. Giving them loans, which will never be paid back.  Saddling the government with many billions worth of dollars of debt, up to $6 billion or more. And this is the question as to whether, even if you do have a VET system, a vocational education training system, whether you can actually trust private enterprise to provide that without trying to gauge the students and line their own pockets. 

Jennifer: Well, it's a really good point and what I've said today in my speech and what we've set out in this paper is that first of all, the student has to control the money and that's hugely important. And secondly, they've got to have better information about the quality of the provider. Like a lot people who got ripped off by these rogue providers, there was nowhere for them to go and get information to say, this isn't a very good course, or you won't be able to get a job from this course, but government ... to be fair to the Federal government, they've really cracked down on this.

We're still calling for very strong regulators. We're calling for new body that can contract providers ... absolutely make sure that we shutdown these rogue providers. And the one thing I've said today Ross, in my speech, is we have to get TAFE back in its central role in education. We've got great TAFE colleges particularly in regional communities, and we've just let them whither on the vine.

We've really got to kind of re-establish that a a VET qualification, a TAFE qualification, should be treated with the same status as a university qualification.  Whilever we've got that cultural cringe, that if you go to university somehow that's better than going to a TAFE college or going to another VETprovider, we're not going to get this right.

When I talk to people all over the world, very senior business people, they will say it'll be the vocational system that really matters, as people have to get more technical skills, but is spot on, we should shutdown these rogue providers. We want to see accountability and we want to see the money in the hands of the student, instead of paying these providers so we're just ripping people off.

Ross: There's one other aspect that you mentioned today and that was politicians and our politics. Because right now if you're a young person and you're looking about the energy shortages, and when I think about Brickworks, our biggest brick maker, actually having to make a decision as to whether it makes bricks here in Australia or goes and expands and builds bricks in the United States and sends them back to Australia ... When I look at Incitec Pivot, which right now is going to make a decision, about 1500 jobs as to whether it keeps them here or tries to ship its operations or part of them overseas ... the whole point about our tax structure, about the fact that there is a lack of energy to create manufacturing to create those jobs that can make things in this country, that also is going to be a bit of a turn off. Otherwise students, our brains, are going to walk out of the country and go, we'll do it somewhere else.

Jennifer: Absolutely. I mean if you're going to pay 49%, top marginal tax rate in Australia, which is ... people are saying well let's make that the permanent rate. The Labor party is saying that. Well, and people can go and live in Hong Kong, or Singapore and 16 to 20%. Where are people going to live? Really. I mean, see your absolutely spot on. This is the point I was making today. We're falling behind in so many areas. The cost of energy, killing small business, hurting households, in our tax system. Our company taxes, our private taxes. We're falling behind on regulation. We drown families. We drown businesses in red paper. I know from Incitec Pivot  the difficulties they've had in getting planning approvals for their projects.

And then we continue to try to have this stop-start approach on carbon pricing. We are really making it hard and I was in America a few weeks ago, you know, if Donald Trump does half of what he says he's going to do on tax we will see billions of dollars of investment flow into America, and that will take money away from our country. Money that would otherwise go to new businesses, stronger businesses here and better jobs and higher paid jobs.

We've got to wake up. That 26 years of uninterrupted economic growth doesn't mean job done.  We have to work harder to make ourselves more competitive.

Ross: Jennifer Westacott, the Chief Executive of Business Council of Australia. Really important stuff. That there is no doubt. But it says something about your kids, your grandkids, and the way in which they will work in the future as well. And Jennifer, as always, we appreciate your time here on the program.

Jennifer: You're very welcome. Thanks a lot.