Event: Jennifer Westacott and Michele O’Neil panel interview with David Speers, ABC Budget Special
Speakers: David Speers, host ABC Budget Special; Jennifer Westacott, chief executive Business Council of Australia; Michele O’Neil, president of the Australian Council of Trade Unions
Topics: Federal budget; multi-employer bargaining; energy prices

E&OE

David Speers, host ABC Budget Special: To look at what this budget means for both workers and employers, I'm joined by Michele O'Neil, the president of the ACTU and Jennifer Westacott the chief executive of the Business Council of Australia. Welcome to you both. Let’s start with your big picture take on the budget. Jennifer, has the government got it right?

Jennifer Westacott, chief executive Business Council of Australia: I think this is a responsible, careful budget. I think it's reset the fiscal position and stabilised the budget position. There are some good things in there for growth: a massive skills package, women's participation - which is a big economic uplift, huge infrastructure spend, the National Reconstruction Fund - the $15 billion to start driving those new industries, some very carefully thought through reining-in on spending. The government has delivered on its election commitments and that's important to build trust. But make no mistake, the hard yards are to come, you know, we've got a trillion dollars of debt. The interest bill is the fastest growing payment in the budget beyond the NDIS, beyond health. We've got unemployment set to rise, we've got feeble economic growth of 1.5 per cent growing to 2. That's not the recipe for higher wages, not the recipe for higher living standards. We have got to get serious about reform. We've got to sort of stop kicking these big, hard decisions down the road.

David: Michele?

Michele O’Neil, president of the Australian Council of Trade Unions: Look it starts really important work of cost-of-living relief for working people. But it also shows the urgent need for wage growth. And that's the missing part of the puzzle, David. We really welcome things like the improvements in accessible and affordable childcare, doing something about Paid Parental Leave, these are so critical to ensuring that women can participate at work. But also the improvements in dealing with the housing crisis. We have to address both affordability in terms of home ownership, but also rental. The other things that are important there are those investment in skills, the free TAFE places, getting TAFE re-energised and revitalised after a decade of neglect. And the improvements and commitment through things like the reconstruction fund and rewiring the nation to getting jobs moving in the renewable energy industry and in our regions.

David: But measures to help don't kick in for some time with childcare not till mid next year, the Paid Parental Leave not until 2026 that you’ll get to the 26 weeks and housing not until 2024. In the meantime, you've got real wages still going backwards, are you disappointed there's not more direct help in the meantime, what do you accept that it's just too hard?

Michele: No, it's not too hard, and which is why we welcome the fact that the government is committed this week to introducing the missing part of the puzzle, which is the new industrial relations laws. We need wages to start growing, it's good for workers, good for the economy but the bargaining system is broken. I mean, one in seven workers are covered by bargaining, we need to make sure that we get it moving. It was a commitment from this government, when they went to the election. The budget can't deliver all of that. We need the structural changes. And our workers and employers to get together, bargain properly, make it simple and fair and accessible, but deliver wage growth. If we don't have wage growth, we're not going to see that consumer confidence that the economy needs…

David: Now I need to point out that we haven't seen these industrial relations changes, they'll be introduced to Parliament later this week. They are however, factored into this budget. Jennifer, the budget doesn't suggest there's going to be a wages breakout, even with these IR changes. Does that give you some comfort around your concerns?

Jennifer: Look, I think, we could have a longer discussion about the industrial relations reforms. We haven't seen the legislation. Look, I agree with Michele, we want our wages to grow, we want bargaining to increase. But we don't want a system that increases complexity, increases strike action. The community doesn't want that. But make no mistake, if we are serious about wage growth, we need to get serious about doing something about that feeble 1.5 per cent GDP growth. We'll get serious about that still having a two in front of it in the forward estimates. We'll get serious about continuing to work on the skill stuff that Michele has talked about. I totally agree with Michele. We’ll get serious about housing affordability and housing supply. We'll get serious about diversifying our industries. You can't do wages growth if the economy is just rolling along the bottom. And we need a combination, the IR system can't do the heavy lifting, the budget can't do all the hard work. It's a combination of all of those things.

David: One of the big problems, pressures on inflation, and everything else is electricity and gas. And we see tonight, just how much that's going up more than 50 per cent for electricity, more than 40 per cent for gas. This is a big issue for households. It's a big issue for a lot of businesses. Well, Jennifer, the government is talking about what it can do thinking about what it can do, what should it do?

Jennifer: Look, I think the first thing it has to do is stay the course on the climate change policies that they have put in place.

David: The net zero…

Jennifer: The net zero, the safeguard mechanism, the offsetting arrangements, because what's happened, why are we in this position? Because we've had years of policy uncertainty, which is turned off investment with that lack of coordination across the states.

David: But in the short term?

Jennifer: Well, we’ve got to sort out the capacity mechanism and that is crucial to make sure that we've got firming in the system. We've got to be careful that we keep a dual system going. We don't take things away before we've replaced them. Because that's going to create price spikes. But clearly, we're going to have to do something about hardship, we're going to have to make sure that we look after the people most vulnerable in the community…

David: Directly help them with their bills?

Jennifer: I think what I want to see is a conversation with industry about what's the best way of doing that. I mean, that's been done in the past. But of course, you’ve got to source revenue for that. The one thing that would be very unwise, is to start thinking about a series of ad hoc taxes to kind of deal with that problem. Because the very companies that have to make the decarbonise investment, we don't want to start doing things that are going to make it worse.

Michele: What's essential is that we get into the room, the gas producers, the manufacturers, and the unions in this sector…

Jennifer: I agree.

Michele: We need to have them together, saying, there is more that needs to be done. And we can't wait for this. This is urgent, it's hurting working people in terms of trying to pay their bills, but it's also hurting manufacturers and putting pressure on jobs. It's critical that more is done in this. It’s a good start in terms of some of the announcements tonight around the ACCC. But we have to make sure that we are both getting the gas reserve we need here in Australia, but also dealing with the price issue and stop dealing with it in an ad hoc way. I'd also say, I think there’s some pretty big profits being made by large companies in this sector. And we have to think about that in terms of what's going to happen going forward in the budget too.

David: Jennifer Westacott, Michele O'Neil, thank you both.