Event Interview with Gareth Parker, 6PR
Speaker Jennifer Westacott
Date 16 September 2019
Gareth Parker, host, 6PR: Jennifer Westacott is the chief executive of the Business Council of Australia. Jennifer, good morning.
Jennifer Westacott, chief executive, Business Council of Australia: Good morning.
Gareth: Thank you for your time.
Jennifer: You're welcome.
Gareth: How's your relationship with the Morrison government?
Jennifer: Look our relationship is very, very constructive. We're working well with them on a whole range of issues - skills, regulation, red tape and getting businesses to invest. I think that the challenge here is that we don't see speaking out on issues and standing up for the role of business and for better economic policy is in conflict. You know, businesses are people. There are 11 million people who work in them. They are the mums and dads shareholders who own shares in them. It's the suppliers, the contractors, the customers. That's actually who business is and many of those companies their employees feel very strongly about things. And companies are entitled to speak up on those things. What we do need to do though is to make sure that at the same time we are doing two things. We are reminding the community about the importance of business, we're celebrating the success of business, we're not apologising for being profitable and for being successful. Because that's what creates jobs, that's what puts wages in the families of Australia, that's what puts wealth into communities. We should not be apologising for that. That's the virtue we should really be signalling. And we should also...we've also got a responsibility to speak up for economic policy because it's employers who know what works. So it's about getting the balance right I think, Gareth.
Gareth: What about speaking up for social policy?
Jennifer: That's a case by case thing. I mean some companies feel very strongly about social issues because they're reflecting the communities that they operate in. They are reflecting the will and priorities of their employees. And that's fine and that's a matter for companies. But you talked about Qantas. Qantas is a great example of getting the balance right. You know, no one has been a better advocate for industrial relations change, for tax reform than Alan Joyce. He gets that right. He talks about social issues but at the same time he has stared down some very tough issues in his company. He's been very courageous on industrial relations because he knew it was central to making sure that Qantas could survive and thrive.
Gareth: Well Jennifer Westacott from the Business Council is my guest on the program. I would like you to weigh in on this - 9221 1882. I'll make a frank observation Jennifer, it seems to me that the Morrison government are dirty on big business for failing to advocate for policies that were in big business' interests during the latter part of the last term of the government. So when you had Bill Shorten running around the country picking on big business and advocating for policies that would have harmed big business. The Morrison government feels as though big business did not help itself and therefore did not help the Morrison government get itself re-elected. They feel that when the government was taking all the pain over the plan to cut company tax cuts they didn't feel supported by the big end of town.
Jennifer: Well I guess, you know, let's be clear about the latter part of that. I mean how many interviews did I do with you about company tax reform?
Gareth: That's true.
Jennifer: Certainly you couldn't say that about the organisation that I run. The Business Council really championed those tax reforms because they were the right thing to do and they are still the right thing to do. Now we have tirelessly advocated for economic reform. We have been out there all the time. We were out in the regions before it became fashionable to be in the regions, talking to people about economic growth, about the role of business, about the importance of skills. So you know, by all means, people can have this debate. But I think in terms of the organisation I represent and many companies like Qantas - have stood up and spoke out about those tax changes - I think it's important that we get the messaging right here. But you know, gosh, how many interviews did I do on that? How many times did I get in the media on that? How many times did I go out to local communities talking about how important that was? It still is important by the way but because business investment is not working and business is low and productivity is low and wages are low. So look, I think what needs to happen this week and we're in Canberra, is that business and the government to work in partnership to make the country stronger because we are facing some challenges. We are facing a very, very volatile world and we need to get our skills system right, we need to unleash the country from the stranglehold of regulation and red tape - totally agree with Ben Morton on that. We need to make sure we're encouraging businesses to invest. So we need to turn the corner this week to get a partnership between business, and the opposition frankly, because the decisions we make over the next 18 months are going to decide our fate for the next 18 years. And it's business and government that have got to work together.
Gareth: Well what do you make of Ben Morton's central position here Jennifer. Which if I summarise it, this is how I understand it, he's basically saying it's almost the middle class test. Big business, if you want us to do stuff for you, you've got to explain to us and to the mainstream of Australia why these policies are in middle Australian communities.
Jennifer: Of course, I agree with him about that. I think we've all got to explain to Australians across the country why these things are going to make a difference. And that's why we've been doing this thing, as you know, out in places like Busselton, out in Geelong, out in Toowoomba, out in Townsville. Sitting down with the local communities for a couple of years - what's going to work, what do you need, what's your priority? What's interesting is how often they say 'we like business, we want big business here because we know they are big employers.' I don't disagree with him. I think we all have an obligation to make a case to the community about why a particular thing is going to be good for them and why it's going to improve their standard of living and why it's good for the country. I agree with him about that.
Gareth: Is big business succumbing to activist campaigns from the likes of GetUp or even activist shareholder groups [crosstalk]
Jennifer: I think business is not immune like anyone else in the community from being targeted by activists. I think, you know, they always have to look at those things again on a case by case basis and say 'what does this activist really want from me? Are they acting in the interest of my broader shareholders? Are they acting in the interests of what the bulk of the community wants?' So I think that's really important questions for companies to ask. But you know we're all getting it from those activist organisations and you know I think it's crucial that companies in the course of dealing with those activists remind people that it is okay to make profits. It is okay to be successful. It is okay to employ people. It is okay to give people higher wages and we've got to stand up for the right of business to operate in this country.
Gareth: Part of the shareholder activism that I'm sort of watching from afar with some emerging interest is the superannuation funds. Often the union dominated or the industry superannuation funds, now they have views on corporate governance. I want to sort of ask you about that because Gerry Harvey made some pretty interesting comments the other week about who he would prefer to have run his company and that's people who've got retail experience. But there's a push for gender diversity on boards, there's a push for triple bottom line reporting. I mean all sorts of different issues, I mean, where do you sit on this? What is the responsibility of the board and the management?
Jennifer: Well the first thing is that it is the responsibility of the board and the management. Now shareholders are crucial here and the superannuation funds form part of the shareholder community. But we need to sort of be careful here, because people don't need reminding, superannuation is a compulsory system in the country. What most people who've got their super in the super fund want is that their super fund grows. That they can retire with a decent income and I don't think people would be very forgiving in the long term if industry super funds started pushing companies that started destroying the values of those companies. And that's a judgement call that the board and management have to make. But again i come back to my central point Gareth, we should stop apologising for being successful.
Gareth: So but I mean are some corporate leaders being distracted or pushed around by activists?
Jennifer: Don't forget how powerful some of these activist campaigns are and look [crosstalk]
Gareth: The boards of the top 200 publicly listed companies are pretty capable of looking after themselves though.
Jennifer: Of course they are and they've got to make a kind of judgement call about where they want to go on certain issues but their principle responsibility still, in my view, is to operate sustainability, to operate ethically, to operate in the law, to serve the communities they operate, to look after their employers and to look after their shareholders who have put their money at risk to get a return. Now in my view those things are not in conflict and we've got some very capable people running our companies in Australia. It is getting the balance right to make sure that companies can sustain their operations into the future. I don't see these things working in conflict.
Gareth: Have they got the backbone to stand up to the campaigns?
Jennifer: Well I think that's something that I'm certainly calling on them to do because I think if they get distracted from the core mission of running successful companies, running them ethically, running them sustainably, doing the right thing by the law, doing the right thing by their shareholders, their customers, the environment. That's their mission - they've got to stick to that. I think many of these shareholder campaigns and these activist campaigns are based on total misinformation and I think it's really incumbent on boards to do their due diligence on who is behind that activist campaign. What are those people's ulterior motives? Do the questioning, do the due diligence and that to me is what boards should be doing. But nobody should ever see operating ethically and sustainably as in conflict with operating profitably and successfully.
Gareth: Thank you for your time this morning.
Jennifer: You're very welcome.