Event: Jennifer Westacott interview with Annette Beacher and Andrew Geoghegan, AusBiz online
Speakers: Annette Beacher, host; Andrew Geoghegan, host; Jennifer Westacott, chief executive, Business Council of Australia
Topics: 2022 federal budget; climate change; skills and training; taxation
Annette Beacher, host, AusBiz: Jennifer, good morning. You've just heard from the Treasurer and of course you've no doubt read the Budget papers. Did you see enough there about skills and getting women back to work?
Jennifer Westacott, chief executive, Business Council of Australia: I think the budget is pretty good. I think it does strike that balance between the short-term cost-of-living issues and the long-term putting the foundations in for stronger economic growth. On the skills front, the package is pretty big. It's a $7 billion package. You've got $2.8 billion for apprentices. You've got the skills agreement going up by $3.7 billion, you've got this very good idea of giving small businesses tax relief so that they can train their people and go and then other tax relief to go to digital. On women, the paid parental leave stuff is really good. It's about flexibility, massive simplification of the system and lifting that cap of people who are eligible to take PPL. So I think the package is good. Is there more work to be done on the structural stuff in the budget around productivity, around making Australia more attractive place to invest around growing business activity? Sure. But no one expected this to be a big reforming budget. That's the work that has to be done after an election.
Andrew Geoghegan, host, AusBiz: Jennifer, I was just asking the Treasurer there about that immigration rate. How critical is that for you as far as businesses are concerned? I mean, clearly, this is a political issue as we head into the election?
Jennifer: Sure. It would be a disaster for the country if this gets weaponised, the migration debate because I think people forget a couple of things. What companies and small business tell me is this, ‘I can't get workers and I can't get skilled workers.’ So we've talked about skills. In terms of migration. Obviously, we're going back to those pre COVID levels, which is really good and the good thing that the government has done in the budget, which we called for is re-weighting the migration program to 70 per cent skills. That's really good. Because the simple reality is that if we want to move to a different sort of economy, a more advanced manufacturing economy, a clean technology country, a clean carbon country, we have got to have some of those skill mixes from other countries. We've got to get that knowledge transfer, we've got to get some of those super experts. So companies say to me, ‘If I'm going to expand in Australia, I need certain skills and some of them are in Australia and some of them are not.’ So you’ve got to do these two things. You've got to get migration going again. I would have liked to have seen some catch up but I think it's a very difficult issue for governments. Then you've got to make sure that we're skilling people in Australia and making it easier for them to get skilled.
Annette: As you rightly point out all the short-term measures such as instant right off is cash in the bank, skills we can start now. In the longer term, are we still having a discussion about how high our company tax rate is compared with the rest of the world?
Jennifer: Well, if we're not having that discussion, we're going to miss out on a lot of investment. When you look at the forward estimates, you see business investment really rising up and then you see it really coming off towards the end of the forward estimates. That's because the expensing measure runs out. So, if we don't put something permanent in place, either an investment allowance or lowering the corporate rate. Don't forget, as everyone sort of emerges out of the pandemic as we emerge out of a war, as people start to rethink their supply chains, that sovereign capability, we are going to be in a massive race for capital. We do not have some of the levers that make us a super attractive place to do business. Sure, stable country, great country, great skilled people. But if you're a business globally and it's much more expensive to invest in this country than it is somewhere else, you're going to have a hard time convincing your board of that business case.
Andrew: Jennifer, are you disappointed perhaps that there wasn’t more on the clean energy aspects here because we know the cost pressures, certainly with carbon-based fuel at the moment, why not encourage that transition to renewables?
Jennifer: It's a good question. I think the days of having like a climate budget are gone, like a climate change section of the budget. I think the whole transformation of the economy now is about how you move to a clean energy future. That is going to drive new industries and new businesses and that's going to be how we reorientate our export markets. Which are 40 per cent carbon intensive at the moment. I don't think the days for sort of looking for a section on climate change in the budget, those days are over. We've moved beyond that. What we've got to do is make sure that we're pulling all the levers to drive that transition. So there are some good things in the budget, the modern manufacturing initiative, which has got an extra billion dollars. The work on defence is huge because it spins off a lot of other industries: semiconductors, electronic communications, all of that advanced electronics that you need for defence industry also needed for many other industries. Then you've got the regional initiative that's in the budget, which we called for, which is the obviously the infrastructure package but there's that $2 billion regional accelerator program. We hope some of that goes to regions where they're very carbon intensive. I wouldn't say there's anything, there's not stuff in the budget. I think people are going to start thinking about this really differently. It's not like, you know, the old days we've got a net zero commitment across two political parties. We've got all the states during stuff. Businesses roaring away with this. It's really about how you shift all of the economic levers to get that low carbon economy. The other point to make is there's a lot of stuff there on floods as they should be a lot of disaster recovery, but we've got to move to an automatic pilot footing on this we cannot be every time we have one of these disasters, be scrambling to work out what to do. We should just have permanent measures that we activate each and every time. I was in Lismore a couple of weeks ago, it is an absolute catastrophe. What people are going through out there and we just need to as a business community, as a government community work together and be on autopilot on this.
Andrew: Jennifer, thanks so much for joining us from the Business Council of Australia.
Jennifer: You're very welcome.