Event: Interview with Ben Fordham on 2GB

Speaker: Jennifer Westacott, Business Council chief executive; Ben Fordham, host

Date: 18 November 2020

Topics: NSW budget, payroll tax, stamp duty, Jobs Plus, tax reform

E&OE

Ben Fordham, host: Jennifer Westacott is one of the most respected voices in Australian business, she’s head of the Business Council of Australia. She says this state budget should be a model for all state and territory leaders who want to lay the groundwork to secure our recovery. Jennifer Westacott is on the line, good morning to you Jennifer.

Jennifer Westacott, Business Council chief executive: Good morning Ben.

Ben: That’s a big rap?

Jennifer: It is a big rap because it is a very, very good budget. It’s about getting people back to work. I think the thing I’m really impressed with is that every dollar that is being spent is a dollar that gets a job back, creates a new job, but it also sets the state up for the future by way of making the state stronger. If you look at the infrastructure spend, accelerating those big projects - Sydney Metro West, Western Harbour Tunnel, the Warringah Freeway upgrade – all these things that are going to make the state stronger. The stuff around stamp duty, the stuff around payroll tax which is a tax on jobs, the stuff on social housing – getting the maintenance done and getting some extra houses built to get those waiting lists down. These things are about positioning the state for the future, that’s why I’m so impressed with it.

Ben: The incentives that have been offered to businesses to relocate to NSW, my sources tell me that that was your idea?

Jennifer: Well, we’ve certainly been suggesting these sorts of things to the government for quite a while but it’s not just about relocating to NSW, Ben. It’s about bringing forward investment, so saying to a company or a small or medium sized business ‘why don’t you think about putting that new plant and machinery on, why don’t you think about upgrading that equipment? We’ll give you four years of payroll tax relief.’ That means a lot to a businesses, that’s about bringing forward some activity, getting things cracking, getting some more people hired. So, obviously I think it’s a terrific idea. If you look at this whole thing as a package of ideas, it really is about making NSW the best place to do business. I think in 30 or 40 years’ time people are going to say, ‘the people who, in the middle of this crisis, planned for the future were the people who looked after their citizens’.

Ben: You mentioned payroll tax, it’s been reduced but only for two years, we need to get rid of it altogether don’t we?

Jennifer: Absolutely. You can see the state starting to do the thinking about tax reform, and look hallelujah on that. Good on them for starting to do the thinking. The stuff with stamp duty is really important because stamp duty is the worst tax. Payroll tax is a tax on jobs, of course we should get rid of it but you’ve got to do that as part of bigger tax reform. At least at the moment you got these two big initiatives, you’ve got this payroll tax deferral for people wanting to bring forward investment and then you’ve got these reductions that were announced yesterday, so its all heading in the right direction.

Ben: Now, you mentioned stamp duty. The Treasurer is proposing gradually replacing stamp duty with a land tax. Instead of paying a one-off upfront payment on a property buyers could pay an annual tax based on the value of their land. This is going to be a dilemma for a lot of people?

Jennifer: It is but it’s a good problem to have to be honest. First of all, it’s a good thing to have a choice as opposed to just making a big switch which I think has big transition issues. You think about it Ben, if you’re a couple who is now living in a three or four bedroom house in Sydney and you’re thinking about relocating or downsizing, and of course that would free up that house for a family, you look at that stamp duty cost and you say ‘you know, I’m not going to do that’, so people then stay in properties. Or, if you’re a small businesses and you want to sell your current property and buy another one, you think – stamp duty. We all know this from when we’ve done the math when we’ve been buying or selling properties, you think ‘oh my God’. It does become a big decision for some people, so they’ll be able to make a choice. Now, the government has agreed to consult on it and I think that’s the right thing to do.

Ben: And then you’ve got the policy that will probably impact the most people in the state where every adult will receive four vouchers worth $25 each to spend on food and entertainment, this is just a good way of kickstarting the economy again, right?

Jennifer: Absolutely. Look, the cynics will be out on that one but if you relied on the cynics you wouldn’t get out of bed in the morning. I think this is a really good idea because if you’re a small restaurant you’re thinking as you come into the summer period ‘will I stock up again? Will I put the extra staff on? Will I get things going again?’ You’d be umming and ahhing Ben, about whether you did that, then you look at this idea and you think hang on ‘I’m going to start seeing those bookings come back, I’m going to see those forward bigger numbers.’ That makes it easier for me to make a decision about whether I’m going to restock, I’m going to hire some people. That’s why I think it’s a really good idea.

Ben: You’ve given it an A+ which is very encouraging news, and we can only hope we’re going to bounce back sooner rather than later. Thank you so much for your time as always.

Jennifer: You’re very welcome, thanks so much.