Event: Jennifer Westacott interview with Chris Kenny, The Kenny Report
Speakers: Chris Kenny, host, The Kenny Report; Jennifer Westacott, chief executive, Business Council of Australia
Topics: Business Council 2023-24 budget submission
Chris Kenny, host, The Kenny Report: Let me bring in the Business Council of Australia's, Jennifer Westacott. Jennifer, thanks a lot for joining me. Do you welcome a Labor government suggesting it needs to direct private companies about where to invest their shareholders' money?
Jennifer Westacott, Business Council chief executive: Look, there's a lot to agree in the Treasurer's essay. Like we all want Australians to have better wages. We all want the economy to be more dynamic. We all want Australia to take its position in the world. We all want to make sure that people aren't left behind. And we know that the big challenges that he's called out are the challenges that will define our country: the clean energy transition, uptake of digital technology. Our point of difference, Chris, is that it's the private sector who has to deliver on this. It's the private sector, a market-driven economy that's going to deliver the jobs. It's the private sector that's going to deliver the higher wages. It's the private sector that over the last 40 years has delivered some of the best living standards in the world through doubling of national incomes because we got productivity right. So, our argument is that the system doesn't need reinventing, it needs reinvigorating. We haven't done tax reform, we haven't fixed the Medicare system, we haven't fixed the Federation, we haven't fixed the migration system. So, we would say, let's get those things right. A market-driven system, well-run off the back of the reforms of Hawke and Keating and Howard and Costello, delivered Australia the envy of the world living standards, delivered us resilience through the GFC. Why don't we actually reinvigorate that system?
Chris: Yeah, but you don't want to get into a head-to-head clash with the government, but he's turned all that on its head in this essay, hasn't he? Instead of saying government will deliver certainty and then get out of the way so that the private sector can invest, he's saying he wants to co-invest with the private sector and direct them as to where they should invest in all sorts of spheres in housing, in industry, in the energy market as well. That's a recipe for disaster, isn't it?
Jennifer: Well, I think in some cases, to be fair, co-investment is essential. So, we've been doing those private-public partnerships for years in major infrastructure projects. They've worked really well and they've delivered good outcomes for people. The Clean Energy Finance Corporation, I think is a good example. What I argue though, Chris, is like get the macroeconomic settings right first. We've got one of the most uncompetitive tax systems in the world. Business is absolutely drowning in regulation and red tape, fix that and the private sector will do the heavy lifting. They'll do the investments, they'll take the risk, and government then doesn't have to pick up the tab. I see around the world, a lot of countries where governments do co-invest, but they get out and then they let the private sector take it from there. So, it is a partnership…
Chris: Well, exactly. If I could just jump in there, of course there's got to be a partnership on some issues, but isn't the most important challenge for the government now to get its own budget under control? That is to deliver a balanced budget at some stage in the foreseeable future. To control its own spending, as you say, to reform the tax system and lower a taxation burden on individuals and on companies, and deal with inflation, especially by getting energy prices under control?
Jennifer: Well, absolutely. I mean, we released our budget submission today and it basically argues pretty much what you're saying. First of all, take a set of measures that drive the economic growth, because it's economic growth that will drive higher wages. It's economic growth that will put the budget into a better position. Every time you grow the economy by 1 per cent, that's $6 billion you add to the revenues of government. So, get that economic growth going by driving the private sector, unleashing the potential of the private sector. Secondly, we say get the fiscal house in order. We need those tighter fiscal rules. We need that cap on real spending because that really sends a signal to markets. It sends a signal to rating agencies. So, we can actually see our pathway to getting the budget back on track. Then finally, make sure that we're reforming government services. Now, that's not about cost cutting Chris, that's about making sure that we're investing in things like IT, getting better service delivery, because we've got spending in some areas really running at a very high pace. But if you talk to people using those systems, they would say that they actually don't think they get a good deal. So how do we go with the way other countries have gone around digital services, around better access to services, and making sure our Federation, which is incredibly messy and confused, is working efficiently...
Chris: Yeah, more efficient government…
Jennifer: Premier Perrottet yesterday called for that and he's right.
Chris: Yeah. More efficient government rather than bigger, more cumbersome government. Thanks so much for joining us, Jennifer.
Jennifer: You're very welcome, Chris. Thank you very much.