Event Interview with Chris Kenny, The Kenny Report, Sky News
Speaker Jennifer Westacott
Date 19 September 2019
Chris Kenny, host, Sky News: There has been a lot of talk in recent years about the role of business in the political debate. Business has always played a big role in economic debates about taxation, employment, investment and all the rest of it. But in recent years, whether it's same sex marriage or climate change, there's been a lot of criticism of the activism of business. Are things changing now that the coalition has been re-elected? Well let's ask Jennifer Westacott who's the CEO of the Business Council of Australia. Thanks for joining us Jennifer. And congratulations, like our previous guest in Canberra, you didn't go to the so called Midwinter ball last night.
Jennifer Westacott, chief executive, Business Council of Australia: No, I've never been to the Midwinter ball.
Chris: Yes that shows admirable restraint for someone who heads up the Business Council of Australia. Staying right out of the big night of the Canberra bubble [crosstalk]. Now tell us about your view of what's happening here. There's a sense that business is now agreeing with the government that it will just stick to its knitting - focus on economic issues rather than other issues. What's your...how would you express what business needs to do?
Jennifer: Look I think it's about getting the balance right. I mean obviously companies are representative of the broader community and we have got to remember who business is. It's the 11 million people who work in it, it's the mums and dads shareholders who own it, it's the customers, it's the suppliers and contractors, the communities that people operate in and many times people feel strongly about companies taking a stand. But we've got to get the balance right. We've got to be willing to talk about the economy. We've got to step up on that. We've got to say more about it. And the thing I would like companies to do a bit more of Chris, is talk about the importance of being in business. The importance of business to the community. Remind Australians that without business we don't have jobs, we don't have wages, we don't have prosperity, we don't have strong communities. So it's about getting that balance right, I think, and that's the message that the government has given us this week. And I think that what happened this week, that the Business Council bringing 80 CEOs and chairmen to Canberra to talk to the government and the opposition is an opportunity to get a partnership happening about how we make the country stronger, how we make the economy grow faster, how we put more jobs in the community, how we increase people's wages. We've got to have that conversation as well as having those conversations, where companies feel they should, on some social issues.
Chris: I will come back to the key economic tasks in a moment but just on those social issues, it's a very important point you make, that a business is people. It's made up of big companies who are made up of literally tens of thousands, hundreds of thousands of individual shareholders, either directly or through their super funds and the like. But that just increases the fact, doesn't it, that business needs to be mindful there will be a myriad of different views among those shareholders. So if an issue is, whether it's same sex marriage or climate change, where it gets away from the company's bottom line, where it is a more political issue, then your shareholders will represent all kinds of views and you can't presume to be speaking on their behalf.
Jennifer: Yeah I think that's true. I think companies like Qantas do a very good job of checking with their shareholders before they speak on issues. They check in with their board, it's a very, very cautious approach, I think, you'll find that Qantas has had. And of course Qantas is a great example of a company that has been really courageous on industrial relations. Really courageous on the economy. Look I think, you know, a lot of this is also about, you know, the kind of expectation that communities have that companies will stand for something. And look it's a case by case thing. I guess we've just got to make sure that we don't forget that we should be talking about the economy, standing up for the economy and my issue is standing up for business. And reminding people that without business you cannot have higher wages, you cannot have a growing economy, you cannot have a successful society. I think we've got to all step up on that one. Because, you know, you saw that the anti-business agenda can creep in pretty quickly, can take a stranglehold and we can't afford as a country to let that happen.
Chris: I think you're absolutely right, you've got to work on that understanding of what business does all the time. So that when there's tax increases around or when you're arguing for tax cuts that people can understand the benefits of it. Too often I think business is shy. Business will only come out to react against something they don't like. If I want to talk to business leaders in a whole range of industries that might be newsworthy from day to day, they tend to be a bit media shy. Do you think that's a fair characterisation?
Jennifer: I think that's true but a lot of it is because, sort of, the people that have got that anti-business agenda. You know if a company says 'we want to see a more competitive tax rate' they say 'well you know you're just talking in your self-interest.' But of course they're talking in the national interest.
Jennifer: Because they employ 11 million people. Because they are people who are creating jobs in communities. I tell you what, I've been doing this thing, Strong Australia, with you guys at Sky and we've been out to Geelong and Tamworth, sorry, Toowoomba and Busselton, and you know, Townsville. I tell you something, you do not hear people criticising the role of business in those communities because they're desperate for business to turn up. You know when I went to Adelaide with Strong Australia somebody said 'there's only one thing wrong with big business in Adelaide, we don't have any.'
Jennifer: We have got to, we've got to remember that the people out in the regions, they are desperate for investment, they're desperate for a company. But a lot of it is when companies do speak out they get this criticism where you're talking your own book. Well they are talking the book of a country. They're talking the book of future jobs and future wages growth. That's what they're talking about. And I think that's been one of the really negative things about the anti-business agenda that if you say something about lowering our tax rate, being a more competitive country, suddenly you're just talking your own book. And I just think that's wrong and I think we've got to stop that, kind of, shutting down of conversations. Because I tell you what, if companies don't speak up about the economy, we won't get the right policy settings and we will have this drip, drip into a low growth, low wage environment. And that's not good for Australians.
Chris: So much in what you say, yes I think business has to really argue hard for the right economic reforms but it's not going to be effective unless they are engaged with the community all the time about what they're doing. As a former Adelaide person, I can remember in the 80s when there were at least 10 of the top companies in Australia. I think 10 of the top 200 companies were headquartered in Adelaide. Now there's only one remaining I think in Santos. So what happens when these companies disappear? You lose jobs, you investment and you lose your children from a state like that.
Chris: So that's the message for business. Do you think this needs to happen in our schools? Do you think people in year 12 even understand how a publicly listed company operates?
Jennifer: I think it does. I think there's two things that we could do a bit better in schools. First of all is have business inform a little bit on some of the curriculum. Particularly some of career choices because I think a lot of young people, they just wouldn't know the kind of pathway to a particular job type is a different set of subjects than the ones that they are taking. And we are working on that at the Business Council. How do we give better information to schools about the sorts of things that employers are looking for. But I do think that it is important that we remind people of the role of business, what is a publicly listed company, what are companies, what do they do. I do think it's part of our social fabric. And I think we've got ourselves in the last few years into this pretty bad place of thinking somehow our companies is this abstract entity of a whole pile of people sitting around a boardroom versus the people who work in a company. You know, the people who work on the shop floor at Woolies and Coles. The people who work at Bunnings. The people who work in Kmart and Target. You know, the people who run those mines. You know, you look at those account figures today it's mining that has been incredibly strong today. In terms of getting the budget back towards a surplus. [Crosstalk]
Chris: Exactly. That reduces the need for all of us to pay taxes. One bugbear of mine in this whole debate is we often hear about company profits expressed in gross terms. You know we'll hear about a $50 billion company delivering a record or a $2 billion profit and it's never converted back to a return on capital. I mean it only makes sense doesn't it? If we refer to it as a return on capital and you know in that case it's a return of just five per cent or something.
Jennifer: And a return on the shareholder's investment. I mean people have put their money at risk for a company to be successful. They should be celebrating profit. I get very depressed by this Chris. When I hear people criticising companies for making profits, you think seriously? You want them to make losses? Because I will tell you what losses equals, it means someone is going to lose their job and we don't want that. We want companies to be strong because they are employing 11 million people. Nine out of 10 jobs in Australia are in business. And so when I hear the anti-business voices saying 'oh great they're a making a loss,' you think really? Seriously? They are making a loss, that means someone is going to lose their job. Do we seriously think that's a good thing for the country? I don't think so. We should be celebrating companies being successful and we should not be criticising companies for giving dividends to their shareholders. Because somebody put their money at risk so a company was successful. And in being successful they were able to give somebody a job.
Chris: Yeah well said Jennifer. I appreciate your time. Thanks for joining us.