Event: Jennifer Westacott interview with Danica De Giorgio, AM Agenda
Speakers: Danica De Giorgio, host AM Agenda; Jennifer Westacott chief executive, Business Council of Australia
Topics: Australian New Zealand Leadership Forum, labour shortages; skilled migration

E&OE

Danica De Giorgio, host, AM Agenda: Labour shortages, a strained Indo-Pacific relationship and major global economic shifts will top the agenda for leaders meeting at the Australian New Zealand Leadership Forum this morning. As the world changes, it is vital industries are restructured to create new jobs, boost wages and secure the future. It is even more important this happens on both sides of the Tasman. Joining me now live to discuss this is the chief executive of Business Council of Australia and Jennifer Westacott. Jennifer, thank you for joining us. You will be attending this forum, what do you hope it achieves?

Jennifer Westacott, chief executive, Business Council of Australia: Thanks very much. It is a great opportunity to bring business, government, community together between the two countries and start to say, how do we tackle some of these big issues? How do we tackle them individually? How do we collaborate on them? It's really important that we think about things like how do we work together on migration. It is one thing to shut your countries for a virus, it's another thing to not really be embracing migration. We’ve got a big labour shortage. So, we are going to talk about that. We are going to talk about our skills system, which has to be compatible. Sorry I am having a bit of a problem with my earpiece here. We have got to make sure that our skills system is compatible and that we are sharing best practice about how we upskill people for new jobs. We have got to collaborate on research and development. We have got to collaborate on the Pacific, particularly on how business and government work together to strengthen our Pacific neighbours. So, it is a great opportunity for people to come together. I am really hoping we have some really practical conversations, not just some good panels, but get some actions that the two countries can work on.

Danica: Absolutely and you mentioned job shortages, a huge problem right now in Australia, how can New Zealand and Australia work together to fill each other's job challenges?

Jennifer: We've got to remember how big this challenge is. So, on average, we used to take about 230,000 people a year and that was a combination of temporary and permanent migration and international students and so on. We have not been doing that. Over COVID, we lost about 90,000 people. So, we are about 300,000 short and last week's data shows we're about 500,000 vacancies that we needed to fill. So, we’ve going to get it into perspective. There are a few things I think we can do. The first thing is we got to fast track visa processing. That has got to be done between the two countries. Second, we have got to make sure that we're really an attractive destination for people to come here. I'm thinking things like moving away from the two-year visas to the four-year visas and for skilled people giving them a pathway to permanent migration. We have got to make sure we're pulling out all stops to get international students back, to get backpackers back, to get holiday visas working. And to make sure that as we come into both of the countries, whether it's Australia or New Zealand, that that system of coming in is as easy as possible. Because what you don't want to get around the world is a reputation that it's really hard to get in.

Danica: The Treasurer Jim Chalmers says Labor could ease at the migration cap, like you just mentioned, to bring in more foreign workers. It is currently at about 160,000. What should the cap be increased to then to replace the skills lost during the pandemic?

Jennifer: What we suggested there is we need to do three things. We needed to do a temporary increase to around 222,000 people just to catch up. The second thing we need to do is to weight that to about 70 per cent towards skilled migration. And then the third thing is that we go back to the setting, which was about 190,000 people a year. But again, reinforcing that you have got to make sure that that is 70 per cent weighted to skills. The other thing that we have got to remember is that we've got to make sure that we're skilling Australians up as well and that we're making it easy for people to participate. So that will be a big part of the discussion today. How do we get our skills system working, how do we get more women participating, how do we get everybody working to their full capacity? That is the other big conversation we're going to be having today.

Danica: Off the back of really tough economic conditions. How can Australia and New Zealand work together more efficiently do you think to create opportunity?

Jennifer: Well, there are a few things that we can do, labour we've just talked about. I think one of the things that stressing today is that we have got to make sure we frame up the conversations with the community properly. So obviously, we've had an interest rate change again this week. But if you sort of think about the long run average, interest rates over the long run were around 4.5 per cent. They're at 1.35 per cent. What is the problem? The problem is that wages have not gone up. So, if you think about it, it used to take you about two years for your wages to go up about $100 a fortnight, now it takes seven. On top of that, housing has become very expensive. Now, these things we can control. So, one of the things that I am pushing today is that we take control of the levers that we actually can control. One of those is productivity, driven by higher investment, being a more attractive part of the world to invest in. Because that is what drives productivity, and industrial relations system that encourages people to sit down, get things to be more successful and share those benefits in higher wages. Skills, I have talked about. We have got to think about the things we can control for. Then over the long term, I think as two countries we have got to say, what kind of economies do we want to be? Are we too narrow? Are we too reliant, albeit on very successful industries, on too few things? So how do we diversify our manufacturing base? How do we get into those big global supply chains? How do we have the most skilled, capable people in the world? How do we make sure that we are developing the world's best research and commercialisation, so that our universities are second to none? Those things are all within our control and my message today, we live in a very complex world. There is a lot of stuff that that we cannot control, take the levers we can control and get stuff done.

Danica: A very important day ahead for both countries. Jennifer Westacott, thank you for joining us this morning.

Jennifer: You're very welcome. Thank you.