Event: Jennifer Westacott interview with David Speers, ABC 7.30
Speakers: David Speers, host, ABC 7.30; Jennifer Westacott chief executive, Business Council of Australia; Michele O'Neil, president, Australian Council of Trade Unions
Topics: 2022 federal budget; cost of living measures; wages; productivity; economic growth

E&OE

David Speers, host, 7.30: We are joined by Jennifer Westacott, chief executive of the Business Council of Australia and Michele O'Neil, president of the ACTU. Thank you both for joining us. Jennifer, let me come to you first on the cost-of-living measures and indeed the fuel excise cut, $3 billion for that measure alone. Is this the sort of reform you were hoping for? Set Australia up for post pandemic success?

Jennifer Westacott chief executive, Business Council of Australia: I think the budget does get a balance between those cost-of-living pressures, those short-term forms of assistance and then laying the foundation for stronger economic recovery. There are lots of really good things there which we can come back to around skills…

David: The fuel excise?

Jennifer: The fuel excise, well what is the alternative? People are really struggling here. Here is a lever that the government can pull. It gives them time to then do the real work that has to be done around a national road user charging system. Particularly taking account of the fact that we will have a lot of electric vehicles, but you know, you've got very targeted measures. You've got one off measures, you've got the $420 linked to the low-income tax offset, you've got the $250 payment. I'm just not sure what people think is the alternative when people are really struggling to put petrol in their cars and meet their household expenses. The big job is of course the job that I think Michele and I agree on, which is you've got to get wages higher over a longer period of time.

David: We'll come to that. Michele, just on the cost-of-living relief, though a lot of workers will probably welcome cheaper petrol and a few hundred bucks. Do you support what they've announced on that front?

Michele O'Neil, president, Australian Council of Trade Unions: Well, when you're doing it tough, every bit matters, but nothing that matters as much as a wage increase and this budget completely failed…

David: We will come to that, the cost-of-living relief?

Michele: Well, one off payments David disappear so fast. We don't see one off increases in rent or in childcare or in grocery bills. So, what are these one off payments? They are something that will get the government through a period to the election, but I don't think workers are going to be that easily bribed. I mean, I think people see it for what it is. It doesn't address the real issue for working people, which is their wages are going backwards. They're going backwards in real terms on average $800 last year and these figures tonight show they're going to lose another $500 in the first six months of this year.

David: Let's talk about this. The forecast is wages are growing, but not as much as inflation, certainly for the rest of this financial year and then they start to overtake just only just in the in the next financial year. Jennifer, would you like to see more immediate pay rises?

Jennifer: I'm not sure how you do that if you don't then do the work that gets the economy moving. If you don't do the work on increasing productivity to obviously make sure that we're expanding our businesses; that we're growing our businesses that we're growing our exports; that we're skilling people up to do higher paid jobs; that we're attracting investment into the country, those are the ingredients for sustained wage growth. As well as, fixing our enterprise agreement system, restoring it, because that's the basis on which people get paid more.

David: So, is either side willing to touch that?

Jennifer: Well, I hope that post-election people get back to the table and the ACTU and the BCA did some very good work on this.

David: You came pretty close.

Jennifer: We came very close. Australians want and expect people not to just dig in on turf wars, they expect them to be in acting in their interest. I think people have got to go back to saying, how do we get wage growth sustained across the whole of economy. The problem with what we're seeing now is wage inflation, which is patchy, which actually is counterproductive. What people tell me is that wage inflation, that spiking just means they are they do less, ‘I'm not opening a restaurant five days a week I'm opening at three’ or they don't do some of the projects that they were going to do. We've got to address the whole issue of skilled labour, getting people skills, but making sure that we've got a sustained effort on wages.

David: Well, I know the unions have been waiting to see tonight's budget before finalising a submission for this year's minimum wage case. What do you think now?

Michele: Well, we know that what the government failed to do is actually say that they're going to support with a submission to the minimum wage case. This is happening this week. This is a measure the government could do this week to make a difference to one in four workers. One in four workers are dependent on what happens with that minimum wage case.

David: What will your submission be?

Michele: Well, we will be announcing the detail of our submission in the next day or two, David. But what I know is that we need to see wages that are increasing above what is currently the cost of living.

David: Which is about three and a half or more per cent. So, you'll be seeking a minimum wage rise above that?

Michele: Absolutely. You know, people need to see both it being in front of the cost of living but also, they need to have some share in productivity. To Jennifer's point, workers have the lowest share of productivity growth than we've ever had, like the labour share of our GDP has been shrinking and continuing to shrink. The problem is not just that we need productivity to increase. The problem is workers aren't getting any share of that and not getting a fair share of it.

David: A couple quick ones. There are some additional measures tonight for small business, encouraging them to invest in training and some other cyber efforts as well. But for bigger business, the immediate expensing comes to an end. It's been a feature of the last couple of years over the pandemic, most businesses were able to access this. Are you okay with that?

Jennifer: I think at some point, someone has to come to terms with those low business investment numbers. You look into the forward estimates, you look in the outer years, you've got business investment really falling away when that expensing measure finishes, and you've got GDP with the two in front of it, again, GDP growth. That's a problem if we want to actually have a high wage environment. We've got to at some point come to terms with the fact that we are not an attractive destination for investment. But make no mistake that expensing allowance did a lot of very good work. A lot of projects got up. But you know, the government is sort of like trying to wean people off this kind of support. What we need is a permanent change to our tax arrangements to make it more competitive, but the stuff is small business is really good. You know, the digital stuff, the training stuff really good.

David: All right. Jennifer Westacott, Michelle O'Neill, thank you both very much for joining us.