Jennifer Westacott interview with Deborah Knight, 2GB

Event: Jennifer Westacott interview with Deborah Knight, 2GB

Speaker: Jennifer Westacott, Deborah Knight

Date: 2 December 2020

Topics: National accounts, international competitiveness, COVID-19

E&OE

Deborah Knight, host 2GB: Jennifer Westacott from Business Council of Australia is on the line for us now. Jennifer, great news for the economy.

Jennifer Westacott, chief executive Business Council of Australia: Fantastic news Deb. Much better than expected. As you say we are out of a technical recession. We've still got a long way to go on this but what does it mean these numbers? It means people are going to start getting their jobs back. It means people are going to get money in their pockets. It means businesses are going to get going. As I said, we've got a long way to go but this is the product of doing better than most other countries in the world in managing the health and keeping as much of the economy open as we could. And also, being in a better starting position - having a strong budget, having a growing economy. These are all the things that have led to our capacity to bounce back.

Deborah: And this is rear-view mirror stuff. This is looking back at the three months at September. This is when Victoria was in lockdown. So, I guess if we're looking forward, the smile on the dial is worth it. We've got a vaccine in front of us, we've got borders reopening in front of us. I mean 2021 is looking so much better than this year. 

Jennifer: Oh absolutely. As I said, we've got to make sure that we do a couple of things though. Because we've got to make sure that those borders stay open. That's the first thing because they're arbitrary state border closures. We need to go to that model of local containment, local tracking and tracing. Because we can't just stop and start economies. As you can see Victoria is the only state that didn't grow today. That's obviously a product of the lockdown. We can't afford to be going back and forward, back and forward. So that would be one important thing. But you're absolutely right, this is looking back. Looking forward, 2021 is looking much better. We know that retail numbers are looking good. We know Christmas is looking good. So, I think Australians should be pretty confident as we go into 2021.

Deborah: And the Treasurer Josh Frydenberg is about to speak. We'll bring details from that press conference when it happens. But obviously, we've got the government support still there - JobKeeper and the banks - they're still being lenient on repayments too. Is there a concern that when that winds up we could see the good times be not as good?

Jennifer: A few people are rightly concerned about it. But I think you've got to think about it in a different way. JobKeeper can't keep going indefinitely. But the government has set a new test for it. So if people are in hardship there is support there from government. The JobSeeker has been extended until March so people have that extra income in their pockets. The banks have taken a very, very careful approach to people. Working with their customers whether they're businesses or home buyers to make sure that they stay in their homes, stay in their businesses. So yes, it's something to keep in the back of our mind and keep a watching brief on to use that expression. But I do think that we are starting to turn a very, very big corner. And the most important thing is to get the private sector economy going again. Get investment going by some of the things that were announced in the budget, some of the things NSW has done. Get businesses employing more people, get them more confident, get them expanding. That's what's going to lead to people getting their jobs back, lead to higher wages over time. People can't stay living off JobKeeper indefinitely. Because we're spending a lot of money to stand still whereas we've got to convert that money to change the nature of the economy and get people working again.

Deborah: And I know that you and other business industry groups have been pushing for big reform, tax reform, helping industry groups and looking at a lot of the corporate tax issues too. That's still yet to have any movement from the government on that. That's the next step that I imagine you'd be calling for?

Jennifer: Yeah look that's the sort of medium-term of reform. But the stuff that was in the budget was really good. I mean giving people that investment allowance, that loss carry back, that's hugely important for small business. Obviously, the personal income tax changes, the big spending on infrastructure, the skills packages. All those things in the budget were hugely important and they're all contributing, I think, to that confidence. As we reopen bits of the economy, people start their activities up again. But we can't take our eye off, to your point, the big reforms that's needed because the Asian economies will bounce back very strongly and they're our competitors now. We need to be able to compete with them and make sure that we can stand in the marketplace next to them and sell our products and our services and our fantastic things. But if we make it too expensive to do business here well, we're just reducing our competitiveness. 

Deborah: And as we've seen with what's going on with China, we do need to ensure we can sell our products into other countries because that one is being locked off.

Jennifer: Absolutely. That's a very tricky situation. But the government, I think, is handling this extremely well. It's a very difficult situation we're in. And we've got to have that principled realism. We've got to keep our principles - our sovereignty, our security and the realism of course the reality that we do need to continue to trade with China. It's a very important market. But at the same time, we've got to make sure that we say well what can we really do here? We've got to make our country more competitive.

Deborah: Good point to make. Good on you Jennifer thanks so much for joining us.