Event: Jennifer Westacott Business Council chief executive interview with Fran Kelly RN Breakfast
Speaker: Fran Kelly, Jennifer Westacott
Date: 19 March 2020
Topics: Coronavirus response
Fran Kelly, host RN Breakfast: Well as you've just heard, workers who lose their jobs as a result of the economic crisis could be paid a temporary survival wage with the Prime Minister yesterday acknowledging that the shutdown measures are already having a severe impact on many businesses. More stimulus is on the way and this all comes as the Reserve Bank is poised today to announce its own extraordinary measures expected to include another interest cut to rock bottom levels and a program of quantitative easing. Jennifer Westacott is the CEO of the Business Council of Australia. Jennifer Westacott, welcome back to breakfast.
Jennifer Westacott, chief executive Business Council of Australia: Thanks very much.
Fran: It's just a week ago we got the $18 billion stimulus package, now the government is working on a new support package to keep businesses and individuals afloat. What does the government need to do to help businesses right now? When they have no cash coming through the door, many of them.
Jennifer: Well I think the first thing to say is that a lot has been done and more is going to have to be done. We're facing a very difficult time. I think people forget though Fran, we were in a stronger position. We still had a growing economy, low-interest rates and there is an endpoint to this. We are starting to see a turnaround in China. So, we've got to make sure we keep this in perspective, but we've got to divide what we need to do in the next three to six months and then beyond that, how we reboot the economy. In the next three to six months we've got to keep people safe, we have got to keep this thing contained, we've got to keep people working, we've got to keep businesses growing, we've got to keep money in people's pocket and then beyond that we've got to reboot the economy. We've got to quickly get those big incentives out there for big spending, we've got to get the regulation down, we've got to get the structure of work down, we've got to get the capacity for companies to rehire very quickly. Most importantly we've got to all pull together. I've got a list here of things that could be done now that I think are going to make a big difference. The first is cashflow. More will need to be done for small business and sole traders. We've got to give that wage relief that's been talked about this morning. We've got to give a break to people, particularly on Newstart. So don't ask them to turn up every week to a Centrelink office or a job assist, maybe give them a payment for 14 weeks so they can, you know, not be flooding companies with job applications. I think we should extend the depreciation that was announced week to large companies who could bring forward machine, plant upgrades, big fleet replacements to an ailing car industry. I think we should think about how we are structuring tax, I don't mean tax rates, I mean the fact companies are paying tax monthly. Now in some cases that's been extended to quarterly, that will help people with cashflow and we need to look into the state for payroll tax exemptions.
Fran: Let's go to some of those because Victorian Premier Dan Andrews has said the time for normal stimulus measures has passed and survival payments need to be paid. It looks as though there will be payments for businesses, direct payments for businesses, under survival payments. That would be the cashflow you're talking about and individual survival payments for workers and casuals who are losing their jobs.
Fran: I'm assuming that will include sole traders perhaps? Like personal trainers, massage therapists, hairdressers. Should all these people be getting emergency survival payments? Do you support that?
Jennifer: I think we have to make this as broad as possible because I think a lot of people forget that the sole traders are an important part of the economy and at the moment they're not being assisted. So we need to make sure that they've got cash coming in. Often because they contract to other people as well. So there's a sort of small economy there. The other really crucial thing Fran, is that we start to take the pressure off people in terms of regulation. So, for example, yesterday I wrote to every Mayor in Australia asking them to lift the curfews on deliveries to supermarkets and other vital stores, so we get products on the shelves. We should have a national removal of all these absurd retail trading hours so that shops can open in a way that suits their customers but also where they can tailor things say to older people. We should extend visas for people who are already here so that they can actually take up some of the, particularly the seasonal work where people are going to find it hard to get labour for things like major harvesting. We should just make it easier to do business. So if you're going to do a shop fit-out it shouldn't take three months to get a planning approval. Let's keep that to like a 14-day approval. You know we've got to put a hold on this idea that people are going to keep time and attendance records when people are going to be working from home. You know, we've got to give people the greatest flexibility they can to respond to this. And you and I have been talking about this for years. These are the things that have been holding us back for a long time, we've absolutely got to do something about that.
Fran: What about our banks? Are our banks strong enough? Do they have enough capital to get through this crisis if businesses start to fail and can't repay their loans?
Jennifer: I think one of the great strengths of this country is our banking system, it is still strong and you would have heard all of the banks say that but they have been doing a fantastic job. They have been deferring repayments, they've been extending payment terms, they've been making it easier to get credit, they've been taking a very flexible approach to repayments, they've been keeping branches open. It's important that we keep that banking sector strong. We need to take some of the regulatory pressure off them and some of that has been announced this week. But we have a very strong banking system, it got us through the GFC, and I think it's still going to be one of the backbones to help us get through this crisis.
Fran: What are you expecting in this stimulus or in this support package? We see the British government has announced a massive stimulus package of around three-hundred and thirty billion pounds. Six hundred billion dollars of that, in terms of Aussie dollars, is for backstop loans, bank loans to stop businesses from going bust. What do you expect the banks are going to be receiving from the sort of backup from the RBA and the government?
Jennifer: Well I think there is obviously this discussion about another interest rate cut and quantitative easing i.e. the Reserve Bank buying government or other bonds and increasing the supply of money to make it easier to invest and that also has the effect of lowering interest rates. I think we will see that. Look there will be lots of economists who debate but, you know, if you were ever going to do unconventional monetary policy, we're in unconventional times, you do it now. I don't think anything Fran should be off the table here. I think this is a time we need to be pulling together as a country. We need to be working together to help our colleagues, to help our friends and neighbours to be kind to people and think about people on low incomes. You know those people that are hoarding stuff, which is unfair and unnecessary, and this is a really important point.
Fran: Just on that and we're almost at the news, just on that, some of your members are the big retailers, Woolies and Coles. Why didn't they put limits on things earlier? Was there a profit motive in there for them?
Jennifer: Absolutely not. I think people have just acted quite irrationally to be honest. The supermarkets have been magnificent in the way they've been trying to fill the shelves but it's not made easier by having some of these ridiculous curfews that are in place at the moment. But they have been doing an amazing job and their staff are being abused and I just say this, it's unfair and it's unnecessary. There is no supply problem here, there is a selfishness problem here. People have got to think about the person on a low income who cannot afford to go to the supermarket and spend 500 bucks.
Fran: Jennifer, we're out of time. We're going to hit the news. Thank you very much for joining us.
Jennifer: You're welcome.
Fran: Jennifer Westacott is the chief executive of the Business Council.