Jennifer Westacott interview with Fran Kelly, RN Breakfast

26 April 2021

Event: Jennifer Westacott interview with Fran Kelly, RN Breakfast

Speakers: Fran Kelly, host RN Breakfast; Jennifer Westacott, chief executive Business Council of Australia

Date: 26 April 2021

Topics: COVID-19 management, WA lockdown, child care and paid parental leave reform



Fran, host RN Breakfast: Well, business was bitterly disappointed again with another snap lockdown, this one in Perth, which could be extended beyond midnight tonight. We're getting the sense of that. On another front, the business community is urging the Morrison Government to use next month's budget to try and lock in the economic recovery that continues to gather pace. The Business Council of Australia is pushing a plan to increase female workforce participation by extending paid parental leave and providing more childcare support, which could see the economy grow, it says by an extra $5 billion a year. Jennifer Westacott is the chief executive of the BCA. Jennifer Westacott, welcome back to Breakfast.

Jennifer Westacott, Business Council chief executive: Thanks very much, Fran.

Fran: Before I get to the female participation on what budget should be doing on that front, can I go to the Perth lockdown? Initially triggered by a single case of committee transmission. It's now three cases in the community. Do you regard this response from the state government as proportionate?

Jennifer: No, absolutely not. We've got to get this on track, Fran. We've got to have these lockdowns, if we're going to do them at all, which we don't support this kind of widespread lockdown, we prefer the national hotspots approach. The way New South Wales has done it where they kind of do a local containment. We can't go on like this. I mean, we've got to live with this for quite a long time as your previous guest was saying. So we've got to get quarantine right. We've got to get local containment working. We've got to use the national hotspots approach because business just can't go on like this. And I'm particularly thinking small business. I mean, you plan for the ANZAC day long weekend, you stocked up on your inventory and bang, you're shut.

Fran: Sure. It's tough.

Jennifer: It just can't go on like this.

Fran: It is tough, but do you accept that each case is a separate case and in WA and the case of that person in Perth, there was a transmission in a restaurant which suggests and also that person caught it from someone through hotel quarantine, so it suggests it's a pretty virulent and infectious strain of the virus. That should come into the premier’s thinking?

Jennifer: Yes, but why is New South Wales is able to take such a different and proportionate approach? And why is it that we can't seem to get hotel quarantining right? Why is it that we can't seem to use the hotspots definition? I mean, these things are nationally consistent. Is the science different from one state to another? New South Wales has managed this extremely well. We've been able to keep businesses open, we've been able to stop these unpredictable disproportionate lockdowns and keep the economy going. That's what we need to see because we've got to live with this for a long time until a vaccine is rolled out.

Fran: Would you expect these lockdowns to be a thing of the past once the vaccine is spread through the community? Do you have sort of a vaccination benchmark for that to be the case? Or should we have?

Jennifer: Yeah. As you know, we released that. We should We released that plan a while ago saying that when you get to certain stages of the vaccine roll out, so when you've done all the vulnerable people, which is called 1B, at that point, there should be no basis on which you shut a state border again. You can start lifting the restrictions on events, you can start looking at more acceleration of office accommodation limits. At the end of 2B, we've done a lot of people, then we should be looking at student intake, international student intake. Now, all of these things still require good quarantine, local containment, good tracking and tracing. None of that is going to go away for quite a long time.

Fran: In terms of quarantine, do you have a view, as the head of the BCA, as someone engaged in a lot of policy areas across the economy, do you have a view about this position of whether we should be moving from hotel quarantine to specific quarantine camps as we have in Howard Springs? I mean, we had two private providers in Toowoomba putting up their hand to do it. Should the government be taking the lead here? The AMA says it could be years we're going to need quarantine facilities. Norman Swan says if we get the vaccine, we might not need it for that long. But do you think that we should have that by now or we should be getting cracking on something like that or not?

Jennifer: Well, I think the most important priority at the moment is to get quarantine under control and make sure it's done properly and that there are nationally consistent standards. And your previous guess point about everyone on the same floor rather than scattered throughout a hotel. That seems pretty basic stuff to me. So let's get that right. Jane Halton did a very comprehensive report on this. Let's implement that. I think to Norman Swan's point, you have to kind of weigh up the costs and benefits of opening up a whole lot of new facilities at the same time as you're rolling out the vaccine and whether or not the kind of total focus should be getting the quarantine system that we've got in place working properly, continuing with tracking and tracing, continuing with that local hotspot management, while we accelerate the vaccine rollout, and business is ready to step up there. We've said we're happy to open up mass vaccination centres when we get to that part of the population so that we can get this done more quickly.

Fran: Okay. The closed borders means very few immigrants are coming in. Skilled workers aren't coming in. So the country has a skills gap at the moment and a labour shortage on some fronts. Is that why the BCA is focusing on trying to increase female participation ahead of the May budget? It's a potential labour pool that's not being used to its full potential. Is it as simple as that for you?

Jennifer: It's pretty much about that but this has been a longstanding issue, Fran. We've had our child care system for a long time that has these big cliffs in it where when you earn an extra dollar over, say something like 189,000, which is the first cliff, you'll lose $2,000 in your subsidy. When you get to $350,000, which that's combined household income, you lose the lot. So what we're proposing is that you have a slower, more careful tapering. So 1% for every extra $4,000 you earn. So that it's an easier system and it doesn't deter people from going into work. Now, this been a longstanding problem on child care, these big cliffs. People have been talking about this long before we start to see these predictions of a lower population growth. So we should fix it  but there's no doubt that the lower population growth means that it is more urgent than it was before. We think the budget's an opportunity to fix the system by making a more generous subsidy for low income people, increasing the cap so more households can get the child care subsidy and getting these big cliffs removed so that there's a smoother tapering, so there aren't these big disincentives to work. The other point, Fran, this is not just about women getting into the workforce. It's about them realising their potential. It's about them being able to take that extra shift, get that promotion, do that new job without the penalty of losing a lot of your childcare subsidy or all of your childcare subsidy. We say there aren't enough women in leadership positions. Well, surprise, surprise, if every time you get a promotion or every time you want to do a bit extra, you get whacked from losing your childcare subsidy, surprise, surprise, people aren't taking up those opportunities.

Fran: If we are asking parents to spend more time at work, which means therefore less time with their children, we will need to ensure the quality of their childcare is top class too. Should there be a focus on that?

Jennifer: Absolutely. Spot on. So a couple of things there. One of the things in our proposal is that it's very carefully calibrated so that at the same time as you remove these cliffs you make it more affordable for people. Remembering 90,000 people last year, this is the Productivity Commission's data, said they weren't working because they couldn't afford the childcare. So while you're doing that, you've got to fix up quality, particularly workforce. Particularly workforce. And you've got to make sure that the capital's there for the assets, and you've got to make sure that the quality is there so that you're actually helping young people with their early childhood learning, thrive by five sort of idea. Our proposal allows you to fix these big cliffs in access, but at the same time, you've got to work on workforce, you've got to work on quality and you've got to work on that early childhood development.

Fran: Okay. What about paid parental leave? You've also got a proposal for a change here. Currently, the main caregiver in parental paid leave is almost always the mother. They receive 18 weeks’ time off at the national minimum wage. That's the government's subsidy. You want that to increase to 26 weeks over time and allow it to be shared between both parents, which sounds like a terrific idea. You said it cost about a billion dollars a year. If parental leave was more generous and flexible, how many more women do you think that would encourage to return to the workforce once they've had their kids? What would that do to the mix?

Jennifer: Well, we don't know that data, but we know that the cost would be about a billion dollars if people took it up. So we're saying you put an extra two weeks in, up to 26 weeks, over eight years. So you phase it in. You allow the couples to share more equally.

Fran: Do they get rewarded if they share more equally? Is that right?

Jennifer: That's right. That's correct. Now government, to be fair, introduced some changes last year to allow more sharing. We're just saying let's go a bit further. Let's make that even more flexible. I think, Fran, the main point here is it allows people to participate. It allows women to work. But more importantly, I think it can drive culture change. It drives culture change in sharing.

Fran: And it allows men to parent more too.

Jennifer: And I think many, many men want to do that and they say that there's a disincentive for them to do that. So it's good for women's participation. It's good for the community, but it's going to drive major cultural change in our workforces. I think frankly, it reflects your point that people want to raise their children differently. They want to share in the caring responsibilities and that reflects the modern family.

Fran: Can I just ask you very briefly, we're out of time, but superannuation, there’s a gap for women obviously. It's a serious issue for women, financial security. It's not paid during parental leave in most cases. Should that change? Should women keep accruing super during paid parental leave?

Jennifer: I think the government's looking at that and we would encourage them to do that. But I think we also have to remember that the main reason that women end up with really poor super balances is because they've taken big chunks of time out and they're not able to get back to work easily. So you've got to also fix the fact that women aren’t participating hence my childcare paid parental leave proposal. But of course we should fix it, but because we want people to have a dignified, meaningful retirement, and we should make sure that we remove those problems where people aren't able to accumulate that effective superannuation balance.

Fran: Jennifer Westacott, thanks very much for joining us again on Breakfast.

Jennifer: You're very welcome. Thank you.


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