Jennifer Westacott interview with Fran Kelly, RN Breakfast

Event: Business Council chief executive Jennifer Westacott interview with Fran Kelly, RN Breakfast

Speaker: Fran Kelly, Jennifer Westacott and Michele O'Neil

Topics: Virgin Australia, COVID 19 response

E&OE

Fran Kelly, host RN Breakfast: The Prime Minister Scott Morrison has already said he wants pro-growth policies on the other side of this pandemic. To discuss what that might mean, I'm joined now by Jennifer Westacott, chief executive of the Business Council of Australia and Michele O'Neil, president of the ACTU. Welcome both of you to breakfast.

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

Michele O'Neil, president of the Australian Council of Trade Unions: Morning Fran.

Fran: Virgin is going into voluntary administration. Jennifer Westacott the company is a member of the BCA, should the government have bailed out the airline before it got to this?

Jennifer: Well I think the government obviously has given an aviation assistance package. Look, it's a very terrible situation. I really feel for the 16,000 people. I think, hopefully this restructure will allow us to keep a second airline going. Hopefully it will keep as many people working as possible because it is important that we have a competitive airline industry. The government did do an aviation assistance package. I think the challenge is when governments are asked on a company by company basis to do something. That has a huge number of risks and I think we always have to remember that's the taxpayer paying for that.

Fran: Sure absolutely. But so just to be clear as chief executive of the BCA, even though Virgin obviously suffered because of government policies in the wake of the pandemic to close the skies essentially. You don’t think the government should've done more to keep Virgin out of administration?

Jennifer: There will always be debates about what could and couldn't have been done. We are where we are now.

Fran: What do you think?

Jennifer: Well, I think the government did do an aviation assistance package. You’ve now got state governments talking about further assistance and that's important, I haven’t been party to those negotiations. But I do think that we've got to think about industries and not individual companies when you talk about assistance packages because there will be lots of these stories Fran. My concern is always that we make sure that we do have, coming out of this restructure, a competitive two airline system, an airline system that offers consumers choice and a company that can continue to employ people. That's where our focus has got to be now.   

Fran: Okay. Michele O'Neil, 16,000 jobs at risk. 8,000 Virgin workers are already stood down, they're on JobKeeper, most of them. Are you calling on the government to do more to save those jobs?

Michele: Absolutely we are Fran. This is a situation where the government has actually abandoned these 16,000 workers. They had the opportunity and were asked to look seriously about doing something to support Virgin and our view was that they should've been looking at equity in that company. The notion that the free market will somehow sort this out when the government actually was the body that shut down the market in the aviation industry is ridiculous. It is an abandonment of those workers. You can't, as the finance minister was just talking about, sit back and say, 'oh we're going to test the market.' The market isn't operating in normal circumstances. We're in the middle of a pandemic that has stopped travel. That is the situation that is facing those 16,000 workers. So, we think the government shouldn't be in the business of just handing money to companies in trouble. But in this situation when we want to keep two competitive national airlines in Australia, that's good for the workers, good for the economy, good for the tourist industry, then they should've seriously considered, and they still can, look at buying equity into this business. We're urging them to do it. They shouldn't have waited for it to go into voluntary administration. That's a very big mistake and puts at risk the assets of the business and of course, most importantly at risk those 16,000 jobs. But the time is for them to roll their sleeves up now, be part of a package that puts together government equity with other investors and keeps Virgin flying.

Fran: Okay let's move now to the road out of this coronavirus crisis. Just a handful of new cases yesterday, great news for Australia. But the restrictions will be in place for at least another three weeks. Jennifer Westacott, just a quick answer to this, given your warnings of the long-lasting consequences of the shutdown, how much longer do you think the economy can afford to be in hibernation?

Jennifer: Well I think it's not as simple as that. I don't think you can trade off the health of people and the economy in that sort of simple way. I think this is a matter for governments to gradually open the economy based on the advice of health experts. We find ourselves, thankfully Fran, in a better position than most other countries. What we released yesterday was a bit of a 'how' involving business which says start thinking about this in terms of activities and standards. With business playing a much stronger role, in setting standards, in promoting standards of safe work practices, of mass testing of the population with employers playing a stronger role there. And the use of opt in technology such as the app so that people can manage their health, they can have greater levels of freedom and employers can keep their workers safe, their customers safe. I think it's got to be a package of things around the activities and standards. There is no doubt that the economy is in serious stress. We've got to think about that from the perspective of people not statistics. This is about a person over 55 who can't get back into the workplace; a small business who sees their lifelong work just falling apart; it's about a young person who can't get back into work; it's about, I think, some of the serious social consequences. You're looking at domestic violence hotline numbers spiralling. You're looking at people’s mental health. But we've got to make sure we focus on the 'how' which we think industry can play a much stronger role. And think about it from the perspective of how we get the health outcomes maintained and how we get the economy going again.

Fran: Okay. Can I just move on to the, how we get the economy going again? Michele, we were just speaking to the finance minister there who said coming out of this the government will have pro-growth, a pro-business strategy. The prime minister has talked about revitalisation of the private sector economy and the policy settings to do that. What do you hear when you hear the prime minister and the finance minister talk about pro-growth, pro-business strategy? And are you on board with it?

Michele: Well most concerning when I hear that Fran, is the missing element of pro-jobs and pro-worker in it. And this can't be a hyper-partisan discussion. It's got to be one where we really look at, as Jennifer has said, we've got to look at the people here. We've got to look at the social cost as well as the economic one and find a path forward in this. That firstly, of course, starts with making sure that people are safe and that we do everything possible to eradicate this virus. But also making sure in any return of the economy that it's done in a way where workers' safety isn't put at risk and that's very important. Secondly, we've got to make sure that we don't just go back to what we had before. Because what this virus has shown is some deep flaws in what was happening in our economy and our labour market, that got exposed once we were in the pandemic. And an example of that is the very high proportion of workers who are in casual, insecure, contract and labour-hire work. The very first workers who were thrown out of work when the economy started to shut down. Those workers were left vulnerable. That's not a good position. It's actually not good for the economy, which was already weak prior to the pandemic, to have that many people in insecure work. Now those people, we need to think about how we rebuild in a way that's going to create secure, viable jobs. But we also need to think about doing it differently. We've got an opportunity now when you think about the need to de-carbonise the economy. The importance of thinking about rebuilding in a way that builds in standards that are good in terms of workers and local communities but also the environment. The other thing I'd say is the need in term of health and community services. We again had exposed to us some of the flaws in our system. So investing in public infrastructure, in our health system, in our education and community services system is an important part of the recovery.

Fran: Jennifer Westacott, your response to that? Is that what you think the government will look at doing to try and have a pro-growth strategy, invest in those sectors that Michele was just talking about, look at restructuring the labour market to be less casual, more full employment or the opposite of that? Looking for more flexibility in the IR system, to use that word, and also to look at lower company taxes for instance. Is that what you want?

Jennifer: Well the only way that we're going to get secure work is to have secure businesses. I mean people's work is insecure when their business is insecure. So, you know, I agree with many of the things Michele is saying there. What we have to have is a recognition that it is still business that employs 11 million Australians. And it's a strong business sector that will see secure workers. It's a strong business sector that will see more jobs. And that's a very important thing that we need to make sure that we come out of this with better jobs, with more secure jobs, with better-paid jobs.

Fran: So what do you think is the key to that? Is it, for instance, cutting company taxes?

Jennifer: Well I think it's a range of things Fran. The first thing I'd say is that as we always do in these debates, the first thing that people start doing is ruling in and ruling things out. You and I have talked about this many times. It would be great if we started this conversation with not doing that. And leave things on the table so we've got the maximum chance of getting back from this. But things like our skills system which is not fit for purpose. And a lot of people are going to need reskilling and retraining and it just takes too long to get people the skills they need. 

Fran: Okay so let's talk about investment by government into reshaping that. That's an investment.

Jennifer: Well I think that's crucial. That's the investment by government to make our skills system all responsive, more agile to use that expression. It just takes too long to get people skilled and trained. That's the first thing I would be really focusing on. The second is the regulatory system. It's interesting Fran to see how much regulation has just been put on hold. Why? Because it gets in the way of people getting on and doing things. We do have to think about being an attractive place to invest and it would be better to talk about the kind of tax system we want rather than this discussion that says rule this in and rule that out. We want a competitive tax system, not a low taxing country, a competitive taxing country. What do we want that tax system to achieve? Incentives, innovation, productivity, higher wages. We do need to look at our big infrastructure projects. But the main thing I would say is that we've got to keep the spirit of cooperation and as I said last time I was on the program when Sally was on, it's great the ACTU has worked with business. We've got to keep that going because at the end of this we've got to come out with an economy that grows stronger and faster. Because I think people forget this, it was the reforms that were done in the 80s and early 90s. I mean as we came out of the 1990s recession we had 30 years, thereabouts without a recession. We've got to come out of this with another 10, 20, 30 years without a recession.

Fran: Okay well I'm going to hold you both to the notion of more cooperation and hopefully get you both on again soon. Because this discussion about what it looks like, the way forward, is going to be an ongoing one. Michele O'Neil, Jennifer Westacott thanks for joining us.