Event Jennifer Westacott interview with Greg Jennett, ABC News Breakfast
Speaker Greg Jennett, co-host; Jennifer Westacott, chief executive Business Council of Australia
Date 7 October 2020
Topics 2020 Federal Budget
Greg Jennett, co-host ABC News Breakfast: There is some criticism of this budget that I'm sure that our coverage will pick up as the hours roll on about what's not in it. But let’s, for now, talk about what is in it. A very large amount of money for the business sector. Roughly speaking, $30 billion on the compact, on the idea that they get out there and hire. So we're joined by the Business Council of Australia's Jennifer Westacott. To test Jennifer whether this is actually happening. So big tax incentives, big benefits to business, what guarantees can you give that they're ready to hire?
Jennifer Westacott, chief executive Business Council of Australia: Well I think we can be pretty confident that businesses will hire. For a couple of reasons. First of all, there's a huge package to drive extra investment and we know that when businesses invest that they create jobs. We know that if they upgrade their plant and equipment that creates a work order for someone. That creates a job somewhere in the supply chain. We also know that if we give wage subsidies for those higher risk people who are at risk of people long-term unemployed they will put people on. We also know, and this is the really important point, that as we reopen the economy, as we stay the course in opening the economy, about 60 per cent of those jobs are already back. We know in NSW, 314,000 jobs back as the economy is reopened. So I think Australians can be very confident that those initiatives last night will see investment and will see job creation.
Greg: You mentioned the wage subsidy. It's aimed squarely at young people. 450,000, let's call in half a million is actually the goal, what is it about that subsidy that convinces an employer or employers to hire in those numbers? Is it achievable?
Jennifer: I think it is, it's very much targeted and it's targeted it at that group of people who have been overwhelmingly impacted by the real difficulties in the sector such as hospitality, tourism - young people. You've also got to see it Greg as part of the other packages. So, a tremendous amount of investment in apprenticeships and training. Tremendous investment in short courses which I've been arguing about as everyone knows for years that you give people a short course so they can upgrade their skills. So I think you've got to see it as a total package. Why will people employ people? Well, it will give people an incentive to put that young person on. To put that person who hasn't got much experience. Wrap that up with the training and you get that person back on the path to a long-term employment opportunity.
Greg: So much of the strategy here is about getting people to spend and businesses to spend. $30 billion is the figure that we're calculating on the back of the envelope. We're not accountants, we have to add, so we won't get into the depths of all these tax write-offs and incentives. But what is it that business goes out and buys because of these tax write-offs?
Jennifer: They'll go and buy, upgrade their machinery. So I've been going over the country for the last two or three years and you get to many mid-sized businesses. And that's the beauty of what the government has announced last night, is that it will cover the entire economy. And those businesses often say, look I've still got all of the demand, I've got the demand for meat productions I just need new equipment. I need to make that stack up.
Greg: And at present, critically at present, their hands are in their pockets.
Jennifer: Their hands are in their pockets. They're not confident. This will say actually that investment is now actually going to make a return. So they start putting on extra plant and equipment. That means they create a work order for someone who builds that equipment. They create a work order for someone to deliver it. They upgrade their IT. They upgrade all their systems. If you're a tradie, you buy new tools, you buy a new ute. Suddenly, you're getting back in business. For medium-sized businesses and larger business, they'll be bringing forward their big maintenance. They'll be bringing forward those bigger projects. Every time you do that, project by project, bit by bit, thousands and thousands and thousands of jobs get created. You start to close the gap on that million people who are unemployed.
Greg: Alright, we hastened to note here that there are a few scenarios and a few assumptions that underpin this budget. Vaccination is one, international borders is another. If I were talking to you this time next year, are you going to be able to report back that the goals laid down here would be achieved?
Jennifer: I hope so and I believe so. I think the government has been more conservative than people think. I mean we're talking about, if you add what's been spent to date and what's forecast to be spent in the budget, you're talking about nearly half a trillion dollars of investment. I don't think the government has made unrealistic assumptions. They've invested heavily in business investment. Invested heavily in wage subsidies. Invested heavily in training. Invested heavily in infrastructure. So I think they're not relying on wishing and hoping. I think they're looking at the data on likely vaccines and of course there has to be a planned and careful approach to reopen the economy internationally. People have to make those assumptions and we have to try and get that done.
Greg: Alright, well there's certainly an appetite for optimism. Let's hope it's well-founded. Jennifer Westacott from the Business Council thanks for joining us.