Event: Jennifer Westacott interview with Jenny Marchant and Dan Cox, ABC Radio Hunter
Speakers: Jennifer Westacott chief executive, Business Council of Australia; Jenny Marchant, host, Dan Cox, host
Topics: Strong Australia; the Hunter; energy transition, Liddell power station, regional Australia
Jenny Marchant, host: Jennifer Westacott is the chief executive of the Business Council of Australia. She's in Newcastle today for a business forum, the first of several being held around the country, particularly in regional areas, for the Strong Australia network. Morning, Jennifer.
Jennifer Westacott, Business Council chief executive: Good morning.
Dan Cox, host: Locals are the first to say how important we are for the rest of the state and the country economically. That's not just hyperbole, is it?
Jennifer: That's not hyperbole at all. That's data. I mean, it's 10% of gross state product if you follow the economists’ language. It's a huge part of, not just the state economy, but the national economy. Newcastle and the Hunter are known across the world. If I were in Japan tomorrow and I talked about Newcastle and Hunter, Japanese companies would say, "Yeah, we know exactly what you're talking about." Indian companies would say, "We know exactly what you're talking about." So, what we are trying to do today is to make sure we tap into the potential here, tap into what local businesses say we need. And then what we want to do is advocate with government, state and federal, to say, "Actually, if we've got these things happening, we could power this up even more. We could really get this place going and manage the transition that's underway, that's constantly underway, and it's been done successfully in the past." So how do we really unlock the potential of the Hunter and Newcastle and how do we put it on the international and global stage?
Jenny: We have Liddell Power Station closing at the end of next week. When you talk about the transition, do you refer specifically to energy and coal, or are you looking at other assets?
Jennifer: I think it's not just energy and coal, obviously that's the big transition that's front of mind. But you think about what's happening with manufacturing. Suddenly, Australia's back in the game of manufacturing because manufacturing used to be about cheap labour, now it's about highly-skilled labour. You've got a world-class university, a world-class TAFE, a fantastic skill system, a skilled population, with graduate levels on the national average. So that's what big international companies are looking for. Then you've got the transition that's happening around agribusiness, where people are going to pay a lot of money for value-added products. If you sell a prime cut of lamb or you sell lamb cutlets for $75 a kilo. Think about the way the wine industry's taking off. Think about the defence industry. Think about all of these big global supply chains. The AUKUS supply chain is trillions of dollars over time. So, it's about tapping into those, unleashing the potential of people, getting the right industries here and getting coordination. That's my message today.
Dan: What's holding us back then if there is still untapped potential in our region?
Jennifer: Well, interestingly, we are going to the port after I finish here this morning, and what I heard last night was that 25% of goods go past the port. Now why aren't they stopping at the port? Why aren't we looking at the inland rail and saying, "Actually, how can we really make sure that the inland rail, which is a very big project, comes into the port and really maximise the potential of this port?" This port could be better utilised, and that's the message I've received over and over again. Then you've got things like the high-speed rail, which I'm a big fan of. Why aren't we getting that going now? The prime minister set up a group, he's very committed to this, but let's really put the foot on the accelerator because that would open up Newcastle, not just as a commuter suburb, that's not what I'm talking about at all, but as a lifestyle change opportunity because you'll need labour for all the things that I'm talking about. And of course, people have to get housing, they have to be able to connect to other parts of New South Wales. Getting the skill system really coordinated, so focusing on what I call, micro-credentials, so people doing short courses, stacking them up to get a qualification, getting that kind of system going here. So there's lots of things that we could do. And obviously, housing affordability. I heard that last night, big time. We've actually got to do something about getting housing to be more affordable, not just here in Newcastle and the Hunter, but across the state. And obviously, the incoming government has got some big plans there. But when I look at what countries are doing around the world, we are just not innovating. We don't innovate on products. We don't do things like build to rent. We are really behind the rest of the world in terms of affordable housing.
Jenny: If I can go back to, you mentioned three magic words, high-speed rail. When you speak with the business community, I can certainly see the benefits in my head for the business community, but when you talk to people just on the street in the Hunter, they will roll their eyes and tell you, "It's never going to happen. Never going to happen." Do you think that a high-speed network between Newcastle, Sydney and beyond is a feasible thing that we'll see in the next few decades, soon enough to take advantage of these opportunities?
Jennifer: Well, Jenny, people used to say that about Badgerys Creek Airport, Nancy-Bird Walton Airport. I chair the authority that's building the city around it. And one mayor, I won't know who they are, said to me once, "Love, it's never going to happen." Well, the runway is being laid, the terminal is being built, the airlines have taken slots. It's happening because governments took risk on it. They put government money into it. And then state governments, and this is kind of bipartisan, have put huge amounts of money into Western Sydney. It's happening. It will create a massive economic change in Western Sydney. That could be done in the Hunter if we did the high-speed rail. So it's about taking it step-by-step, preserving the corridors, getting the corridors secured, doing the planning, doing the approvals. Then looking to the private sector for things like public-private partnerships to see if you can reduce the cost to government. But whenever I hear people say, "These things don't happen," I say, "Go and look at Nancy-Bird Walton Airport." Because by 2026, that airport will be open. It will be, over time, Australia's biggest airport and the world's first fully-digital airport. So we've got to have a bit of belief, I think.
Dan: Right, I like that because we do the feasibility studies, we talk about the talk and we check out the white paper documents that come out, but it'll take serious commitment and ambition from governments today and to come to make it happen though.
Jennifer: Absolutely, and it takes co-investment. I mean, the federal government put nearly $6 billion into the airport in Western Sydney. Now you do need that because if you just say, "The private sector should do it all." Well, you've got to take the risk out of these projects, and that's the sort of stuff we need to do. And we need to start kind of de-risking it for the private sector. We saw that corridor preservation, all the planning approvals that I've talked about, and starting to map out where it's going to go, how it's going to come into Sydney, de-risking that entry into Sydney. I want it to come, of course, into Nancy-Bird Walton Airport, a curfew-free airport. Again, that's obviously for governments to make decisions on. The other crucial thing is to start thinking about the industries and economic opportunities that get unleashed when you put a high-speed rail in. And I think the other final point of high-speed rail is people are going to stop thinking about high-speed rail as the sort of Shanghais, Beijing, super-mag train. Germany has fast trains, Britain has fast trains. They dramatically reduce commuter times. And if I could get from Newcastle to Sydney in around an hour, I'd be pretty happy. So it's not about getting there in 20 minutes, right? It's about a faster train network that's connected and that connects people to economic opportunities and to transport opportunities. That's what's really going to get the state going.
Jenny: When you mentioned housing affordability before, it made me think about all the various parts of our community that housing affordability affects. Why is housing affordability of interest to the Business Council?
Jennifer: Well, because the housing market's 6% of the economy. It's a huge part of the economy. But it's also the reason that we don't have a lot of mobility in Australia. So if I look at places like the United States, a lot more people are mobile in terms of where they go and live. So they'll go and chase jobs, they'll go and chase universities, they'll go and chase educational opportunities, and they chase that because housing is not the big deterrent. Stamp duty is a productivity-sapping destructive tax. And we are always encouraging state governments to think about stamp duty because it basically stops people making common sense decisions, whether they're small businesses or say a person who's sitting on quite a big property on a big block of land, who'd love to get out of it, but they think, "Well, I've got a pay stamp duty on that unit that I want to get." It's a real killer, stamp duty. Then we've got this real lack of diversity of products, like built-to-rent is a big thing in other countries, we don't do it here. We do a little bit of affordable housing, but we don't do enough of it. So the state government's got this plan to put 30% of affordable housing new projects. That could have been done along here, along the foreshore here at real scale. And that's an opportunity we missed, particularly when you own government land. So it is doing all of that as well as making sure housing supply is continuing to happen, that we are rezoning the right amount of land. And of course, making the planning approvals easier. Any time it takes two years to do something, either build your own house or six months to get an approval to put a pergola in, that just adds to cost. So it's all those things. Why are we interested in it? Because it's absolutely essential to getting the economy moving.
Dan: Jennifer, we've only scratched the surface this morning. Enjoy your time in our region. Of course, we've spoken to you for a few minutes, but this panel today is part of the Business Council of Australia, the Strong Australia Network, will be really interesting. Thanks for coming in.
Jennifer: Thanks very much.
Dan: Jennifer Westacott there, the chief executive of the Business Council of Australia.