Event: Jennifer Westacott Interview with Kieran Gilbert, Sky News
Speaker: Jennifer Westacott
Date: 28 May 2018
Topics:Company tax, Newspoll
Kieran Gilbert, host: Let's go to Jennifer Westacott, CEO of the Business Council of Australia and it sounds like there might be even some wiggle room there from what Pauline Hanson has said this morning. She's literally all over the place on this issue.
Jennifer Westacott, chief executive Business Council of Australia: Well let's just take the bigger picture here, it's really heartening to see that across the whole political spectrum, Kieran, more people support these reductions in our company taxes than don't. And that's on top of an IPSOS poll recently, where support had gone from 44 to 49. I think that's because Australian's get it. They get that business creates jobs, they get that business needs to be successful, and most importantly, they get that business has to be competitive in order to be successful, create jobs, create the conditions for higher wages. And we've been saying that, as you know, for a long time. So, it's really good to see this poll today and I urge everyone now to come back to the table because, you know, this is very important for Australia. If we don't do this, we are going to leave a $20 billion bigger economy on the table, not just for a couple of weeks, for a decade probably.
Kieran: Were you surprised by that number? More than 60 per cent saying that they want them either delivered now or within that 10 year period?
Jennifer: Not really, because all of our work and all of my contact with people in the community shows that people get that business is the job creator, they get that it's a successful business community that creates the conditions for better living standards. Look, you know, this has gone up and down for a long time. We’ve been working hard, as has the government, to make the case and to make it about workers, people's wages, about better living standards and about a more competitive and stronger economy which is a stronger society. That's the message we've been giving. It's great to see that across the political spectrum more Australians accept that than who don't. We are going to continue to prosecute that and I urge everyone on the cross-bench to come back to the table because this is really important reform.
Kieran: You want those individuals, like Pauline Hanson, to reconsider once again? I guess it's always possible, if not though, would you like to see some sort of incremental improvement? Like we've seen previously in terms of the size of business that might benefit from a tax cut, say up to a $500 million a year turnover?
Jennifer: I think the thing that people keep missing, Kieran, is this plan is incremental. I mean, the big companies don't get this until 2023. They don't get the whole thing until 2026. So, I'm not sure how more incremental it can be. And the problem with excluding the big companies, the companies over $500 million, you are excluding BHP, you are excluding Rio Tinto, you are excluding the big employers, Wesfarmers, Woolworths, you're excluding CSL. You're excluding the companies who are huge drivers of the economy, who are very exposed to global forces, and you are saying to those companies, we're not even going to send you the signal that your investments might actually have a better return, we're going to leave you out. I think that's a disastrous decision for the country, and I come back to the point, this is all about sending a signal so a company like Rio Tinto, BHP, who are very, very exposed to what's happening in the rest of the world. In the case of Rio, who've got more shareholders in the US than they have in Australia, where they've lowered their tax rate to 21 per cent. We are saying to those companies, we are not going to send you a signal that it's going to be better to do business in Australia. I think that's a terrible message, I think that's very poor policy and I think we will own goal the country if we do something like that.
Kieran: There's been some speculation the government might shelve the rest of the tax cuts if they can't get them through, the corporate tax plan. One individual, that I get no sense at all from, that would be willing to do that is the Finance Minister Mathias Cormann. Is it part of your focus as well to try and maintain the pressure on the coalition backbench as well, not to weaken their position on this given the electoral pressures over the next 12 months?
Jennifer: Sure, and look, you know, that's really a matter for the government to do itself and we're going to keep the pressure on across the whole society and the Finance Minister, the Prime Minister, the Treasurer, they've all been incredibly strong on this because they know it's the right thing to do. It's great to see that a lot of Australian's agree with them, and it's great to see those figures in the 63 per cent but they are pushing this because they know it's the right policy because we have to have a plan to grow the size of the economy and there's no better message, as you and I talked about in the day after the budget, than the dividends of a better and stronger economy than the budget. We were able to give low and moderate income earners tax cuts, we were able to avoid having to increase the Medicare levy to pay for the NDIS. These are the benefits that come from a stronger economy which is driven by the business community and the government gets that. And the Finance Minister has been so strong on this, so of course, we want everyone to hold their ground but not for the sake of politics but the sake of the country.
Kieran: Okay, and finally, what do you say to Labor's argument that their investment guarantee, basically, the instant tax write-off for assets upwards of $20,000 in value that that is their growth plan? Would they say that's efficient?
Jennifer: Well in and of itself, it's not a bad thing to do and we've been quite supportive of it but where is the modelling that shows what growth will come from the economy? The company tax cuts have been modelled by everybody. A one per cent permanent uplift in the size of the economy, $18 billion in today's terms, in today's dollars. Where is the Labor Party's modelling on the investment guarantee? There's nothing wrong with the investment guarantee, but it's very small, it's very targeted, it's very much about government deciding what companies should do, what assets they should invest in. Even the Grattan Institute said this is old economy thinking. So, we want to see a whole of economy approach to make our companies more competitive, so that we can get out there, grow our businesses, employ more people, pay them more.
Kieran: Jennifer Westacott, as always, appreciate your time. Great to see you this Monday.
Jennifer: You're very welcome.
Kieran: Thanks for that.
Jennifer: Thanks Kieran.