Event: Business Council chief executive Jennifer Westacott interview with Laura Jayes, First Edition, Sky News
Speaker: Laura Jayes, Jennifer Westacott
Topics: Coronavirus response
Laura Jayes, host Sky News: Now let's go to Business Council of Australia CEO Jennifer Westacott. Thank you for your time. You must be heartened to hear what the RBA said yesterday and what Josh Frydenberg has said this morning?
Jennifer Westacott, chief executive Business Council of Australia: Look absolutely and what the Prime Minister has said last week, that coming out of this terrible crisis, we need a pro-growth, pro-business agenda. And we absolutely, Laura, have to start with getting rid of our old habit of ruling things in and ruling things out. Get rid of old our habit of ideological turf wars, helping us navigate our way through this. But there's no doubt that we have to get those pro-growth reforms. Whether it's getting our skills system working properly so people can get the skills of a modern economy quickly. Whether it's getting rid of regulation. What's so interesting is how much regulation has just been parked. Why? Because it was getting in the way of people getting on and doing their business. Making our tax system more competitive. Not just company taxes but income tax. Getting that infrastructure and those major projects powering up our economy. Those are the things that have to be in a reform agenda that drives business growth. Why? Because it's business that is the big employer, it's business that I think, along with terrific leadership by government, has held the country together. And it's going to be businesses - big, small, medium - that drive the recovery forward.
Laura: This government has already tried to pass company tax cuts. That wasn't successful and it has largely been parked, now the Treasurer has firmly put that back on the table. Do you think he should reinvigorate the plan that is already there? Or should it be company tax cuts in a different form?
Jennifer: Well the first thing is, what problem are we trying to solve? We're trying to solve business investment, which was low before this terrible crisis. It's business investment that drives productivity which drives higher wages. So that's the problem, let's frame that up first. Look I think it is important for us to put it back on the table but along with other tax reform. It's not the only thing that needs to be done. It's important that we look at the state taxes, the productivity sapping stamp duty taxes, payroll tax. It is interesting how much payroll tax has been deferred. The whole question of the right configuration of the state taxes. Whether or not we bring forward those other income tax cuts. So, it's not just company taxes but it is important we have a competitive company tax rate. To the Treasurer's point, we're not asking, in the Business Council, for us to have the lowest rate, we're simply asking for a competitive rate, so that we can be a magnet for investment in this country. Because we already have so many advantages, but we have one disadvantage which is a tax rate that is so much higher than everywhere else in the world. As you and I have talked about many times, at the height of this debate, 63 per cent of Australians supported lowering the corporate tax rate. It was people in this building, in Parliament House, who didn't see this as something that was in the national interest. And we would be in a much better starting position on recovery if we had that 25 per cent rate. So I think we have to put it back on the table. I think we have to stop the ideological wars about it. I think we have to be willing to have a conversation not just about that tax but about the whole tax system or as much of the tax system as we have the stomach to do reform on to make us a country that rewards innovation and incentive. And obviously puts money into the pockets of Australians.
Laura: There is opportunity in a crisis as you know Jennifer Westacott. We've already seen some state treasurers tinker around the edges of this. Federation reform is something which is has been as allusive as company tax cuts really. Would you countenance a situation where we had a broader based and higher consumption tax, like the GST, to get rid of some of those inefficient taxes around property and land?
Jennifer: Well I think in any tax reform you've got to make sure that all taxes are part of that conversation and that's one of them. I think the important thing with tax reform, just to sort of use the economist speak, is to try and wherever you can broaden the base and lower the rate. But it's not without its controversy, it's not without its difficulty. But as you say, if you are going to do these sorts of reforms, you would surely do them now and that's obviously the Reserve Bank Governor's call. Because we have to remember that it was the reforms that were done in the late 80s and early 90s that as we came out of the 1990s recession, we came out with nearly thirty years without a recession. We came out with incomes doubling over 40 years, income per capita. We came out with low, very low unemployment. We came out with a very strong country and we've got to get back to that position. So we've got to take the reforms that position us for the next 10, 20, 30 years of continuous and strong growth. And we have tremendous opportunities to say companies all over the world, Australia is a fantastic place to invest. We've got a competitive system, we've got efficient regulation, we've got competitive taxes. Come and bring your business to this fantastic country.
Laura: Just before I let you go, you mentioned skills. There are a lot of areas in which skills, the skills are wanting, the people needed to do those jobs, they need to be imported from overseas. I'm thinking of childcare, chefs just to name a few.
Laura: Have you noticed, and have you had any feedback from your members about how this JobKeeper payment is structured? JobKeeper isn't afforded to those on international visas. Are you concerned that we are losing some of these skilled workers because they simply can't sustain this period because they don't have that help from government?
Jennifer: It's something that we have to keep watching because particularly some of the international workers would be working in the agricultural community as part of the seasonal work. We're keeping a very close eye on it. I mean look, to be fair, the government has to draw some boundaries around these things like JobKeeper. We would have preferred for example there to be no difference between large and mid-sized companies in terms of the threshold. Because a job in a medium-sized business surely has got the same value as a job in big business. But it's still a magnificent initiative of the government. It's still the thing that has given the country hope. We will be looking at it very carefully as it rolls out. And I think we have also got to turn our mind very quickly to how we start to find our way back. Because that is going to be the best to get people back into the workforce. We've got to keep them attached now but we've got to find a way back and that's about making sure we don't compromise the health standards. It's about bringing those together. And that's why this week we said why doesn't industry play a stronger role by setting those industry standards, by working with government around testing and by using privacy driven technology, such as apps to keep their customers safe, to keep their employees safe? We've got to find that way back as well as making sure the JobKeeper works, works for everyone, works really efficiently.
Laura: Jennifer Westacott always good to talk to you. Thank you.
Jennifer: Thanks very much.
Business Council media team: (02) 8224 9214