Jennifer Westacott interview with Lisa Millar, ABC News Breakfast

26 October 2022

Event: Jennifer Westacott interview with Lisa Millar, ABC News Breakfast, ABC News
Speakers: Lisa Millar host, ABC News Breakfast; Jennifer Westacott chief executive, Business Council of Australia
Topics: Federal budget; energy prices; productivity; wages growth; net zero


Lisa Millar host, ABC News Breakfast: Jennifer Westacott from the Business Council of Australia, Jennifer, good morning on this post Budget morning. That was a Budget that had some pretty grim figures in it, looking ahead over the next 18 months, two years, what's business going to do with it?

Jennifer Westacott, Business Council chief executive: Well, let's go and break it down. I think it's a cautious and responsible budget. I think there's lots of good things in it to grow the economy, huge skills package, big package on women participating through childcare and Paid Parental Leave, that's a huge economic boost. Continued record infrastructure spend, National Reconstruction Fund to grow new industries, and carefully targeted spending measures. But to your point, what it lays bare is the challenge ahead of us, and it's huge, you know, a trillion dollars of debt. The interest bill is the fastest growing payment in the Budget, above the NDIS, above Health, above Education. You've got feeble economic growth at 1.5 per cent, that is not going to get wages up, it's not going to change the quality of life that Australians want and need. So I guess our message is we've got to now do the hard yards of reform that we've been kicking down the road for the last decade. We've got to fix that skills system, we've got to bring in new industries, we've got to drive investment, we've got to get the energy system under control. We've got to make sure that we reduce the red tape that stops people doing stuff that would be about innovation that lifts productivity. Productivity is at a 60 year low, it’s productivity that drives wages. So some stark numbers there that tell us some big jobs to be done ahead.

Lisa: Well, the government’s argument is that the cheaper childcare, the extended Paid Parental Leave, all of that will go into increasing productivity.

Jennifer: It does. Absolutely and it does. We've been calling for those Paid Parental Leave changes, those childcare changes, the skills package, you know, these are all things that we, as the Business Council, have been pushing for, for a decade. So they're all great, but they’re not going to be enough. We've got to get investment going again. Investment, this is investment as a share of the economy, is as low as it was in the 1990s. And, you know, if we want to get new industries, and new jobs and higher skills, and higher paid jobs, we can't just rely on a couple of sectors, albeit they are fantastic, it makes us really vulnerable to the fortunes of others.

Lisa: Can I just go back to the energy prices? Because, you know, the Treasurer was using some pretty strong language in his press conference yesterday that I was at. Where he almost seemed to be threatening the industry with market intervention. Is that what is required? And what does that look like?

Jennifer: Yeah, look, I don't think that's the answer to the question. l I’ve got a couple of things to say. The first thing is we've got to stay the course on the transition to net zero. And we've got to do that in a coordinated careful way. Now we’ve finally got a policy package that looks sensible, we've been calling for it, we've got a target that's achievable. So we've got to stay that course, we've got to not add more shock to the system. We've got to stay the course on making sure that we've got capacity in the system. So this whole kind of capacity market that people have been talking was all about affordability and reliability, but the states have rejected that, because they don't want gas and fossil fuels in the system. Well, for the medium term, we need gas in the system. And so we've got to be careful that we don't get rid of things before we've been able to replace them, because that creates a price spike. Then we've got to look at how we deal with, you know, particularly vulnerable households. But, you know, the energy regulator has already intervened this year in energy prices and gas prices, and it's open to them to do it again. But that's not going to drive investment, that's not going to drive business confidence, that's not going to drive the certainty that businesses need to kind of put those huge chunks of money at risk to do this transition to net zero. So I'm not sure more regulation, more intervention is this the solution to the problem.

Lisa: Just before we have to wrap up a quick question on the IR draft that's coming out. Is this the time? We already appear that it seems there’s going to be a bit of a barney over various things in this draft. Do Australians need that at the moment?

Jennifer: First of all, I haven't seen the draft. So, it’s frustrating to talk about something you haven't seen. But look, what we want is wages to go up. We want those wages to go up and we want those wage rises to last. What we don't need, what we need is a system that drives collaboration, cooperation, sharing of productivity benefits, that drives innovation. What we don't need is a system that's more complex, that's more conflict driven, and that leads to widespread industrial action, that's not what we need at a time when our economy is pretty fragile.

Lisa: Jennifer Westacott, no doubt we'll be speaking about this again. Thank you very much.


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