Event: Jennifer Westacott interview with Matthew Doran, Afternoon Briefing
Speakers: Matthew Doran host, Afternoon Briefing, ABC; Jennifer Westacott chief executive, Business Council of Australia
Topics: Federal budget; multi-employer bargaining; wages growth; inflation; supply chain issues

E&OE

Matthew Doran host, Afternoon Briefing: Jennifer Westacott, thanks for joining us on Afternoon Briefing. Business always has a wish list when it comes up to a federal budget. What are the things that you are hoping will feature in this budget that Jim Chalmers is releasing?

Jennifer Westacott chief executive, Business Council of Australia: We don't have so much of a wish list for this budget. It's more we want to see the government outline its long-term fiscal strategy. We want to see really three things addressed in the budget. We're not expecting this to be a big reforming budget. We're expecting government to be cautious, deliver on its election promises. But there are three things that we were really looking for. First of all, that we keep the discipline on spending. The second thing is that we drive for growth and that the government does outline its package for growth and the sorts of things to will lift growth and therefore lift wages. And thirdly, that we want to see the government start the process of reforming its spending, not cutting its spending, reforming its spending so that people get better outcomes in areas like the NDIS, aged care, childcare, so that we're not sort of forced in five- or six-years’ time to be making cuts to those services. We've started to do the hard yards of making sure that those services work better for citizens.

Matthew: Do you think that you are seeing a bit of a sense of that when we've got people like Katy Gallagher, the Finance Minister coming out and saying that she's running the ruler over all the spending from the previous government, they've found things that they can cut or reallocate or push down the track. Does that give you some hope?

Jennifer: Yeah, it does. I mean, I think the government is well and truly on top of a few important things as we're going into this budget. The first is that we are in a very difficult situation globally and domestically. We've got a better starting position than most countries, and the Treasurer has made that point very strongly. But nevertheless, we have high inflation, we've got interest rates rising, we've got supply chain issues. We've still got huge problems of a labour shortages, which is really punishing small business. And we've got these big cost of living pressures that are hurting families. And the government is very conscious of that and very careful. I think the government is running a very careful strategy about making sure we respond to people who are doing it tough. But at the same time, not driving up inflation by making decisions that create demand issues where the supply is not there. It is great to see the government looking at opportunities to find savings in a sensible, careful way. Nobody wants to see services cut, but I think people do want to see government money spent well, spent effectively so that people see that for those services, that they get better outcomes from them.

Matthew: So it's a bit of a stock take as well as a implementation of election commitments?

Jennifer: Absolutely, yeah.

Matthew: Something else that business is very interested in at the moment is the workplace relations legislation, which we're expecting this week. A lot of discussion around the issue of multi-employer bargaining. I know that the business community has had its issues with that or its concerns with that. Based on your discussions with the government up to now, have any of those been of allayed?

Jennifer: I think we still have the same concerns, and obviously we haven't seen the legislation and look forward to seeing it, we believe on Thursday, but a couple of points to make. The first is we all want Australians to be paid more, but we've got to do that in a way that we can sustain paying them more. We want to see that done through productivity. The IR system can't solve every problem in the country, and the budget will have to play a big role in laying those foundations for growth and then the May budget next year, really putting the supercharge onto growth for productivity. That's the way to put higher wages into people's pockets. So we remain concerned. We remain concerned about multi-employer bargaining, is that the way to drive up wages? What we want to see is that more people bargain. They bargain with a more simplified, Better Off Overall Test, that bargaining is cooperative. What we don't want to see is more complexity. What we don't want to see is a system that triggers widespread industrial action across the economy, that's bad for consumers. And we want to see a system that's easy to use, that gets more and more employers and employees bargaining together, making their enterprises more successful and sharing the benefits of that in high wages and better conditions for people.

Matthew: You mentioned there that you want to see people paid better, and I think that is a widely held view, but there would be cynics out there who say, ‘Okay, we're hearing that from the head of the BCA at a time when company profits are regularly under the spotlight.’ People saying that companies have never had it so good. Is it the case of eating into some of those profits to pay workers better?

Jennifer: Sure, but the companies that are making those profits, I think if you check the mining sector, you'll find that people in mining are paid a lot more than people across the economy. And those companies that are making profits, you'll find that they have enterprise bargaining agreements that have got a three in front, and people who are on enterprise bargaining agreements get a $100 a day better off than people who are not. What we want to see is a system that drives people to the enterprise bargaining process that gets enterprise bargaining revitalised. That sees people working together to make sure that people share in the benefits of that. But let me be super clear, you can't pay people more in unprofitable companies, you can't pay people more if companies are caught up in widespread industrial action, whether they're big companies or small companies. You can't pay people more if you don't get the growth equation right in this country. Because anything that you do will be short lived and then we'll see unemployment going up, we’ll see more strikes. So, what we want to see is that careful balance of making sure people's rights are protected, people are back at the bargaining table, people are bargaining in a kind of creative and innovative way where we are taking into account how people want to work in this modern day and age and making sure that both the enterprise and the employees are better off. That is the system we want to see.

Matthew: I want to pick up on inflation because we know how much it hits household budgets, and every time you go down the supermarket, you can just see that straight away. But clearly it would also hit business bottom lines as well. What sort of pressures are there are being experienced in the business sector as a result of this surging inflation?

Jennifer: Well, I think there are two things. It's not just surging inflation, it's big supply chain issues. I mean, if you look at any construction project across Australia, it's dealing with a big problem in terms of getting materials, obviously paying more for materials. Many people have got fixed price contracts. That's putting a lot of pressure on those businesses. So business is feeling the pain too. I think most companies are trying as much as they can not to pass those costs on to consumers. They're very conscious of that. That's the good thing about having competition in the system is that the first step is not to kind of pass that cost on, but people across the economy are feeling this. People across the world are feeling this. The most important thing is that we have stable fiscal policy, stable economic policy that balances those things of getting spending right. Driving those growth leavers and making sure we're doing the reform of government spending so that we are not trying to chase a runaway train.

Matthew: Jennifer Westacott, it’s great to spend a bit of time out here in the gardens with you and avoid the rain.

Jennifer: We did.

Matthew: Thanks for joining us today.

Jennifer: Very good. Thank you very much.