Event: Business Council chief executive Jennifer Westacott interview with Michael Clarke, ABC North Queensland

Speaker: Jennifer Westacott, Business Council cheif executive; Michael Clarke, host

Date: 3 March 2020

Michael Clarke, host: Well, you've heard of the business lunch. A very special business lunch is going to be happening in Townsville today. It's hosted by the Business Council of Australia alongside Townsville Enterprise and it's called Strong Australia Townsville. Over 120 local business, political and industry representatives coming together to talk about the issues that business is facing in North Queensland at the moment, and how to move ahead. Jennifer Westacott is the Business Council of Australia chief executive officer, and is with me now ahead of that lunch. Welcome.

Jennifer Westacott, Business Council chief executive: Good morning.

Michael: It's good to have you here.

Jennifer:  Thank you.

Michael: I guess, biggest topic at the moment, and you're probably asked about this all over the country, coronavirus, what hit will this mean for business in regional Australia?

Jennifer:  I think it's a big hit across the country. So you can see the numbers starting to play out in tourism, off the back of already a bad summer, in terms of the Southeast coast of Australia, in terms of the bushfires. So it's going to hit tourism. I think it also creates that anxiety in the market. So you can see the stock market really under pressure. This is a world problem. I think the challenge is what do we do about it? How do we get the economy going again and how do we drive business investment, which is really the most serious thing. I think the other point that people have forgotten is the economy wasn't growing fast enough before the bushfires and before the coronavirus. So what has to happen is a really serious effort to make sure that we get some medium term, short term actions to get the economy to grow faster and double down on making sure we look after regional Australia as well.

Michael: How do we do that when there's so much uncertainty at the moment surrounding this virus? We don't know if in a month we might see further measures taken, maybe even schools closed or restrictions on people's travel increased and what that might mean overseas as well, in terms of supplies getting here to Australia. How do we deal with that uncertainty?

Jennifer:  Yeah, look, I think there aren't easy answers to that, particularly on the supply stuff. I think Australians will find out just how much is produced in China and how many bits of things are produced in China, but we have to make sure that we say, "What can we control for?" We can control for how we plan our regions and that's what we're here today. Well, what do we need to do to Townsville to really get it cracking? And there's lots of great ideas that we've already heard about talking to people yesterday. How do we make sure that we keep our economy competitive? How do we remove red tape from things? It's interesting, people talk to me all the time, whenever I visit regional Australia, they talk about the red tape their business is drowning in. So we can control that. We can control promoting Australia and bouncing back, once this virus is contained. And we have to imagine that, we've got some pretty competent people who run our authorities and run world health organisations that at some point this crisis will ease. How do we bounce back in terms of our tourism industry? How do we bounce back from those bushfires and how do we make sure our economy is stronger, that we're encouraging businesses to invest. It's why we're calling for an investment allowance to give people a tax concession on investment so that we can really get the economy moving. And that really matters in regional communities where a lot of businesses say to me, "Look, I've got the demand. I've got enough customers to buy my stuff. I just need a bit of an incentive so I can buy that extra piece of equipment, buy some extra things, then I can hire more people." So we need to have a plan for managing this crisis and we need to have a plan for how we get out of it. And that's about really, really making our region stronger. And that's why we're here today. But there's no doubt this is a very serious problem. There's no sugar coating this. This is a very serious thing that's happening around the world. And of course, it does undermine the confidence of business, which undermines even further the confidence to invest.

Michael: I was talking to an expert in international studies yesterday about this and I said, "Nothing like a virus reminds us so acutely of how global our world is now in particularly our economy."

Jennifer:  Absolutely.

Michael: Is this going to show up some flaws in the system, that maybe we are relying on things too much from overseas. We don't have enough manufacturing here. Will this force a reset, maybe?

Jennifer:  I don't think so. I think the reasons that the world is, it's not just Australia, the world is as it is, is that the way people produce and make goods and services is very different now. And that's about consumers wanting to buy things cheaply and that's the challenge. You want to buy your t-shirts at a shop for two bucks or five bucks. That requires a whole different way of thinking about where they're manufactured. Now people may say they want that answer to be a different answer, but it's not a different answer. That is the answer. I think the other thing that I would want to give people heart, Australia's got a very strong country and a very strong economy. It's not like we're a country that's been in endless recession. We haven't had a recession for 28 years. We are a very strong country so we can bounce back. We're going to get all the policy levers working. I do think people will be surprised how much global interdependencies, but the idea you can just switch that off, I'm not sure that that would be honest to people to say, yes we can start producing these things in Australia, but there are other things we should be producing in Australia and this is my point constantly. We should be, as a country, playing to our strengths, whether it's nationally or here in Townsville. There are lots of strengths here. The defence industry's here, the capacity to train forces here as a very tactical thing. The capacity to do all the simulation work here, the capacity to really ramp up the irrigated agriculture system if we got the Hells Gates Dam going, and produce those very premium products that you can sell into international markets for serious prices. We'll be the beneficiaries of global supply chains, as much as they've disrupted our economy. You can sell a mango in Japan for 25 bucks. Think about scaling that up. So it works both ways. The challenge is to make sure that we make it easier to do business and that we put real effort into places like Townsville, and about 10 or 15 other places around the country, who could actually lift the national economy as well.

Michael: I'm talking this morning with Jennifer Westacott from the Business Council of Australia. She's in Townsville today, ahead of a Strong Australia Townsville business lunch and panel discussion, focusing on the issues for business for Townsville. Had we started to see an improvement for our local economy after the difficulties last year of the floods, of all the problems that came before that, with the downturn, with refineries closing, those sorts of things. Had we started to turn the corner?

Jennifer:  It felt, yesterday, when I was sitting down with Townsville Enterprise and with the council that the corner had been turned. First thing is, there's a really clear plan, a plan for defence industries, there's a really clear plan for what could happen with the irrigated agriculture system if the Hells Gates Dam got up and there's obviously a lot of work now happening on the business case for that. There's a clear plan around the rail line between Mount Isa and Townsville. Now obviously that needs funding and we'll be advocating for that. So, I got a sense yesterday there was a lot more optimism. There was a sense of, we can actually start to control things. I think the other thing that's given the community a lot of confidence, and you were just talking about it, is the concert at the stadium, 20,000 people. Now the challenge is to get a cycle of events and that stadium will bring in a lot of people. And people, we were talking to someone last night who had flown from Alaska to see Sir Elton John in Townsville.

Michael: Did they tell you why?

Jennifer:  No they didn't. I was a bit mystified.

Michael: I am, too.

Jennifer:  That you'd be sitting in Alaska thinking that but the other thing that I want to do off the back of this trip, is to really promote Townsville as an opportunity for people living in Sydney and Melbourne. Because one of the things we heard from Townsville Enterprise yesterday, is that the corner is being turned on unemployment. Now, people are very clear that the unemployment rate is still too high here and youth unemployment is a much bigger problem than the rest of the country. But there are some skills that are needed and there is that need for skilled labour. But what I say to people sitting in Sydney, who are probably sitting on a mortgage that they can't really service over the long period or it's a struggle to service that, the median house price here is just over $300,000. It's a fantastic place to live. Come and live in Townsville, particularly those skilled people who can help with those defence industries. We've got to be promoting regional centres, like Townsville, because they're not just a regional story, they're a national story about how we could make the country stronger.

Michael: Do you have a role to help promote that as well, Jennifer Westacott? How do you do that? How do you get that message to Sydney and Melbourne to come here and help? Because we have talked about that skills shortage in the region, which could be a longer term problem.

Jennifer:  There's a couple of things we do as the Business Council. The first is say to businesses, to the big corporations, "Hey, why don't you think about putting something at Townsville?" The second thing we do is advocate to governments, "Why don't you think about locating some of these things or supporting some of these things in Townsville," so that the City Deal, the deal between the local government, the state government and the Commonwealth government is been reviewed. So, we'll be urging people in Canberra to sort of really think about a longterm infrastructure plan, a 20 or 30 infrastructure plan. And the final thing we try and do is really push hard to get skills reform. You and I've talked about this before. I want to see every Australian with a lifelong skills account where they can go and purchase, not a four year computer science degree, but a micro-credential, as it's called, a module of training. And we've got to change the skill system so that people can rapidly get those skills they need to stay in the workplace. Now, if I were running James Cook University and the TAFE here, and I'm going to sit down with them today, I'd be trying to say, "We are going to offer those sorts of courses." So that if I'm sitting in Sydney, I think, "Yeah, I could kind of do that job, but I don't really have that skill set." But suddenly I can see it on James Cook University website, "Hey, I can get that micro-credential. Gee, I can buy a really nice house for $400,000. Gee I'm going to think about living in Townsville." Fantastic climate, wonderful place, great place to bring up kids. So I'm going to try and promote that through all of the channels that we have.

Michael: So these would be shorter courses, would they? That are very specifically focused on a skill that someone would need to, perhaps, move ahead in a job?

Jennifer:  Yeah, so for example, if you're going to run defence training, you need people who've got autonomous or simulation, for example, in the defence industries. You need people with autonomous design skills. Now, it's a big skill in Australia. We're already amongst the world leaders on that but what we've got to do around, not just here in Townsville, around the country, is stop expecting that everyone's going to go and do a four year university degree. Particularly if they're working and they need to retrain. They need to be able to say, "I need to do a module in autonomous design, I need to do a module in robotics, I need to do a module in artificial intelligence. I don't need to go back and do year one computer science. I need to do these very tailored things." That will allow people to stay working. It will also allow people to upgrade their skills and get better jobs, but you need that comprehensive plan, that's about industry promotion. It's also about skills and training changes that would be also a magnet for people to come and live here.

Michael: Where do you stand on the idea of concessions for living in an area like Townsville, which is still considered a remote locality, but as we're talking about today, universities, stadiums, concerts, all these things that make Townsville feel like a bigger city. Do we just deserve concessions up here in North Queensland?

Jennifer:  I think it depends what kind of concessions you're talking about. I think if you start fiddling around too much with the tax system, remembering that many companies are nationally based, even small companies when they're buying from big supply chains, the idea that the tax rate's going to be different in Townsville to Sydney? You've got to think about the practicality of that. But the City Deal, I think, allows you to create a set of incentives for people to come here. And so one of the things you could do, that would make things a lot easier, is speed up times of planning approval, speed up times for licences, speed up times if I want to change my shop from one thing to another, don't make that a six month process with 450 forms. So there's lots of things that you could do, that would make it easier to do business here and attractive for people to come here. And I think the city deal, particularly on the infrastructure side, is a way of saying, "You know, something we have identified, as a country, Townsville, a place of national significance. So we're going to lay out a 30 year, 20 year infrastructure priority plan, a service priority plan and we're going to make sure that we're part of a coordinated national effort on defence, on tourism." Because, one thing I observe when I travel around to other countries in the world is that they are much better at not having everyone competing to do the same thing. They're better at saying, "Why don't we coordinate for impact?" And particularly on things like events, now with your stadium. It would be good to see some cooperation with the other states to say, "Well maybe we should make sure that that stadium's got four or five or 15 I think is the objective, really significant events." And you can see from the Sir Elton concert, people are going to go to them.

Michael: Interesting you mentioned that because there seems to be a battle on at the moment to get a Jeff Horn boxing fight for Townsville as opposed to Brisbane. And I think that the battle is still happening behind the scenes there. Is that what you're talking about, to get that out of the way and coordinate?

Jennifer:  Yeah. I think sometimes you just got to say, "Look, we need to promote our regional centres more." Brisbane's got lots of activities and they need things as well. But sometimes I think people have just got to cut some slack a bit and say, actually, "Why don't we have that event in Townsville." We got a terrific stadium. We know we're going to get a big crowd in. It's going to bring lots of people to hotels. It's going to bring a lot of services into town. Why wouldn't we coordinate that a little bit more? And whenever I travelled to other countries in the world, you do get that sense that there's a lot more purpose in how people plan for regions, and a lot more purpose about how they plan for industries. I'm not talking about protectionism here, I'm talking about, we are really good at this. So let's get really, really good at this. A lot more purpose in how they run their skill system and a lot more purpose in this sense of where certain places are going to lead.

Michael: Well I note with interest that on your, on the bill today for discussing these issues of business, you have the CEO of the North Queensland Cowboys. How crucial does a sporting team or franchise become in generating further business for a region like Townsville?

Jennifer:  Huge, because all of those matches, the home games, are obviously going to attract big crowds. But having those iconic teams that are part of those regional centres, it's hugely important. It's hugely important because it brings, apart from the spirit of supporting your team, it does bring a lot of business activity. And I always see sport, apart from it being a huge part of Australia's psyche and culture, but we're not the only country on earth like that. But I do see it as, it is really important for business to think about how those teams generate activity, generate a sense of pride, bring in other events. And then of course, I think, when we were at the stadium yesterday, there's a training facility being planned there. That brings another set of construction. That brings more jobs. So all of these things, it's not one thing that changes the economy. It's lots of little things, sport's crucial to that.

Michael: And Jennifer Westacott, to drive the Townsville economy in particular, and you touched on this before, the high youth unemployment, do we need to see, as a way to generate the economy, a bit more, perhaps an increase in things like new starts, allowances, welfare that we see or even the minimum wage?

Jennifer:  Well, I think, I'm on the record for a long time saying the Newstart allowance, particularly for single people, is too low. People can't live on that amount of money and it has to be done, though, as part of fixing the way we deal with unemployment. So what are we doing to retrain people? What are we doing to get placements with companies? What are we doing to make sure that we support people in those placements with companies, and be they big or small, doesn't matter, so that they don't drop out of the workforce three months, two months into their first job or back into the workforce. We've got to do more to support people who are very vulnerable to being unemployed for long periods of time. So it's got to be part of a bigger package. The minimum wage I think has got to be thought about more carefully, and this was talked about as you know, during the election. We've got to think about it in terms of how do we get wages up overall, across the economy, and then making sure we set the minimum wage based on two things. What's the capacity for the economy to support it? And very importantly, what is a sensible living condition for people in this country? My view, though, is that we've got to do more to lift wages across the economy. And that's only going to happen by companies investing. That's only going to happen by increasing what's called productivity. That is the efficiency with which they produce and do things. And that's only going to happen if companies invest and it's only going to happen if we retrain and re-skill people. So my issue with that 17 per cent youth unemployment is, what are we doing on the skills front? What are we doing on the workplace front? What are we doing on the job experience front? What are we doing to make sure those young people, when they're placed in a job, are looked after. So they stay working and they get that 26 weeks and they get onto permanent work. But there's no easy fix to that.

Michael: The events are happening today. Strong Australia Townsville business lunch and a panel discussion, they're taking place later on today. Jennifer Westacott, from the Business Council of Australia. Good to talk with you. Have you had a look inside the stadium yet?

Jennifer:  I drove around it yesterday. Haven't gone in. I'm going to try and sneak over there today to day and get a look in, but it looked terrific.

Michael: Should have come up for the weekend, for the concert?

Jennifer:  I should have. But when you're looking after a little boy whose got a cricket obsession, you've got to turn up to the game. You can't get away, you see. But it looked terrific and everyone said the concert was fabulous and Sir Elton was fantastic and the vibe was great. And it proves that, if you build it, they will come.

Michael: It certainly did on the weekend. Good to talk to you this morning.

Jennifer:  Thanks very much.