Event: Jennifer Westacott interview with Michael Rowland, ABC News Breakfast, ABC
Speakers: Michael Rowland host, ABC News Breakfast, ABC; Jennifer Westacott chief executive, Business Council of Australia
Topics: 2023-2024 budget; debt; surplus; skills; growth; tax cuts; budget deficit; JobSeeker
Michael Rowland host, ABC News Breakfast, ABC: Jennifer Westacott, the chief executive of the Business Council of Australia. Jennifer good morning to you.
Jennifer Westacott chief executive, Business Council of Australia: Good morning Michael.
Michael: Thanks for joining us. I want to start with the budget surplus $4.2 billion forecast for this financial year. Does the government get a tick for that?
Jennifer: Absolutely. It is great to have the budget in surplus. It gives confidence to markets. It gives us resilience in the future. Overall, I think this is a solid budget given where we are. The issue is it is a missed opportunity to tackle productivity and investment and that’s going to give you stronger budgets, going to give you a more sustainable surplus in the longer term. On the plus side you’ve got obviously the return to surplus which is good. But that is off the back of higher company taxes, higher income taxes, which is externally driven through commodity prices, a strong labour market. But there are some other good things, good growth around energy efficiency and big energy stuff around hydrogen. Good stuff on skills, stronger migration, small business package. Very good stuff on cost of living relief, JobSeeker, energy efficiency and Medicare. Terrific stuff on Medicare. The big risk in the budget is this, we have put in place some higher structural spending off the back of temporary and potentially volatile revenue growth and against the backdrop of a really feeble 1.5 per cent GDP growth rate. We have got to lift our effort on growing the economy, lifting productivity.
Michael: Also, something needs to be done more broadly about the structural deficit. The Treasurer last night was talking about yet to be announced difficult decisions in the years ahead. Do you think they squibbed their chance to tackle the structural deficit issue last night?
Jennifer: I think there is a missed opportunity on two fronts. The first is the stuff I’m talking about around growth and productivity because that is what does the heavy lifting. Business did all the heavy lifting last night and there is nothing there to drive our investment against the backdrop of other countries who are pushing hard into this. The hard work to be done is fixing and reforming government services. By that I mean not cost cutting but going to digital services, getting improved outcomes for people, making sure that we slow the rate of growth in these services, that they are efficient, that they are effective for people and fix all of the issues in our federation. No one is pretending those things are easy to do, if they were easy people would have done them. It is that combination of harder work on growing the economy and reforming government services. That is what will get us into a sustainable budget position.
Michael: For as long as we have been talking on these budget mornings, and there have been quite a few budget mornings we’ve talked, you have been calling for JobSeeker to be increased. So, you are happy with what is an albeit limited increase, but an increase nonetheless?
Jennifer: It is a limited increase, $40 a fortnight, that will be welcome to people. I think the government has taken the right steps here. A modest increase. Because what we’ve got to do is to actually fix the job services system. We send people for jobs that they are not going to get. We need to target that foundation skills package that is in the budget, which is really welcome to the people who have got very disadvantaged job seekers or that have been on JobSeeker for a long time. There is nearly 40,000 people Michael, who have been on JobSeeker for 10 years. Something is wrong in that system given that we’ve got this very, very competitive labour market, very tight labour market. Why aren't those people able to get work? We need to assist them and get the incentives right. That is where the effort needs to be now. Get that system working. Increase the JobSeeker allowance but that system needs to get fixed.
Michael: We found out last night that the cost of the stage 3 tax cuts is going to be $69 billion over four years, that is four times the $15 billion cost of living package. There is something wrong with that picture, isn't there?
Jennifer: No, I don't think so at all. The budget demonstrates why you need the stage three tax cuts because it is bracket creep that has done the heavy lifting as well as company taxes to save the budget. That is money that is not going into peoples' pockets. Bracket creep is the silent tax for people doing a bit more, getting further ahead. These people are also experiencing those cost of living pressures. Those people are experiencing the higher energy costs, the higher housing costs. This was also really important reform. This was about simplifying the tax system so that 90 per cent of taxpayers paid less than 30 per cent of tax. That’s a massive simplification and it gets rid of that silent tax of bracket creep. It is legislated. I think it would be most unwise to do anything to those stage three tax cuts because once again we will squib at fixing our really poor performing tax system.
Michael: Finally, are you happy with debt levels? Still very high but not as high as they would have been.
Jennifer: I think the government should be congratulated for that. They have shown some proper fiscal restraint. They’ve banked 82 per cent of those savings they have made onto the bottom line. That’s all good, that has reduced the debt exposure. But we are still paying $60 million a day just on the interest bill. Think about where that could go in terms of services to people, benefits to the taxpayers but that is going to be solved by getting the economy to grow faster. If we can get it up by 1 per cent, if you look at the forward estimates, you would have the budget back in sustainable surplus and that is the ticket to higher wages, that is the ticket to better living standards.
Michael: Jennifer Westacott, on a personal note, you are stepping down as the head of the BCA so this is the last of our dozen or more than a dozen frosty chats on a Canberra morning after the budget, so I appreciate all of those.
Jennifer: I do, and hopefully in 15 years the ABC will have a studio that they can do these budget things in.
Michael: Jennifer, thank you so much.
Jennifer: You’re welcome Michael, thank you.