Event: Jennifer Westacott AO interview with Patricia Karvelas, RN Breakfast, ABC Radio
Speakers: Patricia Karvelas host, RN Breakfast, ABC Radio; Jennifer Westacott chief executive, Business Council of Australia
Topics: B20/G20; China; trade sanctions; multiemployer bargaining

E&OE

Patricia Karvelas, RN Breakfast Host: Jennifer Westacott is chief executive of the Business Council of Australia and has just returned from the G20 in Bali. She joins us on breakfast. Welcome to the program.

Jennifer Westacott, Business Council chief executive: Good morning.

Patricia: You've been part of these international meetings in the past. Was there a different tone towards Australia in your view?

Jennifer: Oh, very much so. I think we have seen what I call a kind of reset, particularly in the Pacific, particularly on climate, particularly in countries like Indonesia and India where we are deepening and deepening those relationships. And of course, reestablishing a dialogue with China is a hugely important thing. Now, this is a very complex relationship. It's a difficult relationship but getting the dialogue back on track is the first step in what's going to be a step by step process to reestablish a lot of connections. That's a very big signal to business. It's a big signal to the rest of the world. But Patricia I got a sense of a really different attitude towards Australia, a different sort of perception of our place in the world. I was very proud to be part of the biggest business delegation there, which was the Australian business delegation. I think there was a different view about us and our place in the world. And I think the Prime Minister and the Foreign Minister have done a terrific job of doing that reset. Now, of course, the China relationship is a more complex one, but starting that dialogue, you can't underestimate the signal that sends.

Patricia: And what's your analysis of why now? Is it just because China is looking to reengage or is there something specific about the way this new government has operated, which you think has been the change here?

Jennifer: Look, I think it's probably a combination of all of those things. I think it’s a different tone. I do think, just at a practical level, people being able to meet face to face makes a big difference. As we all know in our own personal lives, being able to see people personally makes a big difference. I do think that it's probably a combination of those two things that you've just said, but it's very important. Now, I think people have got to be careful about how quickly this can then go forward. We'll be then working, obviously with the government in tandem and always staying within those boundaries of what I call principled realism. The government and the former government, I think have always been very clear about this, that we're not going to give up our sovereignty, give up our values, but we have to be realistic. This is our largest trading partner. It's a hugely important part of our economy. Our economies are very complimentary in many respects. There's tremendous opportunities for Australians there. We need to make sure that whilst we diversify into other markets, we don't forget that this is a hugely important market. It's not about doing things away from China, it's doing things in addition to China. But we're going to have to go step by step here. It's a complex relationship.

Patricia: China has blocked, of course, $20 billion though trade sanctions on Australian industries. How much of that investment do you think can come back and in what timeframe?

Jennifer: Well, I think this is obviously going to be the next steps in the relationship, and we'll be looking to reestablish some of those broader business to business relationships. And hopefully on a step by step basis, some of those sanctions get removed. But I don't think anyone has got a kind of window into when that will actually happen. I think that's going to be the very careful behind the scenes negotiations, step by step as we reengage with China, but in a way that kind of stays within those boundaries of principle realism, as I've talked about. I don't think anybody's got that timeframe, certainly not people like myself, but I don't think anyone has to be honest. I think this is going to be a very careful re-engagement, very careful and bit by bit. But obviously we want those trade sanctions removed. We want as open a trade relationship as possible within the kind of rules of the world trade system, within the kind of world order of trading.

But you know, you can't underestimate the importance of starting that dialogue this week. You can't underestimate the importance of Australia being a very prominent player in all of those meetings this week. And you can't underestimate the kind of talk behind the scenes, certainly by the business community at the B20 of how Australia has done that big reset. And how, particularly on climate, obviously the B20 talked a lot about sustainable growth, how much people look to Australia to say, well now what's Australia doing? What's Australia's policy landscape? What’s Australia’s policy scaffolding? That's the kind of conversations I was involved in and Australia is held in very, very high esteem.

Patricia: Let's move to domestic matters. The government is looking to legislate changes to industrial relations law. It says if they get through Australian's wages will go up. Do you think that's true?

Jennifer: I don't think that bill in its current form will lead to that. Let me give you three reasons for that. To be fair to the government let's be clear, we are working really constructively with the government, we're working constructively with the crossbench. I think everyone wants Australian's wages to go up. I don't think the legislation in its current form is going to do that. And let me give you those three reasons. The first is, we still don't believe that there is a smooth enough pathway for people who are currently in the enterprise bargaining system, which as we should remember people are paid on average a hundred dollars a day more than people on award. We still don't think the system is smooth enough to allow people to keep bargaining. So you've got this six month grace period, but most people doing bargaining know that this takes a long time. So we would like that grace period to be longer, because what we don't want is a kind of culture of brinkmanship where people sort of run that six months down.

Patricia: Sure. But if you make it longer, if we're going to use your logic of running time down, you'd just run down the new timeframe, how does that change it?

Jennifer: Well, we want to see obviously that period longer, but we want to see a kind of much clearer kind of restatement of the objects of the act that the single enterprise system is a system that we want people to use. We want it to be much easier for people where they agree, they just keep bargaining. The second thing we're really concerned about is the kind of expansion of the multi-employer agreement. Remember at the Summit, at the Jobs and Skills Summit, this was very much about low paid workers. So our argument is, well, why wouldn't you just fix up that low paid stream rather than what we are currently doing, which is, well, we have to carve this sector out. The third issue, and this is more complex, is that in the current proposal, and we're very worried about this, big employers could be forced to bargain together and that is not good for wages Patricia.

Now I represent these companies, but it is not a good thing for the big employers to be forced to bargain together. That's not going to be good for small business, that's not going to be good for innovation, that's going to be anti-competitive. I don't know why this is still on the table because I understand what the government's trying to solve, they're trying to solve wages in the low paid sector, but the better way to have solved that would've been to fix the low paid sector to obviously do the better off overall test, which we're very supportive of in the bill, and to do the supported bargaining stream, which we are very supportive of.

Patricia: Okay, so let me just go to some of the points you've made. Because you talk about it should just be about low paid workers. In fact, Tony Burke spoke at the National Press Club this week, and he addressed this very criticism and said on that issue, he doesn't want it only to be about low paid workers because it's not fair for other workers who also want to push for wage increases, right? And so if you just talk about that stream, don't you lock out the many Australians who you might say you want them to get pay rises, but they're just not Jennifer Westacott. It's not happening. You can use all the language you want, but it's not being delivered under the current system.

Jennifer: Well, let's just break that down in a little bit because the best way for those workers to get paid more is in the single enterprise agreement stream. And what we want to see is a bit more work in that stream that makes it easier. So what we don't want see is that the first discussion you have is who you're bargaining with and that goes on for months, and then the Commission has to step in and decide who's at the table. So we don't want that. That's not going to get people their wage rises as faster. That's going hold it up for months and months and months. I mean, at this rate the Commission is going to have to have 10,000 people working there. That's very complex. I want people to have their wage rises faster. The way it's currently written is that we see that there's going to be a lot of complexity about, well, who's in those multi-employer bargains? Who am I bargaining with? Who makes that decision? Who initiates that? So that's complex, that's the first thing. The other issue is why are high paid workers in this system? Now we've got construction out, we agree with that, but why is mining still in? That's a big problem. The best way to get wages going up is to make sure that the single enterprise system, the system that's delivered people on average a hundred dollars a day more, is easy to use, is not gamed and is open to more. I agree with you, it should be open to more people but this is, in our view, not the way to do it.

Patricia: Let me just ask you this, just a couple of specific points. It looks like David Pocock is pushing now for his support for a statutory review after 12 months. Would you support that? At least that lets you see how it works…

Jennifer: Absolutely.

Patricia: If these laws pass by the end of the year.

Jennifer: Yeah, absolutely but there's got to be more than that, Patricia. So we worked extremely well, not just with Mr. Pocock with but with Senator Lambie and her team. There is a really strong concern in the crossbench about particularly the impacts on small business. So there are other things that we think are important. We don't think the threshold for small business is right.

Patricia: What should the threshold be?

Jennifer: Well, we think it should be about a hundred people because if this going to be more complex...

Patricia: That's not small, a hundred, is it?

Jennifer: Well, if you look at the tax office's definition of small business, it's very different to the Fair Work Act definition. It'd be great, of course, if we had one definition in Australia but 15 workers, I mean, that's a pretty small business. You're not going to have a HR department. I mean, when you've got more complexity, so who's going to be at the bargaining table? Who am I bargaining with? Who makes that decision? Suddenly you're going to need more people working in the HR department. If you've got 30 people, you're not going to have a big HR department, are you? I mean, you're just basically trying to run your business. So he's asking for a bigger threshold. I agree with him about that. I agree with him about the statutory review, and that's a good thing for complex legislation. But the most important thing is that we get some amendments now that take out the worst aspects of this. Because what we are concerned about is that people won't get their wage rises and that we'll have widespread industrial action.

Patricia: I suppose the problem is that they're not getting them now, which is the point. I just need to move to one other point if I can, just because my panel's waiting and I'm really, I'm short on time. It’s just an important question. I think Anthony Albanese referred to himself as being the closest person in the parliament to business. Is he still?

Jennifer: Yeah, we have a terrific relationship and I was very proud to stand up with him in Bali and do a press conference and talk about the huge things that the government is doing.

Patricia: So he hasn't broken your trust?

Jennifer: No, not at all. I mean, the good thing about this Prime Minister is that he will kind of listen to what people are saying. And to be fair, and I always try and be fair about these things and not make them sort of be political things, people are trying to work through this. We've got to keep trying to work through and make sure we don't end up with something that has unintended consequences of delaying people's wages, causing widespread industrial action. That's not what anyone wants. Nobody wants that. Australians don't want that. We've got to try and work it through. And this is a Prime Minister who will listen, who will engage with you. He does understand that if you want a job, you've got to have a boss and if you've got to have a boss, you've got to have a successful business. He gets that. We're going to try and keep working this through. But at the moment, the way it's written, it's not going to deliver the things that people want. And I think it will have a lot of bad unintended consequences.

Patricia: Jennifer Westacott, thanks for joining us.