Event: Jennifer Westacott interview with Patricia Karvelas, ABC RN Breakfast
Speakers: Patricia Karvelas host, RN Breakfast; Jennifer Westacott chief executive, Business Council of Australia
Topics: The Prime Minister’s business leaders’ delegation to Indonesia; trade; investment; interest rates; wages; jobs summit; energy prices

E&OE

Patricia Karvelas host, RN Breakfast: The footage of Anthony Albanese and Joko Widodo cycling around the presidential palace in Jakarta has been a highlight of the Prime Minister's visit to Indonesia but there's been a lot more happening away from the camera. Accompanying the Prime Minister and other frontbenchers on the trip are nearly a dozen high powered business leaders including the bosses of Wesfarmers and Telstra and the Commonwealth Bank. Also in Jakarta is the head of the Business Council of Australia, Jennifer Westacott, who has risen very early to speak to us. Jennifer Westacott, thank you for your time.

Jennifer Westacott chief executive, Business Council of Australia: Good morning, it is very early but I have been listening to the mosque in the street which has been lovely.

Patricia: It is a lovely sound. The PM met with the President yesterday but what are you and other business leaders during the visit?

Jennifer: Well, it’s a very important trip and we have been well received, as the Prime Minister has also been magnificently received. This is going to be the fifth largest economy in the world and it's right on our doorstep. There are huge opportunities for Australian businesses, which means there's huge opportunities for Australia's economy and wages and jobs in doing more with this market, whether it's clean energy, whether it's traditional sectors but also things like education. We've been sitting down with business leaders here, working out how we can actually improve cooperation, improve that level of investment, and that will be of mutual benefit to both countries. It was great to sit down at breakfast with the PM yesterday. I think this is part of the reset that we're going through as a country. It doesn't matter what side of politics you are on, we are resetting as a nation since the election. You know, resetting our relationship with Southeast Asia, the important work Penny Wong is doing in the Pacific. Then domestically, on advancement of women, on climate and energy, on integrity in government, on the indigenous voice – all are good. To us, there was more to us being here in Indonesia than trade and investment, it was about resetting Australia's direction.

Patricia: What message is Australia trying to send not only to Indonesia, but China by bringing this delegation to the bilateral meeting?

Jennifer: Well, I think first of all, we're engaging with Southeast Asia. We're engaging at a government level, at the business level, we see the opportunities to diversify our supply chains to diversify our markets, diversify our products. And all of that just strengthens our capacity to trade in this incredible region, which is going through this big change in its middle class, you know, over 3 billion people will be in that middle class by 2036 [inaudible].

Patricia: I’m going to interrupt, Jennifer we will call you back. We’ve got a scrambled line, which occasionally happens with these international connections. We'll get Jennifer Westcott back on the line. So that you're able to actually decipher what she's saying. It's a wasted opportunity to have her on and for you to be frustrated trying to listen to her. You're listening to ABC RN Breakfast, Patricia Karvelas with you. We were talking of course to the Business Council of Australia chief, Jennifer Westacott. Who is one of the business leaders who has gone overseas to Indonesia, to Jakarta with Prime Minister Anthony Albanese to send a signal to Indonesia that Australia takes this relationship very seriously and wants to build on those ties. I understand we've got your back, Jennifer Westacott, is Indonesia potentially I suppose an alternative trading partner to China I mean, given the opportunity there, how can we build that?

Jennifer: Well, I don't know if it's an alternative, I think it's an additional opportunity. And it's about diversification. It's about doing more, look there's lots of opportunities. We met with the Investment Minister yesterday. He took us through a really comprehensive overview of what the investment opportunities are, be it in education, be it in clean energy, in food production. There are tremendous opportunities for those value-added industries in Australia, but we've got to get in on the ground. We've got to build partnerships with other companies, we’ve got to build partnership with local business organisations. And that was the point of yesterday, having those meetings, starting those relationships, but also remembering that many Australian companies already had deep connections with Indonesia, and they've been here for a long time.

Patricia: The Albanese government has inherited a solid relationship from the Coalition which inked a long awaited trade deal with the world's largest Muslim democracy and forged closer strategic ties. So, in terms of developing that relationship, I know that business has said it's kind of frustrating doing business in Indonesia. Has that been expressed in these meetings and what kind of response have you got?

Jennifer: I think it has been but what has been impressive is that there was a clear recognition of that by the Indonesian government, a lot of important steps have been taken. One important step is the creation of a sovereign wealth fund, which can actually sort of be if you will, the facilitator of investment between, say an Australian company and an Indonesian/Australian enterprise or an Indonesian company. So, they've taken steps and they certainly hear messages around the regulatory system, around the integrity of the regulatory system. So those messages are heard loud and clear, and there were very concrete actions coming out of our meetings yesterday. Let's get together. Let's identify the opportunities and let's work through how we bring them to life.

Patricia: Just changing the topic but a very important one. The Reserve Bank Board is meeting today, and another rate rise on the cards. What will a rate rise mean both for households and business confidence?

Jennifer: Well, I think this is inevitable. So, I'm not sure that businesses weren’t expecting it in respect of confidence, but clearly it puts more cost-of-living pressures on households. These things all expose Patricia something we've been talking about for a long time as you know, our wages have not kept pace with inflation, and we need to do the hard yards now on lifting the wages of Australians. And that's just not one-off fixes. That's the hard work of lifting productivity. We're hoping that's what the Economic and Jobs Summit will really focus on. But you know, there's no doubt Australian households are going to feel the pressure of another rate rise, but we've got to start really doing that heavy lifting on getting people's wages up.

Patricia: And that heavy lifting, of course, is going to happen on the first 100 days with this big summit being organised for business and unions to try and come up with something that looks like a bit of an accord perhaps maybe? What should be on the table in those discussions?

Jennifer: I think everything that links to productivity to use that expression. Which is really, how do we get our skill system working so that people can get the new jobs, that we can attract the new industries that are going to deepen and diversify our economy. How do we get our enterprise bargaining system, our industrial relations system working properly, working in a cooperative way, working in a respectful way. The Enterprise Agreement system has been the foundation for higher wages in Australia and we need to get it back on track. Obviously, we need to be looking at things like migration and what's the right mix between skilled migration being brought into Australia, which is essential if we want to do that technology and knowledge transfer. As well as how we make sure that Australian workers have got access to jobs. I think the crucial thing is to make sure that the hard work is done in advance. But not too many things. You can't solve everything at a summit, and I think we've seen that in the past where we try and sort of boil the ocean and you end up doing very little. So, we are willing to put some really heavy lifting into this because I think it's a huge milestone in Australia to identify those detailed things that we need to do to lift productivity, to lift investment, but to make sure that at the same time the wages of Australians are going up.

Patricia: Now, in its submission to the Fair Work Commission, the government argued minimum wage workers should get a pay rise of 5.1 per cent in line with inflation. It's not suggesting that be extended to workers on higher awards, but is business comfortable with that position?

Jennifer: I think it'll be up to the independent umpire to make a determination and it will take a lot of things into consideration. I think there's no doubt that we all believe that particularly people in the minimum wage, need some relief, they need some assistance. But I'd go back to my point that that's only one part of the equation. The really crucial part of the equation is to now do the work cooperatively with the union movement to lift our productivity, so we get wages across the economy at a higher level and, and we're able to sustain them at a higher level and make sure that in doing that we continue to keep unemployment very low.

Patricia: The nation is of course grappling, as we were discussing before the news, with these high energy prices. Tomorrow there'll be a meeting between energy ministers, what damage is being done to business and what do you think is the solution to try and resolve this?

Jennifer: I think that it's a very complex set of issues. We've obviously got the international issues. I think we've got the culmination of some things that we have and haven't done which all of us have been warning about for many years. The failure to get the National Energy Guarantee up, the lack of clarity on investment signals, I guess the kind of concern about gas, which has resulted in some particularly unhelpful supply constraints such as moratoriums. What I think we have to do Patricia, is a few things. The first thing is we must not allow this to become another political bun fight. This has got to have calm heads; fact-based decision making and do the things that we can actually do. The second thing is that we've got to get those energy market regulations, that kind of capacity market discussion around how do you actually make sure that the market is working effectively. Particularly getting that dispatchable power that firms the system to use that technical language. The third thing we need to do is to make sure that we manage this transition to a net zero economy really carefully and gas is part of that. Surely this discussion is showing that gas must be part of that. We must continue to focus on getting our supply right and getting our infrastructure right. Then finally, we need to make sure that we get on track to do the work on reducing our emissions, using the government's target, using the mechanisms that they’ve proposed, which we’ve supported it and doing the hard work of actually getting it done. Rather than having these political blame games that I think aren’t particularly helpful. I think the incoming government has been very careful in its decision making around gas, it's been very prudent it's worked very well with companies. And that bodes well, I think, for very sensible outcome.

Patricia: Thank you so much for joining us, Jennifer.

Jennifer: You're welcome. Thank you.