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: Business Council 2023-24 budget submission; interest rates; migration; skills; housing
Patricia Karvelas host, RN Breakfast: Jennifer Westacott, welcome.
Jennifer Westacott chief executive, Business Council of Australia: Good morning.
Patricia: We're going to get to the budget in a moment. But let's just start with interest rates. We know at least one more rate hike is highly likely, but one economist is predicting four by August. Are you worried about how high the RBA could go?
Jennifer: Yeah, I think everyone is worried about that. Obviously, the runway that people talk about for moderate and low income households, that have mortgages, comes under a lot of pressure. And, clearly, that's going to put a lot of pressure on those households. So look, I don't know, I think only the Reserve Bank knows what it's going to do. But clearly, we haven't finished with interest rate rises yet.
Patricia: Now, you want the Albanese government to deliver a credible long term fiscal strategy to drive economic growth and lift productivity. What are the immediate things you want them to do in this budget to achieve that?
Jennifer: Firstly, we've really got to make sure that we're driving economic growth because that's the ticket to higher wages; that's the ticket to getting the budget under control; that's the ticket to higher living standards; and there is a couple of really immediate things that need to be done. First of all, we've got to drive business investment harder, it's the ticket to doing this, and that's about making the tax system more competitive with the introduction of an investment allowance. Things like getting people working to their full potential, which is about women's participation. Getting people the skills they need. It's also, Patricia, some of the micro-economic reform we think that’s long overdue around the regulatory system, to remove the red tape that's holding back a lot of businesses, particularly small business. Then there's two other things we call for. We do think that the fiscal rules if you like, need to be tighter, they send very important signals to markets, we thought they were a bit loose in the October budget, and particularly that cap on real spending, which obviously, is a guardrail and governments have to respond to circumstances. But we need some discipline back in. Then finally, we call for the government to continue and, in some cases, to begin the process of really looking at how we improve the delivery of government services, not by cutting costs, but by investing in technology, by improving outcomes for people, by coordinating better across the Federation. We believe those three things together will deliver a much stronger budget, a much stronger economy.
Patricia: The Treasurer Jim Chalmers released an essay this week, which called for values-based capitalism. Is this an idea you want big business to get behind?
Jennifer: Well, I think it's important to say, if you look at the mission statement of the Business Council, and you look at the purpose of most companies, many people, and I look at our own values document, Patricia, which says we share some of the values that he's talking about. We want Australians to have higher wages, we want people to have opportunity. We want the country to be more dynamic, to be at the frontier. We want to make sure that people aren't left behind. So we agree with that, and we agree with him that the country's success will depend on how it tackles the clean energy transition, how we adopt digital, how we embrace new technology, how we access those markets in Asia and how we make sure that we get some industries like critical minerals and modern manufacturing going. Our point of difference, I guess, is that we believe that it's the private sector who has to drive that, it is the private sector that's responsible for the bulk of jobs. It's the private sector that will lead that charge, obviously, in partnership with government. And we believe it's a market economy that will deliver that, and it is a market economy that's delivered Australians incredibly high living standards. We don't think the system needs reinvention. We think the system needs reinvigoration. We haven't done the reforms that need to be done. We haven't really looked at tax reform in a comprehensive way, as Ken Henry suggested years ago. We haven't looked at the Federation. We haven't looked at migration, we've got a very constructive review underway at the moment by the government. We haven't looked at the skills system properly. So, we believe the system needs reinvigoration. But we still believe it's the private sector that has to drive that, the sort of living standards that they've delivered over the last 50 years in particular in Australia.
Patricia: The BCA is calling for Australia's migration, you mentioned migration there, intake to be lifted annually in line with GDP growth, should it also be linked to housing supply given the crisis we're seeing across the housing market?
Jennifer: Yeah, I think it's the other way around. I think housing supply should be linked to migration as well as new household formation. In the UK they did an amazing review of this years ago, where they came up with this idea of what the net addition to stock should be. I don't know if you remember the old Housing Supply Council, which was set up to sort of guide governments in how much land they should be releasing, how many new approvals they should be doing. We need to make sure that in tandem with increased migration runs very good planning around housing, but not just housing: service provision, health, education and so on. We've got to run those things hand in hand. So I put it the other way around.
Patricia: Thank you so much for joining us, Jennifer.
Jennifer: You're very welcome. Thank you.