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: Releasing the handbrakes on growth report; inflation; energy prices; labour shortages; migration; regulation; skills shortages; climate targets; Garma Festival; Indigenous Voice to Parliament
Patricia Karvelas host, RN Breakfast: Business is now calling on the Treasurer to boost subsidies for apprentices and upskill workers over 30 before the government's Jobs Summit in September. They want immediate action even before this summit begins. Jennifer Westacott is the chief executive of the Business Council of Australia. She has been in Canberra this week but is now on her way to Garma. Jennifer Westacott, welcome back to breakfast.
Jennifer Westacott chief executive, Business Council of Australia: Thanks very much.
Patricia: The Business Council of Australia has released a report this morning called Releasing the handbrakes on growth. It presents what you call some common sense reforms to reduce economic bottlenecks. How much impact can the government have when so much of the problem is caused by international factors?
Jennifer: Sure, I think first of all, we've got some very difficult numbers in front of us, and we have to remember they impact on real people. The good news is we're in a better position than most other countries, things are obviously forecast to get better. But the challenge is, how do we respond to all of this. Obviously, the Prime Minister's Jobs and Skills Summit is a big opportunity to reset around the big issues. But in the meantime, what we're saying is we should pull every lever that's in our control, to get rid of friction and blockages in the economy. So deal with our labour shortages, deal with our supply chain blockages, get rid of some of the red tape that is stopping getting stuff done. Get on with those things, because it's those, if it when you add up all those little things, Patricia, it makes a big difference to combating a lot of these big forces that, you're absolutely right most of them are international, but there are things we can control and that's what we're suggesting we get on and do.
Patricia: Before we talk about solutions, let's just talk more about the problems for a moment. This week it's confirmed inflation has passed 6 per cent already, it will rise to 7.75 per cent. That’s incredibly high for our country, how much damage will that do to Australian businesses now and over the coming two years?
Jennifer: Look, I think it presents real risks, because people are already finding a lot of difficulties with some of the things I've just talked about - labour shortages, supply chain problems, and so on. But again, we've got to remember that that most Australian businesses are in a much better shape than businesses around the world. They've got stronger balance sheets, the economy has weathered much more successfully. We're still forecasting economic growth. I'm more concerned about small businesses here. Obviously, they've done it very tough during COVID. They were absolutely hammered during COVID. This is why we've got to make sure that we pull the levers that allowed businesses to get back up on their feed, operate to their full capacity, expand and grow. And they are the sorts of things that we've outlined in this document we released today.
Patricia: The Australian Energy Market Operator has confirmed today average wholesale power prices increased by over 200 per cent on the first three months of the year. How much is that hurting Jennifer Westacott, and has enough been done to keep those costs down?
Jennifer: Well, that is hurting and look, I think the government's taken very cautious and very sensible steps here, because again, these things have been driven by in some cases, many factors that are beyond our control, particularly the war in Ukraine. Obviously, there are things that have built up over the last decade or so, in terms of how we should have run the energy system. But I actually feel that the action that the government has taken around the capacity market, around being really sensible with the companies and the action of the Energy Market Operator a few weeks ago. All of those things are going to help. But you know, we're in a very difficult situation, nobody can deny that. The challenge is how do we get out of it. And that's about resetting the big things, but it's also doing some of the little things.
Patricia: Now you've got a list of urgent reforms needed now. You've already given us a bit of a taste, but what's on the top? What do you want to see, for instance, Anthony Albanese, Jim Chalmers do immediately?
Jennifer: Well, there's a few things. If you go to labour shortages, let’s remember what labour shortages are doing to inflation. If you can't get someone to pick your fruit, if you can't get someone to do the work, that just goes straight into shortages and prices. So first of all, fast track visas. Things like extending the hours students can work. Going to four-year visas with a prospect of permanent residency. That is going to help attract people to Australia. We've got to actually rebrand Australia as the place where we want people to come and work. Holiday visa extensions, making it easier for people on a holiday visa to stay and do a range of work. And then for people who are already here, skills packages for people who really need to upskill so they can get into the labour market. Then there's other things around just making it easier to do business. So, paperwork, if you think about something that goes from one country to another, every single time it moves through a system, there is paper that has to be filled out. So, we've said why don't we move to a digital system, that's going to save about $1.7 billion, and that will flow through to reducing prices. We've got to make sure we do things like make permanent across the country the removal of curfews on deliveries. We've got to get electronic businesses happening as a sort of normal part of our business, electronic signatures, and electronic movement of paper. We did all those things in COVID. We've now got to make them features of the economy, because all of these things, Patricia, they just add cost for small business. It's a headache. They're busy doing paperwork, but what they want to be doing is servicing their customers and growing their business.
Patricia: Jennifer Westcott, the pandemic meant we closed our borders to migrants, an important source of labour, of course. How quickly are people coming back? We know the government has told us they inherited a system where there was a huge backlog, they put more staff on, it's a lot about a processing issue here, too. You're arguing that we need to improve Australia's brand? How so?
Jennifer: Well, I think a lot of people, certainly the feedback we hear is that a lot of people are still reluctant to come here. This labour shortage is obviously global, so people have got choices about where they go. So, there's a couple of things that really play out here. First of all, a lot of visas are two-year visas. Now, a lot of people aren't going to uproot their family for two years. And so we're saying, let's have a look at four year visas, and that'll make it more attractive for people. Secondly, and we hear this on the ground all the time, people are anxious still, about are they going to be able to move around the country, and we need to make sure we really give that commitment to people, we're not going to be going back into lockdown, it's going to be easy to get a visa. Obviously, we have got to deal with the backlogs. But we've got to promote Australia, again, as a great place to come and work, come and get a holiday visa, come and study here. Because people are concerned about, ‘well will I be able to move around the country? How hard is going to be for me to get in?’ And then this question of these two-year versus these four-year visas.
Patricia: One skill shortage that you say would make a huge difference if it was solved is more heavy vehicle drivers. How do we get drivers behind the wheel? How do we do it?
Jennifer: Well, there's two things there. One is, we have a time served kind of way of dealing with drivers. So as you move up, obviously, the complexity of vehicles, our system doesn't work on a competency model. We're saying move that in line with international standards. The other thing, Patricia that we're suggesting is that we have a special national push for women to take up driving. The construction company, Hanson has done an amazing pilot of this. Trying to get people into truck driving that would normally not think about it. And that's about skills. It's about a kind of a quick skills package, to encourage women to enter into that occupation. Now it’s a tough occupation driving a truck, but we've got one five trucks off the road. If one of our trucks are off the road, it's something that's not getting to a supermarket, that's something that's going to cost more when it gets there. It's these sorts of practical things, Patricia, that I think would make a big difference.
Patricia: You've been in Canberra this week, has the government shown any interest in moving on those short-term reforms?
Jennifer: Yeah, they have. And look I'll say this. I have been in this job a long time. I can't remember a more engaged new government than this. I've had calls, I've had meetings, people reaching out, ‘what are your suggestions? What do you think we should do?’ That's why we put this document together. Really actively saying, ‘well, we've listened to your request to get ideas back to you, here are our ideas.’ I think we've seen a very active government, and a government really willing to listen to the business community and sort of sort itself out. You can't just kind of jump to knee jerk reactions on many of these things, there are often unintended consequences if it's not thought through properly. That's why we've put this very considered document together with some practical ideas of change.
Patricia: Quite a statement that you haven't seen a government this engaged, really?
Jennifer: Yes I genuinely mean that. I have had call after call after call after call from ministers. Because I think it's a question of circumstances. Well, we're in a very difficult situation, we've got a very volatile global world, we've got a very difficult situation in terms of inflation. I think the government is very clear that the business community has to be part of that solution. I'm very pleased to see that level of engagement. Probably the last time I saw it was when Tony Abbott was Prime Minister. Who was extremely engaged with business. Again, because there were things that had to be fixed. So, I think it's really good that the government sees that the way we're going to solve some of these problems is in conjunction with the business community.
Patricia: Just on a couple of other issues before I let you go. Labor's climate legislation was also introduced to Parliament this week. Opposition Senator Andrew Bragg told us this week he's open to supporting it. He wants to create sort of a business case if you like through the senate committee for the economics of this. Would you like to see bipartisanship on this? Would you like to see the coalition get behind these laws?
Jennifer: We've always called for bipartisanship on climate change. We've got bipartisanship on net zero. That's really important. That gives business a lot of certainty. The parliament will go through a process here of considering the bill and that's correct. But what we want to see is once that's done, that we don't see, you know, weeks of endless amendments. We’ve got a bill that we think is workable, it's practical, we think it's well thought through and we just need to get on with it. We need I think, Patricia to move this country's conversation from the ‘what’ to the ‘how’ and to actually start getting on with things. Business needs that certainty so it can invest. We need to make sure that we get this done as quickly as possible and get on to the harder work of how you actually do this.
Patricia: And just finally, you're heading to the Garma Festival, as am I. This show has been very focused on the Garma Festival today. There are reports that there is growing opposition in the Opposition to a referendum to enshrine a Voice in the Constitution. Are you concerned about that?
Jennifer: I think, we know in the history of referendums is that you need bipartisan support. We've been strong supporters at the Business Council on the Voice. What I'm doing at Garma is obviously listening to indigenous leaders about the design of that. I know you've been speaking to Marcia Langton this morning. We will then listen to those leaders, and then work through what's the best way their business community can help. Secondly, I'm in Garma to make sure that I'm clearer about what else the business can do in terms of lifting people's economic participation. Then finally, I'm at Garma to promote something that I am chairing which is called Studio Schools. Which is a really unique initiative to get young people better focused in the school system. It's like a studio, its on country. It embraces culture, rather than seeing culture as some sort of deficit, if you will. It makes sure that the community is involved in running the school, makes sure kids get the curriculum, as well as practical, workable things. The Yiramalay model that it's based on is a model of incredible success. Where you have got things like 90 per cent attendance. So I'm up there to promote that. But I'm really keen to listen to indigenous leaders about how they want the business community to support them to get that referendum passed.
Patricia: Jennifer Westacott, many thanks for your time.
Jennifer: You're very welcome, thank you.