Event Jennifer Westacott interview with Robbie Buck, ABC Sydney
Speaker Jennifer Westacott
Date 8 May 2018
Topics Budget, company tax, income tax cuts, For The Common Good
Robbie Buck, host: You have seen over the last few weeks that the Business Council of Australia has been running several campaigns around what they would like to see in tonight's Budget papers. Well we were contacted by Jennifer Westacott the chief executive of BCA. She wanted to state her case and we thought well why not? We're happy to hear that. The BCA argues that the Budget is benefiting from revenue gains flying from higher commodity prices that are boosting company profits but this spike may prove short lived and they have of course been arguing for cuts to corporate tax rates. So, what's the justification for it? Jennifer Westacott, good morning to you.
Jennifer Westacott, chief executive Business Council of Australia: Good morning.
Robbie: Okay, give us the pitch.
Jennifer: Well, I think what this budget will show tonight is that companies, when they increase their profits, when they increase their activity, stronger revenue flows to government and that allows us to put back into the community. It allows us to -
Robbie: You're saying that if there are corporate tax cuts, that's what is going to happen?
Jennifer: That's what's happened every time it's been done.
Robbie: Where abouts?
Jennifer: People confuse this issue. It's happened in other countries. It happened in Australia. The last time we lowered company taxes, company activity increased and their profits increased.
Robbie: The campaign was somewhat hampered by that internal polling though, which suggested that most of your members weren't going to hand it down to wages.
Jennifer: Well what it said was that they would reinvest. It's really investment that drives more jobs, it's really investment that drives higher wages. 30 per cent of them said they would put people's wages up. Now, if 30 per cent of Australian companies -
Robbie: Yeah but that was less and a third.
Jennifer: But if 30 per cent of Australian companies put wages up, that's actually, Robbie, a big impact on the economy. But, we've always argued, as have all of the economists, that it is investment that we need. Investment is low. It's as low for the non-mining sector as it was in the 1990s, when we were in recession. It's investment. Even the Labor Party says investment is a big problem. We have to get investment going and it's investment that drives job creation, it's investment that drives the conditions for higher wages. Because, how do people get higher wages? Their companies succeed, their companies are more profitable, their companies do more, they can create better jobs, they can give people more hours, people who are not working can work because there are more opportunities. What this budget, I think, will show from all of that's been in the media so far, is that when business thrives we can put back. When business thrives we've got the capacity to do things like lowering the middle income tax cut.
Robbie: Do you concede though that it is a tough environment to be selling this at the moment?
Jennifer: Of course it is a touch environment.
Robbie: Let me just finish, we are being told repeatedly that big business, and this is particularly international business, has been siphoning a lot of its profits offshore, not paying the tax that it should have been paying in the past.
Jennifer: It's highly -
Robbie: It's highly what?
Jennifer: It's a highly contested space. But let me just go through it.
Robbie: No it's not. We've seen again and again.
Jennifer: Well show me the evidence.
Robbie: We’re looking at tech companies, at resources companies.
Jennifer: Which ones?
Robbie: Google and Facebook. We've spoken to the ACCC about this just recently.
Jennifer: Look, these companies. It's interesting, Google has just recently agreed the taxpayer transparency code.
Robbie: Yeah but that was only because of a senate inquiry where they had to front up and there's been a lot pressure on them.
Jennifer: But let's unpack this properly.
Jennifer: First of all, Australia's tax commissioner, Chris Jordan, says Australia has the highest compliance rates among the developed world. When he's asked do you need more laws? He says no. We want companies to meet their tax obligation. We want them to pay their tax. We want multinationals to meet their tax obligation. That's why we -
Robbie: Okay, are you suggesting that Chevron has paid all the tax they should have paid in Australia?
Jennifer: But they have had...this is not my claim. My claim is that companies should pay tax. And companies should sign the tax transparency code.
Robbie: The point for saying that is that it is a very difficult climate in which to be staking your claim. It's not just the electorate that says that, it's also some of your colleagues. I mean, Elizabeth Proust is the chair of the Australian Institute of Directors, she is quoted as saying the BCA, your campaign for company tax cuts, is highly unlikely to be successful.
Jennifer: Well let's see. I mean, you know, first of all I don't think she has any idea what our campaign is. She confuses the campaign we're doing on tax with our other campaigns to promote the community's understanding of the role of business - as the employer of 10 out of 12 million working Australians. 10 million of the 12 million working Australians who are employed by business. That’s what our fundraising is all about. And people have said the first trunch of taxes wouldn't go through. They did go through. People said that the government couldn't get anywhere near this. They're very close. I mean, let's just see. This is about not giving away an opportunity to grow the Australian economy by $18 billion. A permanent change. People say they want big tax reform. Well, we all wanted to see that but it's not on the table Robbie. What's on the table is a plan to make our businesses more competitive. A plan to grow the economy. A plan to fundamentally change our productivity which is what drives higher wages.
Jennifer: That's what's on the table. That's why we're supporting it. And people say, look you know we should do big tax reform. That's not what's on the table and frankly it would take years and meanwhile back at the ranch, other countries, the US, even France is talking about lowering its corporate rate, we are now falling further and further and further behind. But this Budget's about more than that. This Budget is about, when the business community is thriving, when the Australian economy is growing, if we go for growth we can put more back. We can give those tax cuts. We can put back into aged care. We can spend the money on infrastructure. That's really the challenge.
Robbie: Okay. You have a very strong pitch that you're trying to sell at the moment. I understand that but again it comes down to levels of transparency with your organisation and the trust that you're asking people to put in it. Okay. You're making these claims this morning but we're being told in the last few weeks about The Common Good campaign. Now, The Common Good campaign, it wasn't...it's a campaign that is being run in the electorate but it's not under your own name. It's obviously attached to the address of the Business Council of Australia.
Robbie: It's been run during the South Australian election campaign but people didn't know that it was connected to the BCA.
Jennifer: Well I think any search on the website would prove that it is.
Robbie: According to a lot of people they didn't know at all.
Jennifer: Well, who are the a lot of people? I mean this is the whole problem with public debate, they, somebody, you know.
Robbie: Well hang on. So why on earth couldn't you run a campaign under your own name, Business Council of Australia?
Jennifer: This is why we are doing The Common Good campaign, because we want -
Robbie: Why did you have to run the campaign under a completely different name, without even indicating that it was attached to the BCA.
Jennifer: Well I think any search of the website would be confirmed. Let me be clear. Let me be very upfront about this. We wanted to have a broad-based campaigning arm. That appeals to Australians. That goes to the common sense centre that most Australians are in. So we've called it For The Common Good. And we want that campaigning arm to not just be able to be used by the business council but other organisations, other business organisations, and we were very clear that people were not going to probably get interested in the campaign that has Business Council in front of it. We're obviously not a household name. We wanted that to have a broad appeal and that's why we called it For The Common Good. And, you know, we are going to take it up.
Robbie: Do you agree that it can be misconstrued as though you're doing something?
Jennifer: People want to misconstrue it. Because they don't like people...they don't like the sense of fighting back. You know, nobody gets upset that GetUp! before an election sent robocalls out to people. Totally misleading them about Medicare. No one says that's a problem. I think that's a problem. I think that's a threat to democracy. We will not be campaigning for candidates. We will be campaigning in marginal seats. We will be campaigning in electorates and we will be campaigning on issues. We will not be campaigning on candidates. We will not be threatening candidates when they don't take our policy position. We want the public to see the centre ground back in full force.
Robbie: Okay. Just before I let you go Jennifer, we've got the news in just a moments time.
Robbie: But do you know what is expected as far as corporate tax cuts are concerned in tonight's Budget?
Jennifer: Well I'm assuming the government will leave the 10 year plan on the table. It's the centre piece of their economic activity, as it should be, because this is the thing that's going to give us growth and that's going to be the thing that gives us the choices that Australian's want. I think we will see some very good spending on infrastructure. I think we'll see some tax cuts which, I think, we have been calling for. Tax cuts for low and middle income earners for quite a long time. You know, I think this will be a strong budget that takes the country in the right direction – stronger growth but putting that growth back into the pay packets of people rather than into the coffers of government.
Robbie: Okay, we’ll see what’s in store tonight. Thank you so much for your time. Jennifer Westacott is the chief executive of the Business Council of Australia. Like I said, she approached us saying, you know I’d like to be able to put the case forward and we said go right ahead. So there it is.