Jennifer Westacott interview with Ross Greenwood, Sky News

11 July 2022

Event: Jennifer Westacott interview with Ross Greenwood, Business Now, Sky News
Speakers: Ross Greenwood, host, Business Now; Jennifer Westacott chief executive, Business Council of Australia
Topics: Jobs and Skills summit; labour shortages; skills; investment; migration


Ross Greenwood, host, Business Now, Sky News: Joining us now is Jennifer Westacott, chief executive of the Business Council of Australia, which represents the biggest employers in the country. Jennifer, can I start off is the Prime Minister right? Is the system not working right now?

Jennifer Westacott, chief executive, Business Council of Australia: The enterprise agreement system is not working. There are many parts of the industrial relations system that's not working. But the central one for us is the enterprise agreement system. And it's not working because of the way the better off overall test has been applied. It's too complex, it's too difficult. We're not getting ambitious bargaining. We're not getting that sharing of ideas. And that's holding back productivity. So I think both the union movement and the business community think we need to fix this, we need to fix it in both of our interests. So I think we'll find a lot of common ground there at the summit.

Ross: Okay. In a statement today, you've said that this is an opportunity to restore the Hawke-Keating enterprise bargaining system to lift productivity and to let Australians to earn more, is that Nirvana? Because industrial relations has been fraught for both sides of politics for such a long time. Is there any chance of agreement between employers, government and unions?

Jennifer: Well, I think we have to find agreement Ross. I think this is a great opportunity, this summit, to reset in a whole lot of areas. Because the world has gone through two years of really substantial change, there's a great opportunity to reset on migration, there's a great opportunity to reset on skills. There is an opportunity to reset on migration, because the fundamental thing that all of us want is we want Australians to have better living standards. And that means getting high wages, but you've got to have the productivity that goes with that. And that's about investment, that's about innovation, that's about skills. But we all share that goal that we want Australians to be better off. I mean, it used to take you two years to get on average about a hundred dollars a fortnight more, now it takes seven. And I reckon that's at the heart of some of these cost-of-living pressures that people are feeling, their wages just not keeping pace with costs. We've all got a common objective here, and I think we've got to go to the summit, get rid of the old baggage, to get rid of the old arguments, and think about that family that is struggling to pay their bills, and they can't see a way ahead, and work together to put in place the right conditions for that family to succeed and prosper. And I think we all share that ambition.

Ross: Okay but then that can be about skills and training. That can also be about the workforce participation, given the fact that to own a house in Australia right now in our capital cities, you need two incomes, not one, which goes to childcare. So it goes through a whole range of issues, which includes now the skills shortages, which is where migration becomes a controversial part about this, because it almost seems that you've got a once in a generation opportunity to significantly raise Australia's population?

Jennifer: Absolutely, we've got to have that conversation about resetting our migration. Let's just frame the problem up, we used to get about 230,000 people per year, that's through some temporary, permanent, and then students and so on. Over COVID, we lost 90,000 people on average per year. So we're about 300,000 people short. So we've got to make up that shortfall and then I think we've got to rethink the system. We've said you've got to reweight it, so it's really focused on skills, about 70 per cent skills, and then I think we've got to think things through, like is a two-year visa sensible, we should be offering people four-year visas. And whether you're going to get up and leave whatever country for a two-year visa, move your family. How do we make it more attractive for people? And then how do we make sure that there's a pathway to permanent migration? On the skills side, we've really got to kind of explore how we fast track the way people get skills. How do we help people who've got low skills in areas like digital and so on, get quickly up to speed so we get better paid jobs. So the skill system and the migration system will work together, we obviously want to make sure Australians have got access to good jobs. But we are going to need some of those high skilled people who've got those particular technological skills that come in, and they train other Australians. And that means we can get an industry going. So migration, skills, really important part of the summit.

Ross: But the thing that's scaring the tripe out of your members right now is actually getting enough people, particularly even in low skilled jobs and they're worried about the wage rises, and the wage claims that are coming down the track being caused by this inflation, being caused by the higher interest rates. That's the thing that's really worrying them because that starts to affect profitability, and even their investment decisions.

Jennifer: Absolutely, we've got to do something about these short-term labour problems, because ultimately, they're going to be self-defeating. So people say, oh well, they're putting upward pressure on wages, but that's about wage inflation. That's not about getting people sustainable wage increases, which is what we want to see, that's just causing problems in sectors. It's also stopping businesses from getting up and running. So, how many restaurants are you seeing that aren't opening at the normal time because they can't get labour? I'm hearing from companies who say, ‘well Jennifer we aren’t even tendering for that work because we can’t staff it up, we couldn't complete the tender.’ All of that is going to be a handbrake on our capacity to recover. We've got to start to think smarter about how do we make it attractive for people of all skill levels to come to Australia? How do we make sure we send them a really clear message you're not going to get locked down? How do we send them a really clear message, you're going to be able to move around the country? You know, I'm even thinking Ross, you know, do we say to some of the holiday tourists look we'll give you a bit of a package, we'll help you reduce the cost of your airfare, come here work for 12 months, and then potentially move to another job.

Ross: It is not a bad idea.

Jennifer: So we've got to deal with this short term labour crisis, because it's actually going to be self-defeating. It's not the same as sustained wage increases, that's a very different thing, that comes from productivity. So, you know, we've had the minimum wage decision that's really good for low-income workers. But if we don't do the productivity work: the skills, the investment, the deregulation of the economy, we run the risk that that's short lived. And then over time, we don't see the employment numbers staying where they are, or that we don't see the growth in the economy that we need to see.

Ross: Jennifer Westacott, always good to have you on the program. Many thanks for your time today.


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