Event: Jennifer Westacott interview with Stephen Cenatiempo, 2CC Radio Canberra
Speakers: Stephen Cenatiempo, host; Jennifer Westacott, chief executive Business Council of Australia
Date: 12 May 2021
Topics: Budget 2021
Stephen Cenatiempo, host 2CC Canberra: Jennifer Westacott joins us now. Jennifer good morning.
Jennifer Westacott, chief executive Business Council of Australia: Good morning.
Stephen: You've been out doing the rounds. A little bit warmer in here. We've at least got air conditioning. So you had those five pillars that you were looking for. Clearly, you're focused on creating jobs. How successful has the government been on that field?
Jennifer: Well, very good. You can see the numbers bouncing back, you can see the unemployment rate falling down, you can see the target getting unemployment down to four per cent. That's a very strong recovery from where we were, think where we were 12 months ago. We were really looking into the abyss for unemployment. So that's pulled back really well. Growth has recovered really strongly. Then you get the social dividend that allows you to make this unprecedented investment into aged care, big funding for mental health, big funding for disabilities. So look we think it's a pretty strong budget.
Stephen: Obviously the Treasurer made a big point of saying that this budget was about generating not only the jobs but also economic growth. Do you think the plan is there given that they are a few major assumptions that really have to...there's a few things that have to happen for all the dominos to fall the right way don't they?
Jennifer: That’s exactly right. Well, a couple of things. First of all, growth bounces back in the short term but we are a bit worried about those numbers in the outer years where you've only got the economy growing at under three per cent. That's not enough to really drive wages growth. I think Australians want to see higher wages and we want them to get higher wages. And then to your point, there are some big assumptions there. But there are some conservative assumptions too. There's a very conservative price on iron ore. There's a very conservative assumption about the rate which we'll start getting migration back under. But what it really means is that we've got to do the hard work, a lot of which is in the budget of driving business investment through the expensing allowance you were just talking about with Toyota there. Driving the skills agenda. A massive skills package. $4 billion for apprenticeships, for the JobTrainer program. And we've got to keep doing the hard work on making it easier to do business by getting rid of red tape. All of those things have to stay in place so that we get that domestic recovery. And then gradually, carefully we've got to start opening up our international borders.
Stephen: The economic growth issue, there's a lot of people suggesting that we need immigration to make that happen but there's also a concern that increasing immigration numbers will have a downward impact on wages growth. Is there a balance there that we can achieve?
Jennifer: There is a balance there. I mean historically population growth has driven a lot of economic growth but we also need those skilled workers. Because what companies tell me is that we've got to get this kind of cohort of people, these particularly skills so that we can then bring that investment to Australia. So companies say to me all the time, particularly the big international companies, look Jennifer we would do more in Australia, but we need the skilled workers to do it. And you can't do everything as quickly as you want to by skilling up Australians. So we have to get that balance right. Skill up Australians, make it easier for people to retrain and reskill. That's why I'm a big fan of the JobTrainer package, and you've got to bring in those highly targeted skills where we don't have those skills. And then you've got to bring in those, what I call the peak and troughs skills. So a lot of farmers tell me, ‘I haven't got people to pick my fruit. I've had the best harvest I've had in years, but I can't actually bring it home because I haven't got workers.’ So we're always going to have to have permanent and skilled migration. That's got to be of course, carefully balanced with skilling up Australians so that obviously our first priority is to get Australians into jobs.
Stephen: I hate the concept of winners and losers. I think the only winners should be the country. But at some point, there are going to have to be some losers in future budgets. How early do you think we'll expect that?
Jennifer: I think the first thing is to get growth happening. And that's why I want to see the growth numbers bigger and a bit more ambition on growth. A bit more ambition on investment, a bit more ambition on exports and driving the economy harder. A bit more ambition, even I'd go further on skills so that we really do that growth side of the equation properly. But at some point whoever is in government is going to have to start looking at fiscal consolidation. But that's not about big cuts. I mean the size of them would have to be colossal in the first instance. But that's about prudent spending, making sure that every dollar we spend is a dollar that's creating a job. And in services, that we're always looking for ways that we make services more efficient. We get rid of the duplication between the Commonwealth and the states. We get rid of some of the hassle of getting your services. Those things don't necessarily cut costs but they contain costs over the long term.
Stephen: Jennifer, wonderful to speak to you this morning. Thanks for your time.
Jennifer: Thanks very much.