Event: Jennifer Westacott interview with Thomas Oriti, ABC NewsRadio Breakfast
Speakers: Thomas Oriti, host; Jennifer Westacott, chief executive Business Council of Australia
Date: 12 May 2021
Topics: Budget 2021
Thomas Oriti, host ABC NewsRadio: The chief executive of the Business Council of Australia is Jennifer Westacott who joins us live now. Morning Jennifer.
Jennifer Westacott, chief executive Business Council of Australia: Good morning.
Thomas: Thanks for your time. I guess a broad question first. How do you view the measures in the budget when it comes to business in Australia?
Jennifer: I think it's a very strong budget. I think it shows the power of a growing and strong economy. It does two things. I think it gets the right mix of the things that drive the private sector-led recovery which have to move to so the tax incentives, the skills package, which is enormous, the infrastructure package, the digital package, the participation package, and then it goes to the social dividend. That comes from a growing and strong economy which is an unprecedented expenditure on aged care. Big package on mental health. If I've got a worry about the budget it's the long-term growth forecast. And we need to be more ambitious about growth, we need to be more ambitious about investment, more ambitious about innovation and driving new jobs and new industries. Because that higher growth will give us higher wages and I think most Australians want that higher wage economy.
Thomas: Do you think though there's a lot of room to be more ambitious at the moment? It's been some pretty tough times and already there are people asking whether we're going to see austerity budgets for years and years to sort of pay for this expenditure.
Jennifer: Well certainly austerity budgets are not the answer to getting out of deficits and the large amount of debt that we've now accumulated which we had to do. We had to throw everything at this. Because we've seen what's happened in other countries. You can't have the levels of unemployment because leaving aside statistics that's about someone's life that's just been destroyed, and we have avoided that in Australia. So I think you have to throw everything at it. The challenge now going forward is getting the right mix of spending restraint and continuing to invest in our social services. But most importantly, continuing to drive growth. And you know, that is all going to have to be driven by the private sector. And we've got to do more on getting it easier to do business. I think the skills stuff is fantastic, but we can still do more so that people can upskill which means they get access to higher paid jobs. We've got to do more on digital. We've done a lot in this budget and now companies have to take that up and digitise their businesses which will drive productivity. We just can't take our foot off those things that are going to make us more competitive, drive our domestic economy. So that as we start to participate in the world economy again from a people point of view at least, we're ready to go. I think people are always very critical of things whereas I try to say well what's really positive about this? And I think Australians should be just so pleased that we are not in the position that so many countries are in.
Thomas: And important to put that in perspective no doubt. What do you make though of Australia's borders being closed for another year? Obviously, a tough time for tourism and hospitality for example in particular.
Jennifer: Look I am worried about that to be honest. And I think that's driving some of those low growth numbers. So if you say what's driving that low growth in the outer years of the budget that's low productivity obviously which I've talked about. But it is also a low population. And look we have to find a way through this. So our first priority is obviously as we roll out the vaccine let's not have any more state border closures, let's not have any more snap lockdowns, let's look at some of these public health restrictions. So let's do that first. Because 52 per cent of people aren't travelling in Australia because they're not worried about getting COVID, they're worried about not being able to get home. So we've got to solve that problem first. And then as we get to what's called stage two of the vaccine roll out, we've got to start prioritising the international border opening for certain categories of people. So our first priority is obviously returning Australians and then international students - huge injection into the economy. And then we need those skilled workers because a lot of companies are telling me now, ‘I can't get the workers I need. If I can't the workers I need I can't expand that part of the business.’ And then those travel corridors that Margy is talking about with countries that have got comparable infection rates and comparable vaccine rates. We've got to lay out that plan. And to be honest we've got to see the plan. Because businesses have got to plan to not overuse the word plan. People have got to be able to predict what's going on. I mean Qantas and Virgin run their schedules six months in advance. I mean they need to know so they can start bringing people back to work, getting things organised, retraining people. That's the sort of roadmap we need to see.
Thomas: One of the main features in the budget are these business write-off perks that are being extended by another 12 months. What does that mean for business exactly?
Jennifer: I wouldn't call them perks. They're incentives. And they're really important because what this means is that companies and businesses start to get those incentives to put on particularly machinery, particularly fast-tracking their digital and there's some stuff in the digital package to incentivise more of that.
Jennifer: That's hugely important and what that means is that people basically do more. They're more productive. They're able to expand, export more, and put more people on, and in my view hopefully, pay them more. Because I think people want those wage increases. So that's what that does and why is it important? Because business investment and the Reserve Bank talks about this a lot, is the missing link in Australia's economic recovery. It's the lowest it's been in 28 years. And it’s business investment that drives job creation. Its business investment that drives wages growth through driving productivity. It’s business investment that gets us those new ideas, those new products, those new inventions that create the jobs of the future. That's the missing link. That's what the tax incentives are there to solve.
Thomas: Okay, Jennifer Westacott always a pleasure. Thanks for joining us.
Jennifer: Terrific, thanks very much.