Event Interview with Tom Connell, Sky News

Speaker Jennifer Westacott

Date 16 September 2019

Topics energy, surplus, business investment

E&OE

Tom Connell, host, Sky News: Jennifer Westacott thanks for your time. Just clarifying your position on this 'big stick' legislation. You've previously highlighted issues with it and now you're saying the government has won an election on it so you'll try to work with them?

Jennifer Westacott, chief executive, Business Council of Australia: Yeah. We haven't changed our mind that we think it is unnecessary, we think it's highly risky, we think it will deter investment at a time when we need investment. And it's particularly unnecessary given the competition regulator today has come out today saying that for nearly 800,000 small businesses and households, bills have gone down. But look, you know, we are pragmatic, the government won the election, they took this to the election. Our job is to work with them to make sure that unintended consequences of deterring investment, putting risks across broader parts of the economy don't happen. And we want to work constructively with the government to get this right.

Tom: Because previously it was pointed out by the BCA or claimed that it could create more uncertainty, so discouraging that new investment in the energy sector. How do you ameliorate that?

Jennifer: Well that's what we've got to work constructively around amendments on making sure the legislation is right. But there's no doubt that....

Tom: How do you do that?

Jennifer: Well we are going to sit down with the government this week. We've been sitting down with them for a while and, you know, make sure that the final form of the legislation tries to pick that issue up. There is no doubt that this legislation is a risk to investment and we haven't changed our position on that. But you've got to be pragmatic. The government won a mandate. They took this, they were very explicit. You can either work constructively with people or just keep opposing things without trying to get it right now and that's our objective. 

Tom: Is there any particular element that you think could be changed?

Jennifer: I think there's two thing. One is to make sure that the Treasurer's powers are responsible and contained. I mean, we don't want government setting electricity prices. That's a risky road to take. And secondly, we want to make sure that there's no contagion to other parts of the economy, this doesn't reach across other parts of the economy. But, you know, let's work constructively with people. We don't think this is the right legislation. We don't think this will put downward pressure on prices. We think it's unnecessary but, you know, governments have got mandates and our responsibility is to get the right outcome for consumers and get the right outcome for companies and get the right outcome for the country.

Tom: Alright so certainly not changing your view quite clearly there, on some of the issues there. You do, according to quotes today, back the government's plan of a budget surplus.

Jennifer: Yes.

Tom: If the September quarter shows the tax cuts are not flowing through and being spent, would you change your opinion then?

Jennifer: Well we want to sit down with the government about that. Look, this surplus has been hard won and we are not in the same sort of position as we were in 2008 in terms of the, sort of, stimulus package. What we need is spending that drives faster economic growth. We need those infrastructure projects, we need the action to encourage business investment which is still very low. As a percentage of GDP it's still as low as it was in the 1990s. We've got to get those sorts of drivers happening rather than sort of one off cash splashes to households.

Tom: So you're saying we're not going to approach a situation of giving more money to households. We've already got some from the tax cut to spend it. You would like to do something on the lines of what Josh Frydenberg has spoken about on business investment. But should that be brought forward if the economy is still really sluggish?

Jennifer: Well that's something for us to sit down with the government and say 'how do we bring investment forward? How do we make sure investment doesn't go somewhere else?' That's a big risk, you saw BlueScope recently announced that they were sending a billion dollars to the United States. We need Australian companies investing in Australia. We need foreign companies investing in Australia. We need to increase the rate of investment. Why? Because it's investment that drives productivity. It's productivity that drives higher wages. Talk to any Australian, they'll say they want their wages to go up and that's fair enough, they should. But that's got to happen through a sustained period of productivity growth and that's got to be driven by business investment. So we want to really, kind of, sit down and look at those figures and say 'well okay, now how do we do this?' But no one should give that surplus away easily because it was very hard won and of course people forget what the point of a surplus is. It's to make sure we can live within our means but most importantly it's the resilience that you get if we get these continued global shocks.

Tom: But at the same time if the shocks are really starting going to come through, there's no point in making sure the surplus is okay to then trade away the economy?

Jennifer: Yeah and look a surplus isn't a bookkeeping exercise but we've got to make sure that we do the right things and what's the task to be done? The task to be done is to accelerate the rate of economic growth and particularly to accelerate the rate of business investment. 

Tom: Just finally, you're backing in the approach of focusing on business not so much, or perhaps a bit less on social causes. What's an example of a company or an issue that's been too much of a focus for business?

Jennifer: Well I don't think that's what we're saying. I think we're saying let’s get the balance right. I mean, I think this goes back to people being reminded what is a business. A business is the people who work in it? You know, 11 million Australians who work in a business. It's the shareholders, mums and dads investors, it's the tradies, it's the suppliers, it's the contractors, it's the customers - that's business. It's about people. And many companies feel very strongly about certain issues and they're employees expect them to do that. And they should do that. What we also need to make sure is that business is still singing the virtue of being successful businesses.

Tom: Right, so when you say getting the balance right, it does imply that it's wrong in some way?

Jennifer: Well I think that's the government suggesting that.

Tom: Do you agree?

Jennifer: Not necessarily. I think it's a case by case call for businesses. Certainly there would be no one who argued for company tax cuts stronger than the Business Council than I did and I think we have championed economic reform for a long time and, you know, championed these issues of business investment that we've just talked about. But I do think that companies have got to make sure that we don't forget to remind people of the virtue of being successful companies. 

Tom: So when you're saying case by case, is there case you'd point out where you thought business got the balance wrong on an issue? Too many businesses weighted in?

Jennifer: I don't think so. I think it's about making sure that we're constantly reminding people of the success of being successful businesses and that I think is the really important...

Tom: [crosstalk] the core business of it.

Jennifer: Yeah and that I think is really the centre of the Prime Minister's comments, that we should never be embarrassed to be successful companies. We should never be embarrassed to make profits provided they're ethically made. Because we're putting money back into someone who's put their dollar or money at risk so that they can get a return. And that's nothing to be embarrassed or apologise about. But if you think of a great example, it's Alan Joyce. A very strong advocate for social issues but a very strong advocate for economic reform. A very strong advocate for a tax reduction and a very strong advocate, courageous advocate, on industrial relations. That's a great example of people getting the balance right. But I do think companies have got an obligation to remind the community constantly and we hear this as we get around as part of our Strong Australia campaign in the regions that business is a force for good when it's successful because it's putting jobs in communities, it's giving people higher wages, it's creating value in communities, it's creating value for the country - we should never apologies for that. 

Tom: And Alan Joyce is an interesting one because some have suggested that he should stick to his knitting and you say he's been a good example. I guess that goes out to other companies, one of the biggest issues that we've seen campaigned on by companies was same sex marriage. Were they all fine in keeping with community standards and employees?

Jennifer: I think a lot of those companies, they're employees felt very strongly about that issue. And again, it's about making sure that business is a reflection of the community. It's not some abstract entity that sits out there that sort of doesn't exist in the communities in which people operate. And many companies, their employees felt very strongly about that issue, and I think Alan took a very careful and cautious approach but he was a very strong advocate for it. So was I. But I don't think anyone can say Alan and I haven't fought for economic reform.

Tom: Indeed. Jennifer Westacott thank you for your time today.