Jennifer Westacott panel interview with Fran Kelly, ABC RN

12 May 2021

Event: Jennifer Westacott panel interview with Fran Kelly, ABC RN

Speakers: Fran Kelly, host; Nicki Hutley, independent economist; Jennifer Westacott, chief executive Business Council of Australia; Cassandra Goldie, chief executive Australia Council of Social Services

Date: 12 May 2021

Topics: Budget 2021

Fran Kelly, host RN Breakfast: Cassandra Goldie is CEO of ACOSS the Australian Council of Social Services, Jennifer Westacott CEO of the Business Council of Australia, and Nicki Hutley an independent economist. Welcome all of you back this post budget day. Great to have you with us again. Nicki let's kick off with you. The Treasurer didn't say Australia is going to snap back last night but he came mighty close. The economic engine is “roaring back to life” he said. Economic growth will soar to 4.25 per cent next year. We haven't seen that growth level since the last mining boom. Does all this sound reasonable and plausible to you?

Nicki Hutley, independent economist: Yeah look I think for the first time in a long time the budget forecasts are ones that you can't really cast too much aspersions over. I mean obviously there's a huge degree of uncertainty with what happens with the virus. Health is driving the economic outcomes. But given the big decline that we have, given this huge stimulus that's going into the economy, given that Australians are spending more at home because they can't go overseas that actually adds to the economy as well. We will get a big bounce back. The problem for me is that it is a bounce back rather than a bounce forward. It's what's missing from the budget. It sounds churlish because there's so much in there, but it is the things that are missing that really drive us forward too. This is a sugar hit, a short-term growth, it's not a long-term strategy for a radically different Australia. A really prosperous Australia over the long term. And nothing on climate change of course.

Fran: Yeah we might come back to that. But a sugar hit Jennifer Westacott? 4.25 per cent growth next year. That's pretty strong. It then drops back, the forecast, to 2.5 per cent the next year and then the year following that. Is this budget doing enough to deliver a sustainable level of growth? Is there enough ambition in this budget?

Jennifer Westacott, chief executive Business Council of Australia: I don't think there's enough ambition in the growth numbers. I think there's a lot of ambitious ideas though. I think there's a really good mix of the things that drive the private sector economy. And some of those things are setting us up for the long term. I mean the skills package is huge - $4 billion. Obviously, the extension of the expensing, which is going to drive that business investment, infrastructure, workforce participation, the digital stuff, which is about transitioning the economy, the modern manufacturing which was announced last year, the stuff on research and commercialisation. So we think all of the ingredients are there to start positioning for that longer-term growth. But the only thing I'm worried about in the budget is that long-term growth forecast. Because we need to have more ambition, to think big, to think big about investment, about innovation, about driving expansion, about the skills agenda. Because it's that more ambitious agenda that's going to give us higher wages, new industries, new jobs, and we've got to actually start thinking in that direction.

Fran: Okay and I know you have been thinking about it and I'll come to you for some of those specific ideas in a moment. But Cassandra Goldie first to you. The Treasurer had told us he was aiming to push the unemployment rate below five per cent. We're currently at 5.6 per cent. The budget forecast suggests we'll get to 4.75 by the middle of 2023 and 4.5 per cent by the out years. Do you welcome that? Are the people that ACOSS is batting for jobs, jobs, jobs is that what they need?

Cassandra Goldie, chief executive Australia Council of Social Services: Look after years of austerity and debates about debt and deficit and surplus we've got a fresh focus on bringing down unemployment. And I was heartened to hear the Treasurer say to you that he's particularly concerned about preventing long-term unemployment. Because there's no doubt we're still in a pandemic and we're coming out of a deep recession. We've got 700,000 people who are now considered long-term unemployed, and we've still got 1.3 million people who are on JobSeeker - $44 a day. That is brutal for them.

Fran: How many? 1.3?

Cassandra: 1.3 million people. And the macro picture on the labour market is not great for everybody. We've still only got about one job for every seven people who are looking either for a job or more paid hours. So we're not out of that challenge yet. So one of the things we've welcomed in this budget of course is the better investment in some of these key essential service areas. Gee, do we need good, solid workers in the aged care sector. And they have fought hard for that. It's not enough but you've heard people saying it's really important what we've got - childcare et cetera. These are all pretty modest Fran. I want to see the big picture on this. Overall per annum there's only about $5.5 billion going into those new care sectors. Some really good jobs in there. So that's an opportunity. On the other side of course is billions still being relied on in terms of business tax cuts and personal income tax cuts. And the big hole, the people on low incomes. This is not a good budget. A single mum wrote to me this morning saying this is a stinker for me because one in three single parents are still in poverty. We've got people on JobSeeker of course well below the poverty line, you know that.

Fran: Apart from JobSeeker what would have made it better?

Cassandra: Well JobSeeker, fixing family payments. Instead of relying on tax cuts which dollar for dollar the more you earn, the more dollars you get back, and we've got a Treasurer pleading to people who've saved to start spending. Wouldn't it have been better to put the additional dollars of support into people on low incomes so JobSeeker, parenting payment, family payment. All of these have been flattened over the years and the facts speak for themselves. We've got a rental crisis. And of course the other big one was social housing and the housing affordability crisis. That would have been a much better spend than the kinds of policies that the government came up with on that front.

Fran: We'd like to hear something from Labor I suspect on Thursday night in the budget reply on social housing. Just getting back to the point that Jennifer made, you made Jennifer about training - the huge training package in here?

Jennifer: If you take the training and all the stuff that's in there for job services it's about $4 billion. But $2.7 billion for the apprenticeships, $500 million for the JobTrainer, and then you look in the budget papers there's a lot of stuff around job services.

Fran: I don’t' want to be cynical on this but you and I have done a lot of these post-budget discussions. And in a lot of these budgets there's been training packages. Every year the training seems to be our great gap. Skills, we have a skills gap that we can't address in this country. TAFE never seems to be in a sustainable position, on sustainable footing. There seems to me a big gap between talking about training, giving money to training places and delivering the training we need in this country. Why is that?

Jennifer: Yeah because the reform hasn't been done to things like getting short courses and micro-credentials. But what JobTrainer is, is actually pushing that. I think JobTrainer is one of those things that is going to change the skills system, that is going to change the business model of universities as well as TAFEs.

Fran: These are short courses?

Jennifer: Short courses. But you've got to be able to stack them so you can say, ‘well I've done this and this.’ This is why we call for this skills passport so that if I'm an employer I can see well Jennifer has done this, this, this, and this. And that makes her qualified to do this work and I can actually take that to employers. So we've got to do that bit. We've got to do the information a bit better so people can see that I can get that course, that course, that course, and that course. But look we've got to make starts on these things. These are huge amounts of money. And I do take issue with Cassandra on the business investment. If we want to get people back to work, you've got to get companies employing people. You've got to get businesses back on their feet. If we’re not going to have migration, they've got to be investing so that they increase productivity, they increase and expand what they're doing, so they export more, so they can employ more people and pay them more. And you can't do that if business is flat and business investment is really flat. So I do really support that in the budget, but we've got to work harder on ambition for innovation. The patent box is a cracking idea because that encourages small, medium businesses and biotech companies to start driving those investments in biotech and then obviously getting a tax concession on that. These are things, to Nicki's earlier point, we've got to transform this economy. We've got to think big. And we've got to stop putting all of our eggs in one basket. We've got to do this diversification stuff as well as decarbonise the economy.

Fran: And there's nothing to decarbonise the economy. Nicki Hutley you made that point. I mean there is what we already know. The government has the technology roadmap. Nothing new announced. No commitment either to net-zero emissions by 2050. It's still just a...

Jennifer: The hydrogen package a couple of weeks ago.

Nicki: Jennifer, sorry Fran I'm interrupting you from your question. But look, hydrogen is still very, very hypothetical. Carbon capture and storage has a whole load of issues. It's completely financially unfeasible at the moment and even if we could get it to work it's not going to capture all the emissions or anywhere near what we want. What would have been far more sensible to see if more investment in renewables, more investment in battery storage power. We've got a whole load for roads, why can't we have more investment for infrastructure for EV charging to really kick start that? If we're going to make the progress on climate change that we absolutely must make, not in 2050. Countries are moving on from 2050. We are so far behind the eight ball. That's not close enough. You can tell I'm really fired up about this because we are just letting this opportunity, its sand slipping through our hands. Australia is five times more vulnerable than other countries where we get seven times the impact. We must do things and there's nothing meaningful. We've got $100 million towards new gas projects in there. Gas is not no emissions. It's yes, not as bad as coal but it's not where we should be investing money. That $100 million would have been far better spent, just pick one thing on EV electrification. And Fran if just while I've got the microphone jump back in on that skills issue.

Fran: Go on and then I'll go to the others.

Nicki: Yeah so yes it's great and apprenticeships are good but if the market were really working, we've had lots of skills shortages in lots of areas for a long time. It's not just the pandemic. The market clearly isn't sending the right signal. And with things like aged care and childcare a lot of the workers are missing because the wages are missing. And just providing the training places alone is not going to fix the problem. So I think we need to look at it a little bit more holistically. But look there are lots of good things in this budget and I don't want to be too churlish, but we can't just sort of pretend that there aren't a whole lot of things missing as well.

Fran: Well there's plenty of, a lot of good things in there for sure. I've also Jennifer and Cass both nodding their heads and champing at the bit here,

Cassandra: If I can. What's happened to training and why are we still where we are on skills? We urge the government to take a much more regional approach to the planning around education and training, the investment in individuals, the collaboration between businesses that need workers, real jobs, and of course we're going to see a lot more demand for jobs in the caring sector. But it's a very regionalised labour market. This is a very diverse picture.

Fran: And regions are screaming out for people to work.

Cassandra: And one of the things in this budget the government has done which we have welcomed is they've now expanded to 51 sites - these local employment programs. Which we hope is the glue to bring together business leaders, people who are unemployed, training providers locally, and those with the vision Nicki with the kinds of industries that we want to build the great jobs of the future rather than a big macro picture. Which is why we're more critical on the generalised business tax cuts because they don't help us to guide the kinds of investments we want and the kinds of local industries we really want to foster. 

Fran: There's a hint of sort of punishment in this. I think there's a payment for people to go, to leave home and go to a region where there are jobs required. Now governments have tried this. I know I'm sounding like I've been around in this place for decades. I have. But they've tried this before, it doesn't work generally does it?

Cassandra: Well it doesn't work unless you've got confidence that it's going to work longer-term. People do have an understanding of the risk it takes to move from where you are, particularly in a pandemic right now.

Fran: Particularly trying to get housing in regional Australia right now?

Cassandra: That's right. And housing affordability. And we've got regional rental prices have gone up by 20 per cent in some cases. So it's a chronic problem. So this is something to have as one of the options for people. If it is the decision that's right for you to get that additional support to move. But the other part of it is, to the point around climate, I just want to back Nicki in on this. This is a serious issue for us. It's the big crisis that unfolds ongoing. We haven't got anything in this budget that we can see on energy efficiency. And the Commonwealth can say, ‘well we don't want to go there.’ Well bang for your buck, and we wanted this for lower income people to roll out a whole lot of jobs, to do retrofitting on rental properties to get the best standards of energy efficiency. That's a huge equity issue. Very wealthy people are basically paying nothing for their energy now, but low-income households got completely left out of it. That was another great opportunity that we missed. 

Fran: Jennifer it is true. We are slow on the energy efficiency. We've talked about it for years and we're not going to do anything about this?

Jennifer: I agree with Cassandra about this. And I did some work on this years and years ago where we looked at what the British did on a program called Warm Front where they gave people cash subsidies to upgrade their properties. And some of it was really simple things like giving you a better fridge. I agree with Cassandra about that. Just on picking up on two of those things. On the climate and energy stuff. Not all of this has to be done by government. I mean in our budget submission we said look there's over $50 billion of decarbonising energy projects out there that the private would do if they had the policy signals to do it. I mean if the government wasn't underwriting things. I mean you and I have talked about this many times. So I don't think everything gets solved by governments spending money on things. Sometimes it gets solved by actually sending the right signals by getting the policy right. And then obviously getting the planning approvals right at the state level, getting the coordination right between the states.

Fran: But for that you have to have a policy position and you have to have...

Jennifer: You have to have a national policy position and what we've got is states going in different directions. Just on the regionalisation to pick up on Cassandra's point just quickly. I'm the biggest advocate of this. To get people to the regions for quality of life. But it's a whole package which is what we're calling for. That you take 15-20 places across Australia, you do the 30-year infrastructure plans, you do the housing development, to your point, you create the skills hub. The sort of stuff New South Wales is doing in the regions is really, really good and we do need to take that holistic approach.

Fran: You're listening to RN Breakfast. Our guests on the panel, Cassandra Goldie from ACOSS, Jennifer Westacott from the BCA, and Nicki Hutley an independent economist. We're going to go to the women's budget statement because it's a significant element of the budget. It's more than $3 billion. Nicki Hutley, the government was in a lot of trouble with women earlier this year. Its perceived women's problem, as it was described, plenty of people take issue with that description I know. It promised the budget would correct and it has. $3.4 billion for issues around women including women's safety and security, financial security, health, and wellbeing. Does the budget live up to the hype Nicki? 

Nicki: Well again I'm going to sound a little bit churlish. And firstly I will say that all of the steps are welcome. It is great that we are finally seeing some initiatives here. I would have really liked to see… The centrepiece of the action was of course the already announced childcare package - $1.7 billion. In its own document, it's saying that spending over a four-year period is going to generate $1.5 billion of additional growth through renewed participation in the economy per year. Cost-benefit basis, slamming bang for buck. So why wouldn't you go the whole distance? Why only target one in four families, those with more than one child? Why not target everybody? The total cost of it, Grattan modelling suggests around $5 billion a year. It gets that back for the government. It would have been really good spending. But look I welcome what we've got. Something is better than nothing. I'm not an expert on domestic and family violence. I understand that there's probably again a little bit too little. And I think particularly for example housing, safe housing, we could do with a whole lot more. Obviously, housing is enormously expensive. Just to buy one house costs you almost the entire budget that they've allowed for that. But I think this just sums up the budget for me. Is there are so many things in here and it's very hard to say they haven't done something on anything. Because they've done an awful lot but it's almost as if they've cast the net too wide. And I understand if they hadn't acted on some things they would have got criticised for that. But it's almost in going so far they've kind of done a little bit of this and a little bit of that. If you were going to go for the whole hog, something like the childcare package which is transformative. That female participation piece could have been even better. But look I welcome it.

Fran: Let me go to Jennifer on that and let me reassure you after 8.30 we're going to be talking more specifically about that $1.1 billion on women's security, domestic violence, those issues, family law, family legal issues. Jennifer, the BCA was more ambitious than the government on its childcare policy. So what's your reaction?

Jennifer: Look I think the women's statement is really good. It's $3 billion. To be honest I think we've lost the plot on the proportion of money here. 

Fran: Well hang on though because in a normal budget there would be funding for breast cancer. It's just been all pulled together and called a women's statement.

Jennifer: Sure, but I guess I'm saying once upon a time if you said $1.7 billion for a childcare package people would have seen that as colossal money. I think we've lost the plot of relativities with these numbers that we throw around. But look I think the government has solved the big problems that we thought they had to solve. They solved these big cliffs. Particularly for the second child which all the research shows are actually the big deterrent to women re-entering the workforce. We know that the government has been really clear though that they're not finished on this. That the Treasurer has been clear that there's more work to be done. We'd like to see those tapering rates fixed. They have fixed the cap - the 189,000 that was a big deterrent to women. And of course, we would say lift the cap at the end to make it available to more families. But the other point about looking at a women's statement which we have really welcomed and, as you know, we called for is that you've got to think about all the other things too. The skills packages, the aged care package which will see a lot of jobs created particularly for women in the caring sector. And obviously, we want those jobs to be well paid. Look I think it's really important that people say these are huge steps forward. And of course you've got to have capacity to do implementation, the violence stuff I know you're going to talk about. But as someone who knows a lot about domestic violence, $1,500 to get your life in order is pretty good, right? 

Fran: This is the escaping domestic violence payments?

Jennifer: Yeah. I mean these things are really thought...when I looked at the budget last night I thought gee there's some really thoughtful things here. And I don't think we should always just think about things in these colossal amounts of money.

Fran: Well there is a colossal amount of money being spent.

Jennifer: And there is a colossal amount of money.

Fran: Just before, hang on Nicki before I get to you because I want Cassandra to come in. But just to finish up on this with Jennifer just briefly if you would Jennifer. We're almost out of time. But the superannuation, there's been some benefits there for women built in. The scrapping of the $450. But no super being paid on paid parental leave.

Jennifer: Yeah and we're going to continue to work with the government on paid parental leave and on super for paid parental leave. But don't forget women's super balances are low because they leave the workforce for so long. So we've got to get the participation right.

Fran: Okay. Nicki I'll come to you in a moment. But Cassandra, the women's package? There's money for housing.

Cassandra: So there is no money for low-income housing.

Fran: Well there's deposit subsidy schemes.

Cassandra: And the single parent measure that was announced is, targeted is a really polite way of putting it Fran. We think there's only a handful of single parent households that would actually be able to make use of the two per cent guarantee on deposits. It only needed a two per cent of equity. But putting that to the side. What we haven't got here is what's called the gender budgeting analysis to show dollar for dollar do we really have a better approach to the balance between men and women in benefiting on the budget. And you'll be very clear that if you look for example, at the policies on the transfer payment side, social security, compared to the tax side it'll be very gendered. There's no question that women have lost a lot over the policies associated with the cutting back of social security arrangements. And instead we've got the big billions going again into personal income tax cuts next year and over the forwards. That's really where all the big billions are being spent. So we're leaving really low-income earners behind. And can I be very clear the government's big cut in social security is now that they're introducing a four year wait period for newly arrived residents. 

Fran: That's up from how long?

Cassandra: For four years you'll now have to wait to get access to any kind of social security support. It's a shocker.

Fran: If you arrive in this country as an asylum seeker? A migrant?

Cassandra: No as a resident. Yes so at the moment you've got to wait one year to get access to family payment support. Two years to get access to carers payment. It's now going to be, yes exactly, four years. It's a shocker and I hope the parliament absolutely blocks that one.

Fran: Nicki, I'm told you're clambering for a response. Just a brief one here before I leave this?

Nicki: Look I just want to answer Jennifer's point. I'm not saying that we can blow this budget out of proportion. It's, of course we've got to be responsible. And that's my point. Is that we need to prioritise the initiatives that give us the best bang for back. Tradies buying utes, good on them that's great but buying imported cars is not going to create a lot of jobs. I'd rather see more money on the female, childcare budget. It's just about that prioritisation, making sure that everything we invest in, it's not about whether the electorate likes it. It's about whether it delivers us a big economic bang for buck.

Fran: Okay, we're almost out of time, probably don't have time for a response from each of you. But I have a particular concern about this budget which is accountability. Actually implementation. I was referring that I suppose earlier when I talked to you about training. But also the $10 a day per resident in aged care, extra from the government. That adds up to $3.2 billion. That's a lot of money. And I can't see, and the government says there's more accountability measures, but I can't really see anything that's going to make it accountable for every single dollar of that to make sure it goes to added care. And in the mental health package too. There's more money for Head to Health centres. Which is the adult mental health support centres. A great idea but we've already had eight announced two years ago. Only one of those is up and running so far. There seems to be a gap between promises, perhaps it's always the case, and implementation. We need to keep the government, keep the pressure on the government.

Jennifer: Look I think that's a fair point. 

Cassandra: One of the best ways to do that Fran is to support people with disability, people with mental health challenges, the residents, and families of aged care at front and centre in the ongoing design and implementation of this. Not cutting them out and putting it behind closed doors and automating it which of course is the big concern with the NDIS. What we need to get accountability in the NDIS is to have people with disability in the governance and holding governments to account on the implementation on those schemes.

Jennifer: But you're right Fran. The how really matters and we've got to make sure that the how does deliver better services so that we're not back here in ten years' time with another royal commission and another colossal amount of money to be spent. And that's about getting the systems right. And to Nicki's point, it is about making that every dollar we spend is a dollar that gives you those returns and gives you a system that's going to last. And we've got to make sure that we keep our eye on that.

Fran: That’s hard to do and these are big reforms.

Jennifer: Very hard to do in a federation that is sometimes quite dysfunctional to be honest.

Fran: That's a whole other discussion.

Jennifer: It is but this has been...

Cassandra: [crosstalk] A bit more gender equality in the governance of the country would be good too. A few more women running it.

Jennifer: This has been a hundred-year problem and I think it's incumbent on everybody to keep focused on the how as much as the how much.

Fran: I'm still getting used to the idea of having these post budget discussions and not talk about debt and deficit and the forecasts ad infinitum. So it's interesting to be talking about these actual measures and accountability and the change that we need, the big ideas and we need more of that. Thank you all of you for joining us.


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