Jennifer Westacott panel interview with Fran Kelly, ABC RN Breakfast

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

Speaker       Fran Kelly, host; Jennifer Westacott, chief executive Business Council of Australia; Michele O’Neil, president Australian Council of Trade Unions; Cassandra Goldie, chief executive officer Australian Council of Social Service

Date            7 October 2020

Topics         2020 Federal Budget

E&OE

Fran Kelly, host ABC RN Breakfast: I'm joined now by a panel of stakeholders. Jennifer Westacott from the Business Council of Australia, Michele O'Neil is president of the ACTU and Cassandra Goldie who is from the Australian Council of Social Services or ACOSS. Jennifer, Michele, Cassandra, welcome back to breakfast. These times we're in mean you're not all jammed into that tiny Parliament House studio. As would normally be the case at this time post-budget. But thank you all of you for joining us. Jennifer Westacott to you first because business is a big winner and a big driver of the budget and the budget outcomes. Confidence is key to the forecast in this budget being realised. Growth picking up, employment coming down. Is business and consumer confidence so easily bought do you think?

Jennifer Westacott, chief executive Business Council of Australia: Well I think this will go a long way to instil confidence Fran. And I think it will go a long way to driving business investment that will have that job creation effect. I mean the budget had to do a very singular task. It had to focus on those million Australians who are out of work, overwhelmingly who work for a business, and I think the budget has got that mix absolutely right. And I do believe it will have that confidence-boosting effect as Chris Richardson says, there's still a lot of risks, a lot of issues to play out. But I do believe that suite of measures, wage subsidies, incentives for investment, carry back of losses, huge package on skills which you and I have talked about many times, deregulating the economy. All of those things focus on the immediate task which is getting those million Australians back to work.

Fran: What about the millions, well not millions, but what about those almost a million, 950 odd thousand Australians over the age of 35 who are on the unemployment queues. What's going to get them back to work?

Jennifer: Well I think getting them back to work is about getting business activity going again. Getting businesses investing.

Fran: But businesses are going to be given incentives to employ young people not older people.

Jennifer: Well I think the government has targeted that because overwhelmingly that's where the biggest job cuts have been or biggest job hits have been in those sectors of retail, hospitality. There's no doubt we have to really make sure that we're monitoring really carefully, people over 35. That we are targeting those skills packages, those 50,000 short courses that are announced. But the biggest improvement that can be made Fran is to get businesses going again. Get people open again. Stay the course on the careful, well managed, health-driven reopening of the economy. And we know that in NSW's case alone, 360,000 jobs have commenced again after the initial lockdown. So it's a combination of things. I think part of the challenge of looking at this budget is looking at the suite of things, not just one or two measures. And I believe the combination of those things is going to see those million Australians get back to work. And obviously, making sure that people have got skills and access to the right employment services so they can get back to work quickly. 

Fran: Okay, Michele O’Neil, what do you think? Every worker in Australia will get a tax cut from this budget. The government is spending about $100 billion more to create about one million jobs more. Do you applaud this budget?

Michele O'Neil, president Australian Council of Trade Unions: No we don't think this budget is targeted in the right way Fran. We, of course, support the fact that there's money being spent but you've got to look at where the majority of money is going. And in fact, the vast bulk of money is going into business tax cuts. Rather than to ordinary workers. And we're concerned that there's not enough conditions attached. We don't want to see taxpayer’s money ending up in CEO bonuses, or higher dividends to shareholders.

Fran: But the money is not for that. The money is to incentivise them to spend, direct spend and buy plant and equipment isn't it?

Michele: Well it could buy plant and equipment that affects the bottom line but doesn't create one single new job in Australia. So this is what we're worried about. The Treasurer himself has said in his figures last night that he expects unemployment to peak at eight per cent, that it'll still be 6.5 per cent in 2022. He set the test of getting it below six per cent but then fails to deliver that by 2022. And the other thing about confidence in the economy is about consumer spending. The Treasurer is predicting over the four years of the budget estimate that there'll be a ten per cent growth in the economy and zero growth in wages. So how can workers have the confidence to spend and see what the economy really needs if they're not sure they're going to have a secure job. There's no ongoing wage subsidies or support for people beyond those under 35 and that has very big holes in it. And they're not going to see any increase in their wages. So we don't think that the budget has hit the right spot and we're very concerned about women. We don't think the government has looked at what's really happened to women through this recession. They've missed the opportunity to reintroduce free childcare. There's no commitment to do what's desperately needed in terms of the aged care sector where the majority of workers are women in residential aged care. And to introduce mandated minimum staffing levels with increased funding that's accountable. We don't need to wait, and the government hasn't directed where this money is going to go to deliver jobs for working women.

Fran: Before I come to Cassandra, can I just ask you about the JobMaker hiring scheme which is a subsidy for people under 35. Yes, it's not for workers over 35 as I discussed with Jennifer Westacott. But do you welcome a scheme that subsidises employing young workers after recession and do you think it will work?

Michele: The key to good employment programs is that they deliver secure jobs. So again the problem with this subsidy is that it can be for casual, insecure, short-term, and part-time jobs. In fact, the employer can get double the subsidy by giving two people a part-time job than if they gave one person a full-time job. And for many young people, particularly those on youth wages, you can't live on a job that gives you 20 hours a week. It's just not enough to put food on the table. So there's flaws in this scheme that it doesn't guarantee secure, ongoing jobs. It's very short-term in nature, only for a year. It encourages businesses to churn through workers who would be eligible for the subsidy rather than investing in them for the long term. And that's what's going to make the real difference. That's what's going to make people feel confident and have workers have the confidence of money in their pocket, secure jobs and wages that are able to be spent.

Fran: Jennifer I will want to get a response from you to that in a moment. But first Cassandra, we've heard a lot about what is in this budget. Subsidies for employers to hire young workers, tax cuts for people. But we haven't heard a lot about what's not in it. Which is what Labor says is a problem. What's your view of this budget?

Cassandra Goldie, chief executive Australian Council of Social Services: Well the budget leaves millions without paid work stranded Fran. I mean there is this glimmer of hope on this wage subsidy program. We had called for wage subsidies. We wouldn't have confined it only to young people though. I think there's real issues there about what will happen for older workers. But the budget is a crushing let down for people on JobSeeker who are facing the prospects of no confidence, no certainty, no adequacy of their incomes coming to the end of the year. There's nothing in the budget beyond the end of the year in terms of fixing the level of social security for people who are affected the worst by this pandemic. And of course, we've got over a million people on temporary visas who still don't have any confidence about any kind of regular income. And of course, what we've got instead is this heavy reliance on tax cuts and that's giving the most dollars to people who've already got a job from people on higher incomes. We've got a missed opportunity on so many fronts here. We were really saying, we want jobs, of course we do. High confidence of job creation, you'd have invested in critical areas like the caring sector, childcare and aged care as Michele said. We totally agree. Very feminised. Many female workers are in those sectors. And we would have been knowing that we really needed would have been created very, very quickly. The economists have all said it, we'd said it, JobSeeker, and social housing. We've got nothing here and gee if people are worried, what are they worried about? They're worried about the affordability of housing and we've fallen so far behind in terms of investment in low-income housing. And we could have been guaranteed again of creating jobs. We've got this expression of hope. Small business owners being prepared to take a risk. Well, the government should have been carrying a lot of the responsibility here to continue to drive the job creation agenda. And so we're very worried about people who've got the least. They have been left behind at the moment. When will the government fix this Fran? In terms of dollars into the hands of people who need it and who we know will be spending in the real economy. And the retail sector said the same. Consumer confidence is everything. Demand in the economy will drive it. Give more money to people who really need it and that includes people who've got no work at the moment.

Fran: Okay Jennifer Westacott that's a fair point. We've all agreed that confidence is the core of this budget strategy. It's hard to have confidence in the midst of a pandemic anyway. But you know, why wouldn't, has the government had a misstep here by not making an announcement about what it will do on JobSeeker beyond December? It says it's going to announce, they're indicating it will keep some kind of lift in what was the old Newstart Allowance but it's not going to tell us that until later. Is that a misstep to not do that? To not signal what's going to happen after JobKeeper for instance? Are all of these missteps in terms of making people feel confident about their futures?

Jennifer: Look I don't believe that they're missteps. I think that we do need to fix JobSeeker and not return to the Newstart Allowance.

Fran: Of course we know that.

Jennifer: And you and I, Cassandra have talked about that many, many times, and I think it would be a terrible mistake to return to the Newstart Allowance. And I think it will be a real blow to people. I agree with Michele about childcare, but I think we've got to remember, as I said, what the task was here. The bulk of jobs was lost in businesses. This is about getting businesses confident. This is about subsidising them to take on extra workers. I totally agree with Michele about secure work. But you can't have secure work if you don't have work.

Fran: No, no but we have had work and we've had a lot of insecure jobs. We need a shift don't we to more secure work?

Jennifer: I agree with Michele about this, we need that shift and that's about businesses investing. Business investment was woeful before COVID. This is absolutely a game-changer, this business investment activity. And that is what we need so businesses start hiring people. They start doing that bit of extra plant and equipment. They start doing that upgrade of their automation. They start doing all of that stuff that starts to expand their businesses and allow them to put more people on.

Fran: But where are the measures that will force business to employ, for instance under the subsidy, in more secure jobs with some kind of wages growth which workers haven't seen for a long time?

Jennifer: Sure well a wage subsidy is obviously you've got to give people a minimum of 20 hours a week. And I think that's got to be monitored. I think Michele's concerns there about casualisation are really important. And we've got to make sure that's monitored. But in terms of the investment incentives well you can't get it unless you actually spend it on something. And that is, you know I've travelled this country for years, and years and years, talking to small, medium, and large businesses. They all have a particular thing that they've been holding back on. That they've not been doing because it didn't stack up. It's now going stack up. And when it stacks up they'll create a work order for someone, that'll create a job for somebody. These other bigger issues, I agree with Cassandra and Michele. They've got to get fixed.

Fran: Alright there's three minutes left.

Michele: Fran, yes I was just going to say the other big unknown here that will make a massive difference in terms of consumer confidence and has the danger to destroy that is whether the government is going to be listening to some business lobbyists who are arguing that we need to see IR changes that will actually cut workers’ wages and conditions. That would have a massive blow in terms of confidence for working people.

Jennifer: We're not arguing that Michele, as you know.

Michele: So it's that combination of needing secure jobs going forward. Conditions on money going to business. Support for the unemployed. But also ruling out that there's going to be changes in the coming weeks or months that would cut workers’ wages. The very people that have got us through this pandemic. So we need to make sure that the people who are going to spend which is, Cassandra is right, those who are unemployed as well as those on low wages. They spend every extra cent that they get. People on high wages save the money that they get. And that's where the problems are with the tax cuts. The other thing of course is we need to see public sector jobs. Public sector jobs are critical to recovery. Private sector has a role to play but so does the delivery of good public services.

Fran: Okay, Cassandra final word from you. I mean the government has promised that there will be, there was a down payment on aged care, 23,000 new homecare packages. But they said they will respond with significant funding when they respond to the Royal Commission's final recommendations in a few months' time. Are you prepared to accept that there will be jobs that will flow from that?

Cassandra: Well Fran what we're not prepared to accept is that we have to keep waiting. I think this is the issue. We're talking a lot here about confidence. Well, gee, do we need confidence in the aged care sector. Does the sector need to be able to start planning and being able to rely on what the government might deliver in terms of additional resources? 23,000 additional homecare packages doesn't address the 100,000 that are actually required. We need commitments here and they need to be in the actual budget. There is no additional appropriation at the moment for these areas. And we've got a big question mark over it. The government says it worries about mental health. It's put some important measures in this budget about mental health. Well, one of the best things you can do to protect mental health is to get people who are most vulnerable, most at risk including the aged care sector, people who have lost their jobs, confidence that they are going to be okay. And that's not what we're seeing in this budget overnight.

Fran: Alright we are out of time. Thank you very much all of you for joining us again on this post-budget wrap. Jennifer Westacott, Michele O’Neil, and Cassandra Goldie. Thanks for joining us.