Event: Interview with Ticky Fullerton, Sky News
Date: 29 August 2017
Topics: Economic growth, tax cuts, energy policy, marriage equality
Ticky Fullerton, host: Well, one of those people, who's mission it is to help drive business investment and productivity, is Jennifer Westacott, the CEO of the Business Council of Australia and she joins me now. Jennifer, thank you so much for coming in. Now, how do you, you talk to business all the time, am I right? How do you see business conditions out there?
Jennifer Westacott:, Business Council chief executive: Yeah look I think your summary is really good. I think it's very patchy. I think a couple of things to say, we are starting to see the product of a long period of low growth. I mean we talk about this 26 years of uninterrupted of economic growth. That means 26 years-
Fullerton: Here in Australia?
Westacott: Yeah. Without a recession.
Westacott: But we've got a GPD number with a two in front of it and we're used to having a three. So I think a whole lot of expectations have been built off growth at three and a half percent and now we've got it in the two, so lower wages, we've got business investment as a share of GDP. Low, as low as ... Since 1994, we were in recession in 1994.
Fullerton: Why is this happening?
Westacott: And I think there's a number of things. Businesses still tell me that they are feeling the competitive pressure. They're starting, you know, as the rest of the world sort of picks up, we haven't done some of the reforms that we should've done to make the economy more competitive. Cost structures are high. The whole kind of question of tax, but not just tax, you know, people sort of tell me all the time, it's hard, very hard, to do business here. It's hard to get deals going.
Fullerton: Because cost has come out in the mining sector.
Westacott: Correct, yeah.
Fullerton: But elsewhere, it's being very difficult.
Westacott: It's been very difficult to take cost out and of course, then you've got this kind of volatility you've talked about. You've got global volatility, you've still got economic volatility and you've got political volatility. And you've got uncertainty over a whole raft of kind of big policy issues. I think when you take all of that collectively, the animal spirits just aren't there. And I think-
Fullerton: Okay, so with that we've now got the opposition and Bill Shorten in particular, running, I would say, a very effective campaign, anti-big business campaign. Not just the tax, but the banking sector obviously, gas, ... It's really hitting home, presumably.
Westacott: Well, it's an anti-business campaign. Not just an anti-big business campaign. I mean, this is kind of “I’m not going to commit to continuing to pass on the company tax cuts that were passed by the Senate for businesses with turnover of $50 million.” I mean that will hit small business, the whole question of trust will actually hit small business. So to me it's an anti-business agenda, and I just think, you know, I mean my job is clearly to kind of say that there are real consequences of an anti-business agenda and people have got to be very careful where we head, and in a policy sense. Because you know, people forget. It's business who employs ten million of the twelve million people who work in this country. You know, if business is weak, the community is weak. If businesses don't do things in this country, and they decide to do them somewhere else, that's jobs that won't come here, that's wage growth that won't come here.
I share Mr. Shorten's kind of desire for Australians to earn more, for incomes to rise. But you know, there's only one way for incomes to rise, unless you get a Terms of Trade, and that is for productivity. And if you don't have that productivity reform, lower taxes, easier regulation, easier to do business, capacity for companies to adjust, you won't get the wage rises. So this is kind of ... I think it's really important to tell the community what are the consequences for an anti-business agenda, which is a low-growth environment and lower living standards.
Fullerton: Okay. Now, I've got to ask you though, business hasn't helped itself in all of this, in terms of its own reputation and branding. We've now got the CBA which today is smaller than BHP, it's no longer the largest company. It's now had scandal after scandal. And I should say, look, sitting on the BCA board are Ian Narev, we've got your President, Grant King, who has actually had to remove him ... Or just decided to remove himself from the BHP board-
Fullerton: Now, it's not a good look for the BCA, is it?
Westacott: Well, you've got to take those two issues separately. Grant is a very principled person, a person of great integrity. I mean he made a decision to take himself out of the selection process because he was being attacked by activists, and he decided that he would not put BHP through six months of that kind of activist attack. And I think that's a very principled thing to do. And I think Grant is a fabulous President of the Business Council, because he understands these complex global markets like energy. He understands you know, what makes business work. He understands what happens when things in the world economy go wrong, and the impact that has on companies. But he's also got a passionate commitment that the job of business is to help society make each Australian's lifestyle and living standards better. And you know, I'm really proud that he's President.
Fullerton: But he's ... But there you were, you were all your board was up there in, on display in Canberra, pushing for tax cuts a couple of months ago.
Fullerton: If I list them, there's Grant, there's Andrew Mackenzie who's also under pressure of BHP-
Westacott: Andrew Mackenzie's not on the board.
Fullerton: Not on the board, no.
Fullerton: But as CEO. Catherine Tanna of course, from BG*, one of the companies that the Prime Minister is sort of ticking off over electricity prices, and Ian Narev as I say. Look, is there going to be change on the board.
Westacott: Well, there's always renewal of the board and there are a lot of people who want to get on that board. I mean, we don't have any shortage of people waiting to get on the board. And we always renew the board, but look, let's just take Cath Tanna. I mean Cath's ... The whole energy stuff is not about her personally, it's about, you know, we can talk about energy later, but it's a very complex set of policy failures that have led us to this point. And she has been a very, very strong advocate for energy reform and for making sure that we actually get energy certainty.
And look, the Commonwealth Bank, I'm not going to add to the kind of stream of commentary on the Commonwealth Bank. It's clearly a very serious problem and the bank is working cooperatively with the regulators.
Fullerton: Well, one of the things you have done to sort of counter this constant attack of big business is actually deliver this memorandum of understanding with small business, now, on the face of it, that looks strategically quite sensible. But what's behind it, what's the importance of it?
Westacott: Because I think we want the community to talk about business, not big and small business. Because it is one interdependent ecosystem to use that jargon. I mean, there's $550 billion a year of interaction between big and small business-
Westacott: You can't have small business without big business. You can't have big business without small business.
Fullerton: And we had you and Peter on the show just a couple of days ago when you announced this. Now, you've got common goals, don't you?
Westacott: Absolutely. I mean, we share a lot of common goals, and we also acknowledge that there are sometimes power imbalances between big and small companies. That just is ... The scale of these companies is huge. And he and I decided that we're going to sit down and work out those problems, like we have with supplier payment. He came to talk to me about supplier payments a while ago and said, "Look, we have to get this sorted." So we said, "All right, let's get a voluntary code, ask companies to pay in 30 days. Ask them to pay on time. Ask them to put in place electronic invoicing arrangements-
Fullerton: I know it's really beginning to work
Westacott: And it's really beginning to work, and we're starting to see-
Fullerton: What about power prices? You mentioned earlier…that's another thing.
Westacott: Absolutely. I mean he and I have talked about this a lot. I mean this is really hurting small business now. If you've got energy price increases of 20% plus, you've got some big, big cost questions. And then it's always in context of you've got other cost pressures as well. I mean we've just got to get a sensible approach to energy policy, and we've got to, I think remember a couple of things. We're here because of bad policy. We're not here because of some kind of act of kind of, you know, some external kind of force from Mars. We're here because of bad government policy, and it's good government policy-
Fullerton: Well, you've just seen Victoria announce their energy policy.
Westacott: You know, and renewable energy target, when all of the advice is for the states not to do that.
Westacott: Not to set ... We've got moratoriums across the state-
Fullerton: It is extraordinary.
Westacott: It's extraordinary. We need, can I ... One of the things I really want to see, Fullerton, is a debate that talks about how do we make it more secure, reliable, affordable, and how do we meet these carbon reduction targets which governments have said, and that's fine. But you know, we've got to stop talking about CETs, EISs and ETSs. We've got to say, what is it we've got a fix for, and how do we fix it, and the big challenge is how do we get investment because capacity's coming out of the system. People need a trigger for investment-…they need certainty. I mean, are you going to put $2 billion of your shareholders' money at risk when you can't price the risk of carbon policy.
Fullerton: No. Well, exactly.
Westacott: And they're not going to do it.
Fullerton: Okay. Well look, one of the reasons we can't get to this, is because there's so much time, as I've said, at the moment, on this idea of marriage equality, same-sex marriage. Is there going to be any resolution to this after the postal vote, do you think? And how are you approaching business on this?
Westacott: Yeah, it's a very good question. I hope there is a resolution after the postal vote, I mean, I think, in fairness to the electorate, if the number's got a five in front of it, you know, then there has to be some kind of conscience vote. I mean you can't now just kick it down the road. I mean you can't have these votes and just say, "Well, we want to kick this down the road." So you would hope that Parliament acted responsibly and allowed a vote to proceed, and then obviously, you know, get the legislation drafted properly. Look, a lot of companies support this. A lot of companies have taken a very strong stand to support it. It's not for us to tell companies to take a position, it's for them to decide. I think a lot of companies are trying to make sure people have got the information about what does it mean in terms of the kind of mechanics of a postal vote.
But clearly, this is not the first government to be distracted by lots of issues. We would love the government and the opposition to be talking about how do we accelerate economic growth, how do we make our country more competitive. But look, you know, my job is to keep, as I have done for a long time, to keep pushing on with what's the reform we need, because ultimately, you know, I really care about people's living standards and we've got to get the debate as quickly as we can back to those issues of how do we get the economy to grow faster. And you know, these debates are very important, the same-sex marriage debate for many people.
Hopefully it'll be done respectfully and in a courteous way, but we've really got to make sure government and the opposition, you know, once that's resolved, and while it's being resolved, keep their focus. What I think Australians are worried about is their wages aren't going up. Their power bills are going up. They feel that they're not getting ahead and we need to give them a sense that there's a clear sense of direction about how that's going to get solved.
Fullerton: Jennifer Westacott, it's always good to talk. Thank you so much for being here.
Westacott: Thanks very much.
*Ms Tanna is managing director of EnergyAustralia
Media contact: Rheuben Freelander, 0417 814 904