National Press Club - Q and A

Event          National Press Club address

Speaker      Jennifer Westacott

Date            26 November 2019

Topics        Regional Australia, Strong Australia network, banking sector, red tape and regulation 

 

Sabra Lane: Thank you Jennifer. I just wanted to pick up on one of the points that you talked about towards the end there about trust. What about the erosion of trust with Barangaroo and Bourke Street? The fact that people's wages in outer metropolitan areas and regional areas, they feel that their flat wages aren't mirrored by flat profits and they’re also bewildered by some of the behaviour in corporate Australia, most recently the banks. What about responsibility in corporate Australia rebuilding trust with workers and consumers?

Jennifer Westacott, chief executive, Business Council of Australia: I couldn't agree more. I think we have to do that Sabra. But I think we've got to, as our new president Tim Reed said last week, we have got to work harder as a business community to stop eroding that trust. We have got to make sure that we fix these problems that you've talked about and that we fix them quickly. But we cannot have the risk that a set of policies is based on resentment - and I understand that resentment - I really do, and I understand that anger. They are not going to help the people that you have just talked about. Those people need a productive, thriving business community so they can get a job, stay in a job, get skills and prosper. And we've got to be very careful. So no one understands more than I do the anger that people feel about the things that you've talked about. And I understand that anger and I share it with them. But we've got to be very cautious as a country that we don't unleash a set of policies that won't harm those boardrooms in Barangaroo and Collins Street, they will harm the people I have talked about.

Sabra: David Crowe, who's this year's EU Qantas Journalism Award winner. 

David Crowe: Thank you very much Sabra. David Crowe from The Sydney Morning Herald and The Age. Thanks Ms Westacott for that speech. So many ideas there. I do want to ask about something that is in the news this week and that is China and foreign interference, a major story this week. Now, we don't only see it in relation to politics, in government, we do see it in relation to business as well. We see instances of IP theft, we see instances of cyber-attacks and so forth. So, could I ask you, as a spokesperson for the business sector, when you talk to chief executives, are you hearing concerns about foreign interference in business on these fronts?

Jennifer: Absolutely. I don't hear specific examples of it. I think everyone is very concerned about this David. I think certainly on cyber, I don't know a single corporation that isn't doing an enormous amount of amount of work here but they know that as soon as they fix one problem, the people on the other side of this, who are very organised, will come with another attack. So it is a constant process of preparing of systems and your people so that you're not vulnerable to cyber-attacks and people are very conscious of interference. And we have to as a country face up to that, we can't deny it. There is no sector of the economy that is immune from that. But we also have to make sure that we don't forget this is our largest trading partner. I can't imagine what Australia would look like without the economic growth of China. And I can't imagine what we'd look like in the future without it. So we've got to get the balance right between those strategic and security issues and of course those economic and business issues. I do think that Australians need to understand something - we are governed by very good institutions, you know, DFAT, Home Affairs, ASIO, an array of those institutions. Australians should go to bed at night knowing that we are well governed by those institutions but nobody can take their foot off the pedal here. Nobody can take their eye off the game here. This is a persistent threat and as soon as you fix one problem another one will pop up.

Sabra: Annika Smethurst.

Annika Smethurst: Annika Smethurst from the Sunday Telegraph. You spoke about it a little bit but last week the Prime Minister said that it was time for the business community to lobby for changes to enterprise. Do you think that's fair or do you think it's time for action? Are you willing to make that case or is the information already out there?

Jennifer: Look I think we've got to keep making the case. I think people are entitled to understand how these changes will improve their lives and I think that is our obligation to do it. I think it is our obligation to be honest, to work with the union movement to make sure that we do this constructively and positively. And we make sure that there are not unintended consequences. Last year I stood up here and I made a call for the union movement to sit down with us and try and make sure that we save the enterprise agreement system and I continue to ask for that because this is the system that's delivered higher wages. This is the system, that Bill Kelty and I were recently talking about, that changed productivity in Australia. So I think a lot of the information is out there and you would be amazed how many times people in regional communities bring this up. You know, they do regulation first, “killing them”, and then they get to workplace relations pretty quickly after that. But we need to take the Prime Minister's request very seriously and explain it to people and explain why will it make your business better, why will it make your job more secure, actually, because an inflexible workplace relations system is a recipe for less jobs, not more jobs.

 Sabra: Tim Shaw.

Tim Shaw: Thanks Sabra. Tim Shaw, member of the National Press Club board. Thanks Ms Westacott for your address. Membership to the BCA has benefits but it also has responsibility. Members of your BCA are the major banks, they have closed bank branches right across regional Australia. Your members also are in the telecommunications industry can't get the kind of telecommunications coverage right across the nation - these are members of your organisation. You say today, we need to audit the strengths and weaknesses of the regional areas. What responsibility do your own members bear in that audit, to look for where the weaknesses are and how their businesses can improve those opportunities?

Jennifer: Well I think they have to. I think that we have to look across regional Australia as a business community and we have to say why wouldn't we think about our next data processing centre, our next back of house activity and go to a regional community? And to sit down with relevant government agencies and say this is what we need - which is not an economic zone at all. It is basically don't take six years to do the planning approval, that might be a start and together work out how we can strengthen regional Australia. But don't under estimate what I have said about the strength of what people are already doing. And look I'm not going to defend the actions of certain banks this week and I'm not going to make excuses for them. But I will say this, a banking sector that is weakened is not going to be doing the things that I've talked about today - lending to small business, giving that first home buyer access to a loan. We have got to get the balance right. We have a good banking system in this country. There is no doubt that we have let people down but we've got to make sure that we retain a strong banking system so that we can do the things I'm talking about. And I want to sit down with corporate Australia time and time again and say why couldn't we do a bit more in this region. What is really important is I haven't been doing this on my own. Chief executives have been coming with me and they have been looking at and thinking about 'gee, maybe we could do a bit more here' and I want them to do a bit more here because we have got to make sure that the story of Australia is not the story of Melbourne and Sydney, it is the story of the whole of Australia.

Sabra: Greg Brown of the Australian.

Greg Brown: Ms Westacott, Greg Brown from The Australian. Westpac is a member of your organisation, do you condemn the way this crisis was handled by Brian Hartzer and Lindsay Maxsted? Should they have more quickly identified - certainly Mr Hartzer - should have fallen on his sword quicker? Should have Lindsay Maxsted indicated earlier that this was so bad that senior staffing changes would need to be made? And doesn't this just undermine the efforts that you're talking about and what the federal government is trying to do in implementing policies that are more pro-business?

Jennifer: There will be lots of analysis about what the bank should have done and when they should have done it but let me make this point, the decisions they have made today are the right decisions. They are the decisions that basically clear the air for the bank. They clear the air for the community and they give the bank an opportunity to fix the mess. That’s really important. That is what we should be focused on. How do we fix this mess? How do we make sure across the banking system this does not happen again? Everyone should be sitting down and looking at their systems and saying, ‘let's make sure this isn't in our system’. Does it make it frustrating? Of course it makes it frustrating. Of course it is frustrating. But at the same time, I have a long game here because I passionately believe in this country. I believe in its opportunity. I believe in its potential. But I don't want to see us now go on a bank bashing bonanza because it will be bad for the people I have talked about. Banks have to get their house in order, listen to the community, have to fix the things that aren't working. But the Australian community needs to remember that we do have a strong banking sector. If we don't have it, those people in the communities who desperately need the credit so they can ramp up, stay in business, do not want the unintended consequences of a bank bashing spree that will make credit harder and make our institutions weaker.

Sabra: Sarah Ison.

Sarah Ison: Thank you so much for your speech. The federal government has stared down big business saying it is staring down big business and want to see them doing more for the everyday hardworking Australian and show how their proposals are doing that. Do you agree with that sentiment? Does that need to be potentially for the regional hardworking Australian as per your speech? How is that message received by you and some of the big business members that you have? Is the Morrison Government a friend to big business in the context of this?

Jennifer: Let me make the first point. I am always perplexed that people don't think that the interests of business aren't somehow in the interest of the community. What is business? Business employs 11 million people. Business is the small business, the suppliers, the contractors. Business is Bunnings. Business is Coles and Woolworths. There is this view that business is kind of abstract entity that is not about people. It is about people. So in explaining things to the community, the first thing I think we've got to remember is who is business and what is business doing? Employing people, giving them a job, skilling them up. Paying $100 billion of taxation over the forward estimates. But yes, we have to do better at making sure we break that perception down that somehow business is not part of the community. It is the community. We do have to be better at explaining things to people and why it will benefit them. Why it will benefit an individual family in an individual community. And to my point that I have made throughout my speech, we have to make sure as a business community we do more for the whole of Australia and that we really double down. Why can't we do that in Townsville? Why can't we do that in Cairns? What would hold us back and be honest with governments about what those things are, which is never, if I can honestly say if I am talking to business about tax breaks. It is not. It is particularly about, ‘don't take six years to give us planning approval’. ‘Don't bog us down in red tape because we can get something done in another country much father and much quicker’.

Sabra: Nick Stuart

Nick Stuart: Thanks for your speech. Going back to the issue that you began with. You began by talking about the need for us to come together as a community, not to be divided into two sectors. You also talked about responsibility. Aren't you shocked and horrified when you hear of business executives, CEOs, members of boards, particularly chiefs of boards who are not prepared to immediately accept responsibility when they find their organisation has committed something like accentuating payments for paedophilia? Doesn't that absolutely disgust you? If not, why not? And why is it that you don't immediately disassociate yourself from any activities like that? Why did you pause before saying, ‘we need to look after the banking sector’. Isn't something like that just beyond the pale or do you think, ‘oh well that is sort of beyond the pale but not quite, it’s only paedophilia’ or whatever?

Jennifer: No, I did not say that. I said it does disgust me. It does anger me. I was very clear about that. I was very clear that what the Westpac Bank has done today is the right thing to do. The right thing to do for the bank and it is the right thing to do for the community.

Nick: Why did you take so long?

Jennifer: That is an issue for the bank. That is not an issue for me. That is an issue for the bank. The bank now needs to sort that mess out. I was very clear; I do find that behaviour appalling. But I am saying this, that we’ve got to be very cautious as an Australian community that we do not unleash a series of policies that weaken a sector versus a particular bank. So I am not in any way ambivalent about my views about this. Not at all and what has happened today is the right thing to do.

Sabra: Michael Keating.

Michael Keating: Michael Keating from Keating media. 94 per cent of small businesses in the ACT fail within the first 10 years, clearly we haven't got the regulatory settings right. As you’ve mentioned you would like to create precincts of speciality to assist. Should we go further than that and have, for example, special economic zones like some of our Asian and Middle Eastern neighbours? And what are the regulations that need to be repealed?

Jennifer: Let's unpack that a bit. Small businesses need a lot of support and there will be a natural kind of turnover because some people try things and they don't work. That's part of, I guess, an innovative economy. But boy we could make it easier than we are making it. You look at a small business and they will have 15 licences, 16 awards, they spend their weekends filling in forms rather than thinking about how to grow their business. We’ve got to make that easier for people, Michael. We can't continue to put pressure on small business like that. We've got to make it easier for them to get finance. We have to make it easier for them to stay in business. We have to make it easier for them to employ the next person.

Special economic zones is a debate we have had in Australia for a long time. The problem with an economic zone is that it creates a boundary and on one side of the boundary you can do something and on the other side you can't.

The thing I think has been very good in Australia is the city deals where you've got a partnership between local, Commonwealth and state governments. Now, they have worked magnificently in Western Sydney where there's been a very clear agreement about here are the priorities and how can we get that done. I'm not sure that special economic zones with taxation changes are the right thing for Australia. If you look at where they exist, they exist in very small countries like Singapore where you’re not talking about boundaries across large geographies, so I'm not sure that’s the solution. I think what we have to double down on are the things that I have talked about in my speech, that have been generated by what people told me. Making sure that all of our economic settings are right, make it easier to do business, make it easier to stay in business. Double down on making sure that our strong sectors continue to be strong, really double down on those emerging sectors and those new sectors. Double down, like we've never double down before on skills, particularly for many small and medium businesses who will not have the scale of big academies that corporate Australia has. Double down on making sure that those industries can thrive and double down on making it easier for them to scale up. This is why I am calling for about investment allowance. Make it easier for them to invest in their equipment. Scale up and employ more people. I think if we do those sorts of things we will make it easier for small business to thrive and make the economy grow faster but make sure that is done across the whole of the country, not just in Melbourne and Sydney.

Sabra: Why is higher growth the answer. I know someone like Dick Smith would say more immigration, more stress and strain on cities recently struggling with the population we have now, that more growth, higher growth is not the answer, what would you say to him?

Jennifer: It depends on what you mean by growth. I'm talking about economic growth here, I am talking about, what is economic growth - it is more money in someone's pocket. That’s economic growth. People can talk about GDP and lots of statistical colour and movement but fundamentally a growing economy means somebody has more money in their pocket and governments have more revenue to spend on the services that people need. That's growth. Part of that is population, what I'm calling for today is an approach that would allow us to take the pressure off some of our cities by making sure that people have jobs and enterprise and economic activity in our regions. You can't just ask people to go and live in a region and then not do the work to create the economic activity that will keep them there and keep them working and keep them well paid, that's what I'm calling for. To me it is a win-win. Create the critical mass in some of the regional communities, you get people moving up there, the kids stay there and go to school there. You get the multiplier effect of small businesses opening and people putting contractors on and people sending their kids to uni, more scale to get the university working, that is the sort of economy I am talking about. That is growth, that’s a good thing.

Sabra: Please join me in thanking Jennifer Westacott.