Speakers: ABC AM, Host Melissa Clarke; Business Council of Australia Chief Executive Bran Black
Topics: Middle East conflict, supply chain impacts, Global Investment Competitiveness Index
E&OE
Melissa Clarke, Host: Bran Black is the Chief Executive of the Business Council of Australia. Bran Black, thanks for joining AM this morning.
Bran Black, Chief Executive: Thanks so much for having me on the show.
Melissa: How prepared are Australian businesses to withstand another global economic shock just a few years on from all of the Covid disruption?
Bran: Well, I think it’s a good thing that you mentioned Covid, because it reminds us that this is a supply chain issue, and we need to be planning accordingly. That’s what we’re seeing right now.
So we are seeing businesses and government work together to understand the different supply chain scenarios. And I do stress there are many supply chain scenarios, we’re trying to work through and understand what they look like.
But it’s uncertain. We know that the war has an uncertain duration. We understand, of course, that the war has uncertain consequences. For us, for Australians, that means that the very best thing that business and government can do is work together, and that’s what we’re seeing happen right now.
Melissa: Should Australian businesses be encouraging staff to work from home, or limiting travel and other measures that will reduce the demand for fuel?
Bran: Well, what we’ve suggested is that wherever possible, if people can utilise public transport, that would be preferable. Of course, we understand there’ll be instances in which that can’t be done, but I do stress that if you can use public transport, and if you can continue to come into the office, as you’d ordinarily do using your ordinary, flexible working arrangements, if you can come into the office and continue to support small businesses, we’d certainly urge that.
Melissa: You mentioned the complexity of the supply chain. We’re seeing most immediately high fuel prices having a big impact on the transport sector, which flows through to freight costs and affects a lot of things down the chain. So who should bear the cost of higher fuel costs for truckies? Does that come down to the transporters, or should businesses help pay that? Should consumers, should government?
Bran: I think everybody is trying to keep costs down at the moment as much as possible, and that’s because, of course, to state the obvious, people want to make sure that they remain as competitive as possible.
But we are seeing that costs have increased, and that’s due to the increased demand that we’ve seen across our economy. We also know that because of that demand, that’s translated into increased distribution costs. And what we’re seeing in Australia, I really stress, is entirely in line and consistent with what we’re seeing play out in other overseas jurisdictions as well.
In those circumstances, the best thing that we can do, and I really come back to that point that I made at the beginning, the best thing that we can do is have businesses and government work together to understand where the supply stresses are and to put in place mitigating steps.
Now, we’ve already seen a fuel coordinator appointed to help do that. We know that the fuel companies can engage directly with smaller, independent suppliers now, and that’s one step that is useful in the context of trying to mitigate against broader demand challenges.
But fuel isn’t the only concern that we need to address. We know that there are other issues that may well come down the line in the context of trying to manage the outcomes as they roll on of this conflict, and we need to be working together to mitigate against those outcomes.
Melissa: Now the Business Council has been looking at the level of foreign investment in Australia, with your analysis showing Australia’s competitiveness in attracting foreign capital is slipping. Why is that?
Bran: Well, one point that I’d make right from the outset is that it’s important to note here that the Treasurer made a really important note last week, when he said that in these times of uncertainty, and of course, as we’ve just discussed, it is very uncertain at the moment. In these times of uncertainty, the best thing that we can do is try and back in Australia as a competitive destination, try and be more productive in relation to our own settings, so that we can enhance the quality of life for all Australians in the long term.
What our study shows is that Australia ranks presently 21st of the 42 countries that we assess. And what we’re saying is that we do extremely well in some areas, like trade, where we rank second, and that’s come down to a concerted effort that governments have made.
What we’re also saying is that there is scope for us to improve, particularly in areas like regulation and taxation, and if we can put our shoulders to the wheel in those areas, as we have with trade, then we can climb the rankings. That’s important not for the sake of just winning. It’s important because it translates into investment that increases the quality of life for Australians on a day-to-day basis.
Melissa: Bran Black, thanks very much for joining us this morning.