Topics: 2026 Intergenerational Report
E&OE
Sara Tomevska, Host: Bran Black, welcome to Afternoon Briefing. Look, does this document tell a good or a bad story about Australia’s future?
Bran Black, Chief Executive: What it shows is that we’ve got some real challenges in front of us. The document is fundamentally predicated on the assumption that we achieve a productivity growth rate of 1.2 per cent. Now, what that does is lock in our capacity to do lots of things that we would like to do to grow our economy, to pay for services, etc.
But that is a really challenging assumption because, as things stand right now, we’ve had productivity decline by 0.2 of a per cent in the last 12 months, and if you look at our performance in the last six years of this decade, it’s actually gone backwards by 0.1 of a per cent on average each year.
So we’re a long way off that assumption, and that has a real consequence for people day to day, because productivity is ultimately what lifts real wages, which means you feel like you’ve got more money in your back pocket at the end of the working week.
Sara: So, is it optimistic or is it just unrealistic, this 1.2 per cent productivity growth assumption?
Bran: Well, we can always change our future, that’s the great thing about these reports. They give you the foresight to look at what your future might look like, and then to make decisions to avoid different consequences.
And we would say very clearly that this report is a burning platform to make sure that we invest in productivity enhancement, so that we can improve living standards for future Australians.
Just to give you an example of this, what we’ve seen as against the 2023 Intergenerational Report, and this report is that Australians are in fact, as things stand right now, $2,000 worse off. So in 2023, there was a projection in terms of per capita GDP. On the latest ABS data, we’re already $2,000 behind that. So these assumptions matter. Imagine for viewers what an extra $2,000 in their back pocket does at the end of each week.
Sara: Do you think the I guess reliance on artificial intelligence to drive a lot of the productivity growth, as well as reduce government debt by half a trillion dollars, do you think that is excessive reliance on you know the digital revolution coming good, or is that just the trajectory that the world is heading in, and much of our economy will be shaped by this new technology?
Bran: I think it’s very fair to say that a lot of our economy is going to, as you say, be shaped by the introduction of artificial intelligence. But we absolutely cannot afford to put all of our productivity eggs in the AI basket. And at least at first blush, it appears that this report does that to a significant degree. We do see other economies, other countries that are making investments not just in AI, but in making their fundamental economic settings more competitive to attract investment as well.
Sara: So, what other baskets should the Government be putting its eggs in?
Bran: So, what we say is that you’ve got to look at those areas where we’re not performing so well, where we’re not competitive right now, and address those. So, regulation, taxation, and investment openness, so that the quality and the speed and timeliness of our investment approval processes really stand out.
On our analysis, as against the countries we compete with day to day for investment, Australia is a long way behind the pack. We’re about 37th or 38th against the 42 countries that we measure against.
Sara: Fertility rates are projected to reduce to 1.3 children per woman over the next 40 years. At the same time, the number of Australians aged over 85 is going to triple. Would you support a Costello-style baby bonus? Do we need to incentivise Australians to have more kids?
Bran: Look, I’ll leave that particular point to others to comment on. But what I will say is that we are seeing through this report that the proportion of Australians working to support the elderly Australians who are retired over the age of 65 and leading increasingly long lives, which is of course a good thing, but what we see is that that pressure on that working population is increasing, and it is increasing a lot.
Sara: But does it also underscore the need for targeted skilled migration?
Bran: We believe we should always be focused on targeted skilled migration. I’d go so far as to say that any migration debate that starts from the perspective of simply let’s have a particular net overseas migration number, that’s starting from the wrong spot.
What we need to be starting from instead is the question of what are the skills that we need to drive the economic growth that will ultimately enable us to lock in a better standard of living, and to your question in terms of baby bonuses and so forth, what I would say is that ultimately the outcome that we’re looking for is the scope to increase our economy’s size, to grow the economy, and the best way to do that is, of course, to encourage more investment through more competitive settings that make businesses want to come here and invest more in Australia, but it’s also to make sure that we’ve got the people that we need to support the projects that ultimately deliver that investment on the ground day to day. And for that, you’ve got to look at your skills processes internally, so domestic education processes, but it also means having a really strong focus on skilled migration too.
Sara: On AI, the Prime Minister is obviously at the UN this week talking digital dangers and regulating artificial intelligence. We know at home Labor is considering changing copyright laws to ask creatives to opt out of tech companies scraping their content to train their data models, what are you hearing from members? What is the Business Council’s view on that kind of opt-out model?
Bran: Well, it’s very similar to the model that we’ve been putting forward now for about 12 months, and what we’ve been saying is that there is actually the technology that exists already for content creators to be able to say, “I don’t want AI to train off my content unless I’ve got a licence with the AI company.”
Sara: So you’re comfortable with an opt-out system?
Bran: Indeed, we are. We think that that’s the most efficient way of managing this. We recognise, and it’s really important to stress, that creatives should get recognised in the way that they want to be for their content, if it is going to be utilised for the purposes of training AI.
But if you think about my own website with the BCA, not everybody is going to necessarily have an issue if AI is trained on their content. So it should be the case that on a case-by-case basis, you can say, “Well, this material is okay to be trained on, this material is okay to train on only if there is a licencing arrangement in place, and I’ve specifically made that direction through opting out.”
Sara: Just quickly over the weekend, the Coalition revealed a plan to halve the fuel excise every time the price of Brent Crude Oil exceeded 100 US dollars a barrel for more than two weeks. Is that a good idea?
Bran: Well, I think this needs to be placed in context. There are a lot of people that are doing it tough, and we see that all sides of politics are looking at different opportunities to provide support. We understand that in those circumstances, it’s not uncommon to have some type of payment from government to the people.
But what we would always say is that you’ve got to be very careful about the way in which you do this. You’ve got to make sure that you reduce the scope for inflationary pressures, and you’ve also got to make sure that you reduce the scope for this to unreasonably burden the Government’s fiscal position.
What we would say is that any type of policy like this should therefore be targeted to those that are most in need. It should be temporary, so we’re very clear on the circumstances in which it applies, and it should be proportionate. So, what is the real risk that we’re facing into?
And fundamentally, I would say that, in terms of the announcement that we’ve seen, I don’t think it’s appropriate that people on higher incomes, like myself, should be eligible for these types of assistances. It should be targeted for those who need it most.
Sara: Bran Black, thank you very much for your time.