Topics: Productivity Commission inquiry into business dynamism, red tape, interest rates
Tom Connell, Host: Joining me live now is Business Council of Australia CEO Bran Black. Thanks for your time.
Bran Black, Chief Executive: Thanks for having me.
Tom: What did you do when you read this, was this a sort of spit out your coffee moment?
Bran: Well, I think I have to start by saying it’s always a good thing to review Productivity Commission reports because they make a lot of good, useful recommendations, and there’s plenty in that report that we can usefully look at. But the key point here is that if you’re talking about business dynamism, you cannot ignore tax and industrial relations.
I’ve travelled all around the country. I’ve met with businesses in my membership, outside my membership, small, medium, large, and whenever they talk about the key challenges that they face there are three that they talk about: it’s tax, it’s industrial relations, and it’s regulation. So, if you exclude from consideration two of those things, you are missing an awful lot.
Tom: And regulation is fine. In the time I’ve been in Canberra, there’s been endless talk about red tape. Everyone seems to want to cut it. So, there’s no debate over the ideology there, I suppose, it’s just how you do it.
But leaving those two out, I mean, have you had discussions with anyone from the Government today? Have you said what’s going on, was this deliberate? Does it seem as though they’re just incurious about improving productivity?
Bran: Well, I think there’s certainly an intention there. Everybody wants to improve productivity, and the key point is we know how to do it as well. We have to be looking at tax. We have to be looking at industrial relations. Those measures or those areas are well and truly holding business investment back.
We know that in order to increase our productivity and lift it, frankly, out of the negatives and into the positives, we have to be looking at opportunities to increase business investment. But businesses won’t have the confidence to invest in the absence of good settings that facilitate them feeling as though ‘Yes, now is the time for me to commit capital, now is the time for me to think about my operations and those next steps’, and it doesn’t matter if you’re talking about a small business, a medium-sized business, or a large business, that’s the perspective that comes through whenever I have these conversations.
Tom: But how can it be serious if it’s leaving out these elements? If it’s a priority to increase productivity, you have to be willing to at least look at IR, and a lot of big changes they’ve made, and they’re not. Doesn’t that show that they’re words and they’re not action?
Bran: Well, you’re dead right. You cannot be serious about addressing productivity if you are not focused on taxation and industrial relations, amongst other areas, of course, but those two, in particular. And we look at the tax changes that have recently been announced slashed passed, and what they do overall is increase the burden on business. That’s the opposite of what we need to be doing right now.
You look at the industrial relations changes that we’ve seen at the moment, and some of them, like the intractable bargaining changes that I know you and I have spoken about in the past, they actively take productivity off the table in enterprise bargaining discussions, and that is the opposite of what you need to be doing.
In those discussions, you need to have a situation in which workers can, in good faith, put forward claims for better conditions or more pay, and employers can say, ‘Well, we need to see more productivity as well,’ so, how do we find that middle ground?
With the changes that have been passed, you take away the capacity for that type of really useful, constructive engagement to occur. There are some key areas, therefore, where you could really start if you were serious about addressing productivity in terms of those types of workplace changes.
Tom: You’ve obviously been seeking to keep good relations with the Labor Government. Is it time to switch tack? Are you considering a specific campaign against elements of the IR changes and the tax changes?
Bran: Well, we’re very active in calling out the changes that we’ve seen in terms of tax and in industrial relations.
Tom: But I mean, you know, big dollars campaign to sort of go, ‘Well, let’s go to the barracks now.’
Bran: Well, we’re very much looking at making sure that it is very clear what Australia’s problems are, so that we can start having those conversations that go to precisely what the solutions are that we need to put on the table.
We can’t continue to say, ‘Well, look the challenge over here is supermarkets putting up their prices,’ for instance. That’s not the real problem that we see. The real problems, as you say, are the productivity challenge that we have in Australia. And so, where we are prepared to invest our time and money is articulating what those problems are, so that we can get the solutions on the table as well because that’s the key here.
Tom: How do you do that specifically? Because if you go back to 2007, the unions had a very effective campaign against WorkChoices. People knew what the name was; they broadly knew what it did. Could you do something similar on the other side, and would you need to be specific about it? Is there a particular measure you’d single out that could be part of a campaign?
Bran: I think you’re dead right, and we’ve spoken as well, I think previously about some of the work that we’re doing with other industry associations in terms of trying to commence this type of process, and you’ll certainly hear more about that coming into the New Year.
But my sense is, and this reflects on the point that you’ve just made in terms of the unions and the 2007 campaign as well. My sense is that this week has been a line in the sand. This week has been a point where there is broad recognition now that the present approach that we’re taking to our economy is not working. Something new is required, and that new thing is the type of productivity enhancement that we, as business groups, have been consistently calling for, for a long time.
So the challenge that we’ve got, and this is an obligation that we have to take on as business groups and as business more broadly, is to articulate, as I say, what are the real problems, not the red herrings, not the placebos, what are the real problems, and therefore, what are the solutions.
This is the kind of approach that we see in other countries like Canada, where Mark Carney has said, ‘You’ve got a real problem here. If Canada wants to address its challenges, it needs to take real action.’
Tom: So, just quickly, it sounds like, so, correct me if I’m wrong, it sounds like you and other similar organisations are considering switching from ‘Let’s be conciliatory, what can we change inside the room’ to ‘Well, we just got to go big and go public on this.’
Bran: Well, we are being very firm and will continue to be very firm with respect to what the real problems are. We’ve been calling them out now for some time. We’ve been particularly clear in the last couple of weeks, and especially in the last week following the most recent rate rise.
But I do agree, one of the things that we need to be doing going into the New Year, and which you’ll hear about more in due course, is how we can work together as industry associations and with business more broadly to be clear on what the problems are, so hopefully we can build a support base for what those solutions are as well.
Tom: Bran Black, appreciate your time. Thank you.