Topics: Tax reform, productivity, Building Cooperative Workplaces Bill
E&OE
Tom Connell, Politics Now Host: Joining me now is Business Council of Australia Chief Executive Bran Black. Thank you for your time. You’re big business, to quote, versus small business, if you like, your overall, you know what you represent.
There’s been a lot of talk on small business. What about the effect broadly on the economy of the changes we’ve seen? Because there’s been a lot of changes, even to the Budget itself. Where we sit now, what do you make of it?
Bran Black, BCA Chief Executive: Well, I think it’s important just to give a little bit of context in terms of some of the things in the Budget that were good, because there’s been a lot of conversation about some of the things that weren’t so good, and I’ll come to that. But we had been advocating for a long time for a productivity package that included a focus on regulatory reduction, and we got that.
Now, there’s much more work that needs to be done in that space, and specifically, the Treasurer spoke to a $10 billion reduction in the value of red tape, or the cost burden of red tape, but we need to go further. We’ve said it should be at least $40 billion, so 25 per cent of the existing burden.
There was also good reform in terms of steps taken around payroll taxes and around migration settings and speeding up the processes for skilled migration visas and so on. Those are good reforms.
But where we’ve seen real challenge is, of course, with the tax package, and that’s where so much discussion has taken place, of course. What we’re concerned by there is that even on Treasury’s analysis, there isn’t economic growth, there isn’t any productivity growth to underpin that economic growth. We see 3 million Australians paying more rent, we see half of Australia’s adult population, 10 million Australians, subject to an increased compliance burden, and the fact that there is unlikely to be more investment coming off these reforms is shown through the fact that we’ve got 35,000 less homes. So, all things considered, this package, from our perspective, is counterproductive.
Tom: Right and the homes figure is in relation to just CGT and negative gearing.
Bran: That’s correct.
Tom: The Government says that, through other measures, the net is an improvement, so just clearing that up for our viewers.
Bran: Can I just make a point on that?
Tom: Sure.
Bran: That is entirely correct, but the measures that increase housing supply are the type of measures that we’ve been calling for for a long time, namely investment in connecting infrastructure, so electricity, water, other utilities, and so forth. That’s what genuinely delivers increased supply, and our argument has always been: don’t worry about the tax changes as much, because those are demand measures, focus on the supply measures.
Tom: Okay, so on the on the particular aspect, when you talk there of productivity, so one of the first things Labor did was, it’s called the Economic Roundtable, I think it was initially the Productivity Roundtable, it got rebranded, that was my memory.
Bran: Not uncommon in politics.
Tom: Yes, has that agenda been largely lost, as in a driving force being productivity, so you mentioned red tape, that they’ve gone a quarter of the way you’d like to do there.
Also, just, I mean, I’ve heard so many announcements on red tape, and it still seems to be the biggest issue as in maybe they get rid of that and they increase it there, you know what the net reduction is, but is that still the lost driving force productivity and that other things just seem to have come up as a priority for Labor.
Bran: We absolutely need to keep the pressure on all governments to continue to drive productivity as a major agenda. This country needs improved productivity. So at the moment our productivity, to use the figures, is 0.3 of a per cent over the course of the last 12 months. That’s against the long run average of 1.2 per cent.
What that’s done is mean that we don’t have the scope for the type of sustainable economic growth that has delivered real living standard increases for Australians for decades. So, for us, we’ve seen some steps taken that are positive, we’ve seen with these tax changes steps taken that are negative.
All things considered, we must continue to drive the productivity agenda, because we just haven’t done enough, and as things stand right now, there is no two ways around the fact that Australia is on the pathway to decline.
Tom: The Building Cooperative Workplaces Bill was passed. I know eyes might be glazing over. One element of this, so here’s what seems to be at play: if a company has done an EBA with a union, they can be favoured in terms of a Commonwealth contract, which can be worth a lot of money.
Have you sought clarification on why this is in there, how it will be used, will it be in construction? What do you know about this?
Bran: Well, the simple point is you’re right. The idea behind this Bill is that it removes an existing prohibition on the Commonwealth being able to discriminate for the purposes of grants and procurement opportunities, having regard to whether or not a company has a union-endorsed EBA, or whether or not they don’t.
Now, if that power were never going to be used our question to the Government will be very simple: why have the Bill, we do not need it? But clearly the mere fact that we have this Bill shows that the Government does intend at some point to use this power and if that is the case then that creates an enormous corruption risk.
Now this is not some theoretical proposition that we are putting forward, we have been reading in just the last 24 hours about the extraordinary corruption that we’re still seeing in Victoria as a consequence of the influence and impact of the CFMEU.
Tom: Is it construction? Are the other areas not really as likely to happen with corruption? Is construction the real red flag here?
Bran: So this Bill applies to all sectors.
Tom: I understand that, but in terms of the risk of it, is construction the main concern?
Bran: Well, what we would say is that this Bill facilitates the type of arrangements that have enabled corruption in the construction industry in Victoria, but it does that right across the board, because it simply puts the ultimate say so, yes-no for procurement opportunities in the hands of unions, and when you do that in any context, you’re giving somebody an awful lot of power.
Tom: Well, I do have to leave it there – tight timeframe. Bran Black, thanks for your time. Talk next time.
Bran: Thanks for having me.