Chief Executive Bran Black doorstop at Parliament House, Canberra

E&OE

Bran Black, Chief Executive: Thank you for coming down this morning. We’re delighted to have the opportunity to launch our report, Building Australia’s Tomorrow. Thirty-seven recommendations from the Business Council of Australia with respect to how we can go about making the most of our infrastructure delivery moving forward in the future.

What we’re saying is that by virtue of the stresses on state budgets, population needs, and also the importance of locking in productivity gains, we got to have a well-planned and consistent approach to infrastructure delivery.

And there are two critical reasons that I just want to touch on briefly in that regard: firstly, locking in the productivity gains, and secondly, how we can go about avoiding the pitfalls of ‘boom–bust’ cycles.

In terms of productivity, good infrastructure investment makes sense. Back in 2014, Deloitte made a study with respect to the New South Wales delivery of infrastructure. What they found was that a $20 billion investment was delivering a $30 billion a year uplift in Gross State Product, and that meant that in the period between that study and 2035, the cumulative benefit to the state of New South Wales was $300 billion.

That sort of study has been reported and furthered in terms of its applicability with respect to subsequent studies by the OECD, picked up by the Reserve Bank of Australia, which have found that for $1 billion of well planned, consistent infrastructure investment, the uplift to GDP is about $1.3 billion.

In terms of that point that I made about the ‘boom-bust’ cycles, what we see at the moment is that our infrastructure delivery in Australia is coming off a boom of about 2.2 per cent of GDP, it’s heading down towards about 1.5 per cent. We’ve seen in the past that those busts have come through at about 1.1 per cent of GDP.

The Business Council is not saying that we need to consistently ensure that our infrastructure delivery is at those heights of 2.2 per cent, but we are saying that if you have a consistent approach, whatever that figure might be, then you avoid the pitfalls. And the pitfalls are pretty clear: you lose skills, people move out of industries, they go overseas, and when it comes time again to reinvest, you’ve got to reacquire those skills. They cost more, it takes time, and ultimately, that slows down the delivery of infrastructure.

So, if we can harness the productivity gains, we can avoid the pitfalls of ‘boom-bust’ cycles, then we can deliver the infrastructure that our growing economy and our growing population need.

We’re making some key recommendations in that regard. They cover three key areas: how we go about making sure infrastructure delivery is well planned, how we go about making sure it’s productive, and how we go about making sure it’s innovative.

And critically, some of those recommendations include, first and foremost, continuing to back the important role played by agencies like Infrastructure Australia, what we can do to support the role of the private sector through asset recycling and arrangements that see joint co-investment with public-private partnerships.

Beyond that, we think it’s critical that we tackle planning reform through the EPBC process. Obviously, that is such a key focus for us here in Canberra today, but it’s focused because it matters. It’s been described as the single greatest impediment to the green energy transition. But it’s not just the green energy transition, it’s projects, major projects right across our economy that require EPBC reform right now.

We also say it’s critical that we take a more productive approach to industrial relations in the construction sector. Productivity in the construction sector has gone backwards by 10 points in the last 10 years. Across the rest of the economy, it’s gone forwards by about 10 points over the last 10 years. What we’re saying is that a big part of that is the role of unions like the CFMEU.

We have to have a Royal Commission in relation to the CFMEU. We have to re-establish a building code. We have to put in place a body like the ABCC or similar. If we can take these types of steps, then we can harness the productive potential of infrastructure right across our economy and, in that, help secure the future for our growing population. Very happy to take questions.

Journalist: What are the main issues? Do you have any concern with the draft Bill that the Government circulated on EPBC?

Bran: We do have concerns. But I will say right from the outset that we’ve been extremely pleased with the very consultative and very engaging approach that Minister Watt has taken in terms of the progression of the reforms so far, but in terms of what we’ve seen so far, in terms of drafting, we do have concerns.

Those concerns relate to matters like the definition of ‘unacceptable impacts’, ‘net gain’, the powers of the CEO of the EPA with respect to stop work orders, the circumstances in which disclosures, with respect to emissions, are relevant to assessments. And of course, the fundamental point for us is how we can go about ensuring that at the end of the day, there is a more streamlined, faster and more certain approach to assessments of applications. That’s what business is looking for.

Journalist: Mr Black, you outlined a range of concerns there. What I’d like to know is, does the BCA support the Coalition’s request to Minister Watt to split the Bill and to pass one tranche of legislation that deals specifically and only with approvals, because that would leave the environmental element in the form with extra controls, potentially on projects on the environment side of the bill. Would you support that move? And if not, what are your concerns?

Bran: Firstly, I’d like to say that we welcome the fact that the Coalition is very strongly focused on trying to make sure that we deliver outcomes here that generate that certainty that I just mentioned, that business is looking for. That’s absolutely key, and we’re pleased that’s the Coalition focus.

What we’ve always favoured, and what we continue to strongly favour, is a single holistic approach to looking at these reforms, because what we want to see is scope to look at all the different considerations that need to come into play, all the different arguments and all the different policy levers that can and need to be pulled, both in terms of supporting the interests of business, but also supporting the interests of the environment.

At the end of the day, our view is that we need to deliver an outcome that has longevity, and that means getting the balance right. To get that balance right, everything needs to be on the table.

Journalist: Do you want Sussan Ley to remove her demand to split the Bill?

Bran: As I say, for us, we favour having everything on the table at the same time, and we think that that approach assures us the best basis for getting the right balanced outcome that ultimately secures benefits for the environment and for business.

Journalist: Does it worry you that the Coalition is too obstinate, and then Labor is put in a position where they feel they have to negotiate with the Greens to get a deal done?

Bran: We are very firmly of the view that there is a window open now for reform. It is a window that people have been calling to have opened for a long time, and it’s because the system, as it stands, doesn’t deliver for the environment, and it certainly doesn’t deliver for business.

From an environmental perspective, the sluggishness of the process within the EPBC is being used as a proxy for environmental protection. We’ve always thought the better approach is to have clear environmental protections in the legislation in the same way that we say it’s important to have clear business outcomes in the legislation as well.

But to get that balance right, we need the parties of government to come together and pass this legislation. That is the way that we can go about delivering the longevity that these reforms require.

Journalist: Those areas that you went through before that you have concerns on. I mean, in the grand scheme of the Bill, if there’s sort of not kind of structural issues around the EPA, we haven’t seen that yet, those sorts of things. Do you feel that there is room to move to compromise on those positions, on those elements?

Bran: I believe there is absolutely scope for us to get this job done. And I think there is scope for business groups, for environmental groups, for the Opposition and for Government to come together and find a way through these issues.

Now, the issues that I mentioned before are not the only concerns that we have with the draft Bill that we’ve seen so far. And of course, we haven’t seen all of the drafting yet, but we are confident that there is a way through these issues that affords business outcomes and generates good outcomes for the environment as well.

We genuinely look forward to sitting down, even more, because we’re already doing this a lot. We want to be sitting down with stakeholders, with Government, with the Opposition, to find this way through. Now is the time to get this done, we want to get it done. But this is important, we want to get it done right.

Journalist: Back to the split bill versus the one bill issue. Graeme Samuel has said that it is important to have both sides (inaudible) for the environmental and the business concerns. From your point of view, from the BCA point of view, why is it important to have both those considerations passed in one holistic, streamlined, one big Bill.

Bran: That goes directly to the point about longevity. I think if you get a Bill that is unbalanced, if it is too much in favour of business interests or too much in favour of environmental interests, then that just leads to more scope for changes to be made in the future. And because of that, that undermines what business, frankly, is most looking for, and that is certainty.

We want certainty and confidence in the settings. Now, that means that we can, we think, use the framework that has already been put forward, and Graeme Samuel’s recommendations were excellent in this regard. In establishing a framework, you can use those recommendations and the framework that we’ve seen so far in the drafts as a basis for the discussions that are going to be required in order to finish the job. But I do stress from a business perspective, we have concerns with respect to some aspects of the draft at this point, and we want to see those concerns addressed.

Journalist: What’s your message to Liberal and Nationals MPs who are pushing for David Littleproud and Sussan Ley to drop net zero?

Bran: We’re very much committed to net zero, we have been for some time. We have recently assisted, we hope, the Government in the context of putting forward its own position on what our new target for 2035 should be, 62 to 70 per cent. And from our perspective, there is a pathway to deliver that, and we consider that that pathway will be a difficult pathway to tread, but there is a pathway nonetheless.

Our message, fundamentally, in terms of the transition to net zero, is very clear: we’re looking for certainty. Certainty gives business the confidence that it needs to invest, knowing what the settings are, knowing what the supports will be, knowing where government will pull levers and where it won’t that’s ultimately what matters most to business.

Journalist: Just on these reforms, it sounds like that the Liberal Party and business taking a different approach on the best way forward. Is that surprising to you, in terms of, whether you split it into two or keep it as one. Is that surprising that business and Liberal Party appear to be on a different page?

Bran: I’ll leave it to others to comment on the politics. From our perspective, we’re just very clear on what the position is that we think will ultimately deliver the best outcomes, and that’s by having everything on the table at the same time.

Journalist: Mr Black, in the past term of government, the Dutton Opposition ignored the BCA and MCA’s desire for the Liberal Party, at least, to work with Labor to pass Plibersek’s reforms that were similar but not the same as these ones on the table now.

Have you spoken to Angie Bell or Sussan Ley recently about the BCA’s desire to pass one contiguous Bill through with the Coalition?

Bran: It’s a good question, because I think it’s important to draw a distinction between the reforms that were on the table last year and the reforms that we’re looking at now.

The reforms that we were looking at last year related very clearly to the establishment of the EPA, but also some conditions with respect to the Environment Information Australia agency. Now there’s a lot more to the reforms than those areas. Of course, there’s the streamlined assessment processes for businesses, which are so important, the offsetting arrangements, national environmental standards, and much, much more.

Our perspective has always been that you have to have all these things on the table together. We have had conversations with the Government, we have had conversations with the Opposition, and we’ve been consistent in our approach, in our consistent call for that singular assessment of everything on the table at the one time.

Journalist: Are you going to meet with them while you’re here in Canberra today, this week?

Bran: We’ll be looking to meet with the Government and with the Opposition over the course of the next few days, but I do stress we don’t expect that this process will be resolved in a matter of days. We want to take the reasonable time to get it right, because these are challenging, difficult issues, and there are still quite a few concerns that need to be worked through.

We have a perspective, so do the environmental groups. We need to find a way of making sure that both sets of perspectives can be appropriately accounted for. We think there’s a way to do it. We’re looking forward to working together.

Journalist: Do you want it done by the end of the year?

Bran: Again, it’s another good question. When the Government spoke about these reforms some months ago and the timing associated with them, there was discussion about bringing the reforms forward so that they were completed by the middle of next year.

Now, at that time, I thought to myself, that seems ambitious, but I reckon it’s a pretty achievable approach, and we should absolutely make sure that that is the book end with respect to the timing associated with these reforms.

I will take a similar view now, and that is to say, it would be ideal if we could knock it over by the end of the year, that would be terrific, but we should take the time to get it right, and that means working through the issues and the key concerns that we’ve got that I’ve talked about today.

Journalist: Just on net zero again, would it worry you if the Coalition did take a position against net zero? Would that be bad for business certainty?

Bran: Well, we’ve always said the most important thing is to have consistent settings that deliver business certainty. Now, as things stand, we’ve got a number of different mechanisms that are in place, for instance, capacity investments in the safeguard mechanism, vehicle efficiency standards and so forth.

We’ve also got the new commitment in terms of the 2035 target, and there is, right now the process of putting more flesh on the bones with respect to Minister Bowen’s net zero planning. All of that is important because cumulatively, it gives business a greater understanding as to what the role of Government is going to be and what the role of business is going to be on this critical pathway through to net zero. And it gives us a basis of saying to Government, well, this is the objective, this is the type of support that we will need in order to help us deliver on it.