Joint doorstop with BCA, ACCI, AI Group and COSBOA at Parliament House, Canberra

E&OE

Bran Black, BCA Chief Executive: Can I say Australia is at an important point in its history. We need to make sure that we’re not the first generation that leaves a poorer quality of life to our kids and to their kids. We know that the way in which we can make a difference and make sure that we leave a brighter future for our children is by increasing productivity and by improving living standards, that’s what for us this roundtable is all about.

We’re four people here today, but we’re also backed by, supported by and representing the views of 29 different industry associations covering everything from farmers to pharmacists to bankers, through to home builders and the mining sector as well, and everything else in between. And collectively, we’ve put forward a joint submission in terms of what we think the country needs in order to deliver the best outcomes for Australia moving into our future. And we’re very clear that the test for this roundtable comes back to that critical point about driving productivity, and we drive productivity through business investment. So if we want to lift living standards, we have to lift business investment.

So the test for everything this week, every proposal that’s put forward is very simple, will it increase business investment, or will it reduce business investment. To that end, the 29 business groups that we’re working with have put forward a joint submission that covers off a series of key ideas that we think are important to take forward, and we can of course, go into more detail if you wish, but broadly they cover innovation, so that’s R&D and making sure that we get the settings right, with respect to artificial intelligence. We talk about planning, making sure that we can deliver the homes that Australians need, but also the planning system at a federal level that facilitates new and improved major infrastructure. We talk about better regulation and moving towards a key objective of having a 25 per cent reduction in the cost of regulation in Australia by 2030, and we also talk about tax reform.

That’s what we do as a group, but it’s also important to remember that there are other issues that need to be on the table, savings, industrial relations, and, of course, how we can go about attending to the skills needs that Australia has. It comes back to that critical point, if we’re serious about driving productivity, if we’re serious about lifting living standards, then we have to increase business investment, and that is the test for everything going into this roundtable.

Innes Willox, AI Group Chief Executive: This is a legacy moment for Australia, for our economy, for business, for workers and for the community. We have a real chance here to get things right, to set us up for the future, a future which is better for all of us at a time of massive change across the economy.

We’re seeing huge changes occur around technology, around our move towards a net zero economy and our complete decarbonisation of the economy that we need at the moment, all of these things are making change imperative. What got us to this point and what brought success to our economy in the past is no guarantee of doing so in the future.

The message very clearly from Australian businesses at this roundtable will be that we have become a costly, complex and cumbersome economy in which to operate. We’re too slow, we’re not nimble enough, we’re too expensive, and businesses are finding it harder and harder to invest in, and for Australia. We need to change that. We need to focus on stripping out complexity. We need to focus more on outcomes rather than processes. We need certainty for business going forward, and we need to think about how our money is spent, not just how much money is spent. They’re crucial changes that we will have to make in the years ahead to make us a more productive, a more prosperous and a more fair economy for all.

That’s the objective we want here, what we do not want to see are more taxes, more charges, more regulation, none of that, and some of what’s been proposed by others going into this roundtable will do all of that, but impose more cost, more regulation, more burdens on Australian businesses, large and small, that’s not the way that we get a more productive economy.

The Government deserves a lot of credit for pulling this roundtable together, because through that, they recognise that we do have a problem, and we need to fix the problem. They understand that we are facing declining living standards and declining opportunities for all Australians. But what we want out of this are outcomes where we will create an environment where there can be more business investment, more opportunities for business to invest in Australia and Australians.

What we have seen in recent years is a shift in our economy, a shift from encouraging private sector investment to more public sector spend. You now see 80 per cent of the jobs in the Australian economy right now are being created, either in the public service or through public and government spending. We need to reverse that. Our trend has always been in the reverse. We need to get our private sector energised and enthused again. We need to make them want to invest in Australia and be able to invest in Australia to create opportunities.

We can’t have more taxes, we can’t have more regulation, we can’t tax our way to prosperity, nor can we regulate our way to prosperity. So we hope through this roundtable that there will be the opportunity to put forward some positive ideas around how to generate the growth and investment that we need, and that over time, the Government and the political process will pick those ideas up and run with them to make Australia a better place for all of us. That’s our ambition here, it’s a great opportunity, and we need to grab it with both hands.

Andrew McKellar, ACCI CEO: Today, we will hear the Chair of the Productivity Commission say that the economy is struggling with red tape that is like ‘hairballs stuck in their throat, choking the Australian economy down’ and the time has come to cough up some of those hairballs and I think if we can do that over the next three days, then we will all feel a lot better.

So, there’s a real opportunity in front of us, certainly from a business point of view, we will come to the discussions at the roundtable over the next three days with a positive spirit. We want to contribute to ideas that will help get the Australian economy moving, that will promote stronger living standards for the future. We know what the challenge is in terms of Australia’s productivity performance. If we can address those top priorities, if we can reduce the level of red tape strangling the Australian economy, if we can promote the uptake of emerging technologies, stronger innovation, if we can get business investment going, then in the end, the Australian economy will benefit. We’ll have better outcomes for business, we’ll have better outcomes for workers, we’ll have stronger living standards in the future. So, we look forward to the next three days, we’re going to make a big contribution, and certainly we want to see a successful outcome.

Matthew Addison, COSBOA Chair: We welcome, on behalf of small business, the opportunity to be a voice in this Economic Reform Roundtable. Let’s talk about productivity, let’s talk about the growth of Australia. When we talk about Australia, we’re talking about all individuals. We’re talking about the individuals who are self-employed, one and a half million of them. It’s their business, it’s just them. How do we give them a better environment to operate in? We talk about the 800,000 small employers. How do we encourage them to grow, to innovate, to invest back in their business?

We’re looking for that deregulation. Could Government take a new approach to re-regulate for the next generation. Let’s look forward to 2035, and say, ‘How do we regulate for growth’, rather than do what we’ve done in the past, which is play a game of Whack-A-Mole with risk. ‘A risk pops up, let’s create another compliance report, let’s create more complexity, let’s make it harder for business.’ Let’s stop doing that. Let’s regulate for a positive environment going forward. A new approach to doing business in Australia, so that we are attractive to overseas. Small business needs big business to grow, they need to be innovative. Small Business supplies to be big, big supplies to us as well. Let’s have a better Australia going forward.

Journalist: When we’re talking about red tape, if you be a little more specific and rattle off very quickly and concisely just a couple of regulations that you could be cut very quickly?

Bran: So, the key thing that we would say, if we need to move on something that’s going to make a huge impact, it’s the EPBC reform at a federal level to help get major projects moving forward. But there are so many other different things that we can work towards as well.

There’s harmonisation across the Commonwealth, certainly in terms of workers’ compensation arrangements, long service leave, even occupational licensing. We could look at areas like how we can go about making sure that people who are tradies on one side of a border don’t need a special permit to be on another side of a border, or why is it that you need 36 different licences in order to pour a cup of coffee in Victoria instead of, say, the 20 that you have in the Northern Territory. There are lots of different examples, but they all point to one thing: there is too much regulation in Australia, and we need to cut it down.

Journalist: What do you think of the union’s submission to the Fair Work Commission that employers, if they want to bring staff back from working from home they should give them six months’ notice?

Bran: The simple point that we will make is that employers need the opportunity to engage flexibly with their workforce. We don’t need this top-down restriction from government. We should allow businesses to engage with their workforce to support an understanding within each business as to what works best for them.

Innes: What you’re seeing is dramatic overreach here from aspects of the union movement. You’ve had in the last few days, some call for a four-day working week with a 20 per cent pay increase. You now hear another union say employers aren’t able to do anything about getting their workforce to where they want it to be without six months’ notice.

This is the first and best way that you can go about strangling a business in Australia. This is the complete opposite of what we need. This comes about as the Australian Services Union and the Australian Industry Group are engaged in discussions at the Fair Work Commission around the future of working from home. This is again, from them, complete overreach. It’s the antithesis of productivity, it’s the antithesis of growth, and it is the exact opposite of what actually working Australians need.

What we’re seeing from working from home is that Australians want the flexibility to work from home, but also to have the flexibility to go into the office. Employers, at the same time, are saying more and more, ‘yes, hybrid work is here to stay, but let’s work it out together at the workplace.’ The key point here is we need to be able to continue to work this out together without overreach from unions, who quite often represent less than single digits of their workforce, they claim to.

Journalist: If six months is too long, could you provide an example of what would be ideal?

Andrew: It’s not a serious contribution by the ACTU. It is really, once again, trying to tie the Australian economy in knots. The purpose of this roundtable over the next three days is to talk about ways to encourage and to boost productivity in Australia. If you don’t have a plan for productivity, then you don’t have a plan for real wages, and that’s the truth that the ACTU has got to confront.

So, you know, we want to see them at the table, we want them to bring some positive ideas, but if they’re going to come with proposals that say that you can’t have changes to work from home arrangements without six months’ notice, I mean, that is ridiculous. It should be flexible, it should be something that is directly discussed between the employer and their employees, that’s worked out at the enterprise level. That’s common sense, that’s the way it’s got to work. And if the union movement is going to come with other proposals, then frankly, I would be very concerned about the input that they’re going to have to these discussions.

Journalist: What’s your response to Danielle Wood’s call to replace various costly and inefficient state and Federal Government clean energy incentives, like EV car tax breaks, with a single national carbon price?

Andrew: I think we have to have a more efficient system. At the moment, what we see is there’s a plethora of different mechanisms, policies, instruments, federal and state. Some of those have an implicit carbon price or cost that comes with them, and in many cases, those costs are very high.

I don’t think we’re going to go back to the approach that has been tried in the past, but we do have to simplify, and I think over the next couple of days, we’ve got to look at how we make the energy transition a success, how we end up with affordable, secure and sustainable approaches to energy. We have to go with the least cost solutions to the economy. We can’t have the complexity and the layers of regulation that we have currently.

Matthew: Small Business, look for the complexity level to decrease. What we have in the Australian tax system is a lot of compliance requirement, a lot of red tape, a lot of forms to fill in, be that at state level, local or federal. If we can get into a better environment where we streamline compliance, maybe it’s a program of tell government once, and then government works out who is allowed to know what, when. Simple, streamlined ability to be in business would be a step forward.

Innes: Can I just add, if you’re a business operating nationally in Australia at the moment, you are paying well over 100 different taxes, charges and levies right across federal and state jurisdictions. That is just not workable in an economy which is seeking to be productive, streamlined and simplified.

One of the key hopes for this roundtable is that we’re able to initiate and then continue conversations with the Government around how we do simplify and streamline our tax system. Corporate tax is only about 60 per cent of what businesses pay in terms of their taxation give to governments. There’s about 20 per cent to payroll tax and about 20 per cent to just a whole range of minor, annoying, nagging taxes that are often duplicative, that really can be streamlined.

If you’re operating nationally, you are paying eight different payroll taxes across the country. That’s just not sustainable. So one of the major outcomes we hope for from this roundtable is the start of conversations involving the federal and state governments around how they can streamline and simplify, and codify the tax system for all Australian businesses, but also for all Australians who are bogged down with a very complex income tax payment scheme.

Journalist: There’s more than 900 submissions. Do you hope that bringing together 30 in this joint statement is going to add a bit more weight? And are you worried that voices and ideas are going to be lost at this roundtable?

Bran: Well, what we’ve tried to do in bringing together these organisations is make sure that we can speak with clarity and consistency on a range of issues that we consider to be most important in driving that critical outcome associated with driving business investment upwards. I go back to that point. Business investment going north means that living standards also improve. That is the outcome that we are trying to achieve for Australia, because that’s how we lock in quality of life for our kids and their kids as well.

Now, I mentioned before, just in terms of regulation, and that’s obviously a big focus point for all of these almost 30 groups. One thing that I do want to stress is the need for consistency, and my colleagues have made this point before, but if you take that point in terms of payroll tax that’s just been made, there are about 30 different categories of payment across our Commonwealth, in each of the jurisdictions that need to be accounted for by a national payroll tax paying organisation, and yet there are only about 10 that are consistent across each and every state. That is an example of just how difficult it is for any business to engage at a national level and the costs associated with compliance that that necessarily incurs.

Now, one thing that I think the Government’s done really usefully is establish the National Productivity Fund last year, that’s modelled on the payments that were made in the 1990s in terms of competition payments, it was about a $5 billion investment then, it’s yielded about $60 billion each and every year to our GDP. That fund, the National Productivity Fund, is designed to mirror that approach from the 1990s and the early 2000s if we can utilise that more in terms of regulation, in terms of housing, in terms of consistency and harmonisation more broadly, then that’s going to benefit the business groups that we represent, but in turn, all of the different sectors that they represent, which ultimately account for the length and breadth of Australia’s economy.

Journalist: Mr Addison, can I ask for clarity on COSBOA’s view on the cash flow tax proposal? I mean, small businesses, if you’re getting a reduction in the headline rate of 20 per cent and then the 5 per cent net cash flow tax, surely a lot of your members would be better off?

Matthew: So COSBOA, for a long time, has advocated for the cut in the small business corporate tax rate down to 20 per cent, that was a pre-election policy. We didn’t see the cash flow tax coming in the form that it has been put to us. We think there are existing mechanisms in the Australian tax system to achieve the outcome of increasing investment. That’s what it was about.

We have the Instant Asset Write-Off, that mechanism is there. For some reason, it is not permanent, I do not fathom why. So let’s make the Instant Asset Write-Off permanent, let’s increase that threshold. Our policy position has been $150,000, interestingly overseas, it’s now unlimited for a permanent Instant Asset Write-Off that creates investment in improvements inside business.

Journalist: But back to the cash flow tax proposal?

Matthew: We’re not a fan. We see that adds another tax regime on top of our existing tax regimes. We have income tax and its definitions, the cash flow tax will add another range of definitions and understanding, all on top of GST and payroll tax and PAYG and others.