Tim Reed interview with Elysse Morgan, ABC The Business

Event: Tim Reed interview with Elysse Morgan, ABC The Business  

Speaker: Tim Reed, Business Council President; Elysse Morgan, host 

Date: 13 February 2020

Elysse Morgan, host: Tim Reed, you're new to the role of Business Council president. What do you hope the Business Council achieves, particularly on climate policy given that is the hottest topic that we have?

Tim Reed, Business Council president: Yeah, thank you Elysse and thanks for having me on the show, I'm delighted to be here. The Business Council plays a really important role in our community because it is the body through which large businesses come together and on behalf of those businesses we are able to interact with the government, interact with other stakeholders etc. Climate policy is a very important policy for our nation. It's been something that we've struggled with over the last decade and it is something that business has to be a part of. Business has to be at the table if we're going to deliver the outcomes that we want to. And from our perspective, those outcomes are really centred on the science and the science that says by 2050 we need to be in a net-zero position, in terms of emissions. And so what I hope we'll be able to with the Business Council is really be a part of constructive process for our nation to build a tangible, credible plan that gets us there. A plan that delivers on those emissions goals but also delivers on reliability and has affordability of electricity. A plan that makes sure that we continue to invest in our regions and that we have thriving economic centres in our regions and a plan that gets us there as economically efficiently as we possibly can.

Elysse: And to be clear, you support the need for a market based carbon price?

Tim: We believe that the most efficient way to get there is a market based pricing mechanism. What happens when you put that in place is then innovation can thrive because you put in place the parameters, investment can be made with certainty. There'll be solutions that we don't even know about today that will contribute to it. If we put a market framework like that in place and yes, a market based pricing mechanism we think is the best one, then we think we'll get there as efficiently as can possibly be achieved. The reality is though in this nation over the last decade we've had multiple attempts at different forms of those.

Elysse: Yeah, because we had one in 2014. Can you understand why some people would think that the Business Council isn't genuine in what you're saying here in regards to committing to a net-zero emissions by 2050 by saying that, and it's written on your website that you support a market base carbon price.

Tim: Why would people read that and think we weren't genuine?

Elysse: Because in 2014 in an oped your CEO, Jennifer Westacott, encouraged the government to appeal the carbon tax saying that it put economy at risk. In the lead up to the last election, the Business Council called Labor's 45% emissions reduction by 2030, an economy wrecking target. That was in a tweet and that was part of its campaign. But now you support zero emissions by 2050. They all seem fairly incompatible.

Tim: Yeah, so let's go right back in time. If you go right back to John Howard's Emission Trading Scheme, we were constructive partners and supporters of that. If you move forward from there to Kevin Rudd with The Carbon Pollution Reduction Scheme, again we were at the table as constructive partners. There is a difference between a fixed tax that is set at a level that is out of range with the rest of the world and a market based pricing mechanism. We were constructive partners in trying to design the carbon tax in 2014. It was when the price moved to a level that was well above where international standards were and when it was a fixed price as opposed to a market based mechanism where we said, "actually all we're going to be doing is exporting Australian jobs and we don't think we should put in place a scheme that will lose jobs from Australia and lose those jobs overseas at the expense of the local community." But we have continued to work since then in saying, "what we do want to find are mechanisms that allow Australia to live up to its obligations" and we've been strong proponents of Australia being a constructive part of global frameworks including hitting its obligations under the Paris Accord. The 45% that you mentioned there, really that was a comment that was made in a moment in time about the short term target that was very high with no plan to get there. We don't think the targets per se are economy wrecking, but we think that you need to have credible plans as to how you're going to achieve those targets.

Elysse: What's the difference between the Business Council now saying that you support net-zero emissions by 2050 and a target that was stated two years ago by saying: a 45% emissions reduction by 2030, which if were to get to zero by 2050 you would need to be around the 40% cut by 2030 anyway, won't we?

Tim: I don't think you do, but what we're saying is-

Elysse: There's plenty of science and evidence to say that you do, that you need to be on that path.

Tim: Actually there's plenty of science to say that if we hit 26% to 28% we'll be well on the path to getting net-zero at 2050 and I think that's the thing that's Zali Stegall's proposed bill put out there this week, which we were also very supportive of. Let's take account of the science and the technology and what's achievable and set five year goals to move out and come back and have an independent body continue to review those such that we can make sure that we're on a trajectory to get to 2050. But to answer your question very specifically, the differences, 2030 and 2050, and when you're talking about planning for the nation's electricity system, you're talking about the large longterm investments and that's why we continue to say, "what we have to build is a credible plan, a plan that puts in place the mechanisms that allows the investment that is needed", a plan that has the achievable targets through that time so that we can have a reliable electricity system, we can have affordable electricity, that we can continue to be a nation that prospers and grows, that we can continue to support other nations in their aspirations to become low carbon economies. And if we put that plan in place, we absolutely believe 2050 net-zero can be done. We think it needs to be done. We think it's an important thing for the community. We think it's an important thing for the world and we're here wanting to be a constructive path of Australia achieving those goals and aspirations.

Elysse: The government hasn't said whether it will support legislating net-zero by 2050 but it's been very clear that it will not have any kind of carbon price under this government. You've met Scott Morrison, you've been to Canberra, have you spoken specifically about these issues with him?

Tim: The BCA continually works with the government of the day and the opposition on their policies in these areas, so those are ongoing conversations that are continuing to be had.

Elysse: What's the feedback? Because as you said at the beginning of this interview, the Business Council and big business is key to setting policy, to setting the direction for Australia. You are key to the economy.

Tim: We are.

Elysse: What is their response? What is the response from the government to you?

Tim: The government has been very clear and publicly stated that they're not going to have a pricing mechanism. That there's not going to be a new acronym for a program put in place. In November, we announced that we were going to be reviewing our policies in this area and while we believe the most efficient way would be to have a market based pricing mechanism, we don't think that's the only path to get there and we want to be a constructive part of the progress that our nation makes. And so we're going back and we're reforming what might be ultimate ways to get there if we can't get that pricing mechanism in place.

Elysse: How do you feel about that? Are you disappointed that you don't seem to have enough of a voice or you don't seem to be listened to?

Tim: Business should be a part of the conversation, but I've never thought business should be the only voice that is taken into account and the Australian electorate had rejected multiple governments, multiple schemes over the last decade. There have been, what, five or six leaders of both political parties for whom this is being the end of their career.

Elysse: To be fair, that was their parties dethroning them most of the time rather than the voters having a say.

Tim: Some of the time but I think there were campaigns against the carbon tax that were very effective. There were campaigns back, if you look at the Rudd-Howard campaign, this was absolutely prominent I think in that change of government. It is the politicians, but at the end of the day it doesn't matter. Right? That's where we are as a liberal democracy. That's the way in which we were. What we believe in business is we'll go get there anyway. We cannot continue to emit carbon at the rate we do. We need to have a credible plan that means that we become a low carbon economy. That means that we have reliable electricity, affordable electricity, that we continue to create jobs, that we create new investment in our regions and we just have to find a path through. That's why the BCA are doing a review and that is the role that we really want to play.

Elysse: The Business Council is a diverse membership group. You have some companies that are very clear on agreeing with net-zero and supporting the price on carbon and you have members who are certainly not in favour of either of those things. How are you finding a middle ground here and how strong do you think your policy at the end of this will be, given that you have those two competing sides?

Tim: Look, we have representatives of the Australian economy, right? I think we have the nation's largest electricity consumer. We have all of the major retail and distribution companies. We have the major generators, they're all at the table but that's the case in anything. We have airports and airlines who will often have differences of opinions over things etc. And one of the great things about the BCA is that we're able to come together and bring all of those perspectives because any solution that our nation has, has to work for all of those players. I don't think that weakens our policy. I actually think it strengthens it into something that is achievable.

Elysse: I want to move on to big business role in the rebuild and the recovery post the natural disasters that we've just had. You've got a business rebuild program and you're putting new demountables into a small town in New South Wales so at least their shops can reopen. Big business has put a lot of money into this, hasn't it?

Tim: Big business have been contributing in lots of ways to the disasters that we've had and let me start by just saying firstly that we recognise the amount of trauma that this has created for those local communities, the individuals that are involved, volunteers etc and business is part of the community. We can't separate business being out there and people being over here. All business is a collection of people trying to work together and achieving. Our members very much feel the pain and the angst these local communities have been feeling. We've acted in multiple ways. Number one, our businesses have been providing paid leave to all volunteers. And that's been really important for the volunteers who are out there on the front line. Number two, we've been trying to make sure that businesses don't call in debts that might be due from small businesses that are in these impacted regions who won't be having revenue come in and also that we paid those bills faster so that businesses that are there that are owed money are getting cashflow coming in. We've been encouraging all of our members to make sure as they're planning the year ahead, that they look at holding events in the Adelaide Hills, in the Blue Mountains, on the South coast of New South Wales, etc. Because what's going to happen in five months time, six months time is everyone else will get back to work and those economies will still be struggling to restart and we think big business will have a role to play there. But we have also been doing very specific things, like Mogo that you referred to, one of our members has donated for the next two years demountables so that they can have a pop up mall there while permanent premises are rebuilt in that town. What we're really trying to achieve through BizRebuild is to make sure that these local economies regrow and regrow stronger than they ever were. We had the government and opposition, in fact, it went through both houses of parliament without a single vote against it, we've created a charitable trust that can collect money that can be distributed to small businesses because none of the relief agencies are able to provide any assistance to business. It's illegal in this country for a charity to provide assistance to business and so we have been able to successfully set up the trust just for that. We've been doing a lot, but I think we should be, as well.

Elysse: On that, natural disasters are expected to continue to increase in ferocity and in frequency. Can big business continue to mobilise to put it's hand in it's pocket to respond to these? Yes, big businesses always said, "We've got a role to play. We must be involved in this. We've got to give back." But surely there's a limit to this and surely you're seeking a more coordinated plan from the governments on this.

Tim:I think we're all learning and we're all improving in this dimension. But big business, business is just a part of the community. If the community suffers then the business suffers as well. And so I think big business will continue to play a part in disaster relief going forward because we need to. When you look at what happens in these local communities, it is your local Bunnings, it is your Coles, your Woollies, etc, who have to respond because they're there on the ground and they're part of the critical supply chains for those local communities. It is the fact that the electricity companies continue to provide power but aren't charging for it. It's the fact that the telcos do likewise, the software companies are doing it and I'm very confident that we'll be able to continue to do that because if we don't rebuild these communities, then our businesses suffer as well.

Elysse: Tim Reed, thank you so much for your time.

Tim: My pleasure.