This opinion article by Business Council chief executive Jennifer Westacott was first published in The Australian Financial Review on Monday 15 August 2022
The Jobs and Skills Summit is an important opportunity to find common ground. I believe we can. It must start by agreeing on the kind of society and country we want to be and the structures and policies to get there.
The destination must be one where Australians have more secure, safer and better jobs with higher wages and better living standards because organisations are more successful. A country where people can obtain the skills they need throughout their lives, they have greater opportunities and access to world class services.
A middle power country that leads the global shift to decarbonisation and has industries at the cutting edge of technology creating new value – in other words, a nation at the frontier.
This will require a more resilient economy that can compete and prosper at a global scale.
The choice is ours. We can either be a country frozen in time, overtaken by our rivals, or a nation at the frontier accessing the opportunities of technology and wealth creation.
The world we live in is volatile, complex and increasingly technology driven so there are three priorities at the summit where we need to find common ground.
The first area is finding consensus on how we diversify and strengthen our economic base – which is what we do and produce – so that we can grow.
The second is how we become more productive so we can compete, drive our existing strengths and acquire new ones to make sure we can share the benefits of growth.
And the third is how we become more flexible so we can quickly respond to external pressures and the changing nature of how people want to work, live and consume. This will mean not putting endless barriers in the way of our ability to adjust so we can take advantage of new opportunities and manage the change around us.
So, let’s take diversification first.
Our economic base is too narrow. We need to reorientate Australia’s circumstances where we rely on the fortunes of too few industries and too few markets to an economy that is at the cutting edge of technology, value creation and industries of global scale.
We need to be at the forefront of driving the future of how we do and produce things and provide services to meet the changing demands of consumers.
When you talk to Australians, they understand this.
Now, let’s turn to productivity. We need to find some common ground and some common language.
Economists describe it in terms of output per unit of input. I never think of people as inputs, I think of them as talent.
Outputs and inputs are hardly going to win hearts and minds or convince Australians of the critical necessity for the country to produce more, create new industries and secure further lucrative overseas markets.
Productivity is about creating more value by doing things differently, by using technology, putting improved systems in place and doing processes in new ways. It’s driven by innovation, investment and invention.
It’s about better training and skilling people, greater collaboration, people working together to solve problems, and bringing out the best in people.
It’s about getting better equipment and developing new products.
All of this creates new value because it increases our capacity to produce more, to do more, export more and get into new overseas markets where people are willing to pay more for higher value, Australian products and services.
Importantly, improving productivity benefits Australians in real and tangible ways.
Lifting productivity creates safer, more rewarding, higher value, more meaningful and more satisfying jobs. People get to use their talent and creativity. It also means organisations are successful because they can do more, expanding into new markets.
Australian mining is a great example. Our industry is one of the most productive in the world. It pays the nation’s highest wages on average, contributes about 27 per cent of total company tax revenue, delivers by far the most export revenue of any sector, and is critical to supporting regions and communities.
Our mining companies – with constant innovation, world leading technology and highly skilled people – will help take Australia to the frontier by delivering the critical minerals needed to build windfarms and store renewable energy such as lithium for batteries. They will continue to be a superpower.
And agriculture, another of our bedrock industries, continues to meet the world’s insatiable demand for Australia’s produce and value-added products because of technological advances that means our food is safer and greener.
Every day I see small manufacturing companies using new processes, new designs, new equipment and training their people differently so they are now part of world leading value chains in defence and advanced manufacturing. The challenge is scaling them up.
If I now go to our everyday lives.
In other industries, embracing new ways of working and technology have unlocked additional value and importantly, they have improved services for people.
In health, better productivity through new innovations and digital systems is improving patient care.
Take nurses. They spend way too much time doing paperwork when they could be spending more quality time with patients. And a lack of connected digital systems means patients have to endure answering the same question multiple times from multiple people instead of discussing their health.
In retail, innovations have improved customer service. Supermarkets have evolved significantly over time through barcodes, self-serve checkouts, apps to find items within the store and home delivery.
I have met people who have worked on supermarket checkouts for over 50 years. They are amazing people, who loved their jobs. They told me one of the main reasons they were able to continue working was having technology on their side.
The Bunnings Product Finder App saves time for customers, reduces the need for workers to guide customers around the aisles seeking out a product, freeing them up to provide valuable DIY advice and other assistance.
Without productivity gains driving a stronger, more resilient and growing economy, we’re left squabbling amongst ourselves over ever diminishing returns.
The last decade was the slowest in 60 years for both productivity and income growth. This isn’t a coincidence.
So the answer must be to drive productivity harder through policies that encourage innovation, investment, reskilling and upskilling, and salvaging the enterprise bargaining system which delivers workers $100 more a day than those on awards.
Make no mistake, we in the business community understand that when organisations are more productive, workers must be able to share in the benefits through higher wages and better conditions.
Now finally, let’s turn to the third priority where we must find common ground – flexibility.
Australia cannot reach the global frontier and be more productive if we are a fossilised economy. If we are bound up in outdated and unnecessary rules and complexities that make it harder to innovate or for workers and employers to sit down together to get the most out of their workplaces.
The country cannot be successful if it is rigid – whether that’s getting new skills; putting trucks on the roads; getting new inventions approved quickly; building a house, shopping centre or new offices; or getting a major renewable energy project off the ground.
And for people and families, COVID has shown us that people value flexibility. They like working creatively and having more control over their lives.
Flexibility is not about insecurity. I would argue flexibility is essential to secure work. It’s about allowing people to work the way they want to get the most out of their jobs, and it’s about enabling employers to get the best performance out of their teams. And the online revolution has proved that consumers want flexibility.
So, if we can reach agreement on those three things as an ambition, we will be in a good starting position. Then there’s the how. The summit has a number of themes. We think if we can agree on some resets in each area, we will be on track to progress the country further to the frontier.
On developing future industries, the first step is to ask ourselves what we are good at and then focus on scaling up our strengths globally. This will require an investment mindset – not grants – and an emphasis on nationally significant precincts and coordination across the Federation.
On skilling up Australians, students need to leave school with a comprehensive snapshot of their abilities and capabilities, not just a mark to define their future. And then, we need to redesign the tertiary system so it is more agile and interoperable between VET and higher education and centred around learners and their employers.
On a migration system that bolsters our talent base, we need to agree that well-managed skilled migration is a key driver of Australia’s prosperity. We need to move from short-term, ad hoc migration to a long-term planned system focusing on four-year visas, pathways to permanent migration and future planning of our population growth so we get housing, transport and health services right.
On advancing women, we need confirmation that one of the biggest injections to economic growth comes from increasing women’s workforce participation and enabling them to progress, advance and lead.
Women’s participation is a core economic issue, not a side issue. We must break the barriers to advancement, to leadership and start by unambiguously and consistently stamping out harassment and bullying in every business, in every organisation in every part of the country.
On a workplace relations system that works for all, we need to agree to restore the role of collective bargaining as the centrepiece of a modern IR system because it delivers better outcomes for both workers and employers
But it must be designed to deliver outcomes for both workers and employers and be accessible to different types of employers. It also has to be vastly simpler and easier to navigate.
And finally on tackling disadvantage, the resets must agree to move from the language of deficit to the language of potential for Indigenous Australians, disadvantaged Australians and those in regional communities.
I’m optimistic about the summit. I don’t believe for a minute that we will solve every problem over two days, nor is that a realistic ambition.
But if we could land agreement on the three fundamental priorities – diversification, productivity and our ability to adjust and change quickly and get some of the resets right – we will have made huge progress.
And let’s remember, at the centre of all our discussions must be the responsibility we carry on behalf of those Australians who will not be at the summit. A responsibility to come to terms with the reality of the world we are in and create the foundations for them and their children to have meaningful jobs, rewarding lives and world leading living standards.
Jennifer Westacott AO is the chief executive of the Business Council of Australia