Media & Speeches

Jennifer Westacott - Interview with Miranda Devine, Daily Telegraph Podcast

Event      Interview with Miranda Devine, Daily Telegraph

Speaker  Jennifer Westacott

Date       2 May 2018

Topics    Business reputation, company tax, Royal Commission, For The Common Good

E&OE

 

Miranda Devine, host: For too long business has avoided getting its hands dirty by advocating good economic policy. Instead, it’s really left the ground to left wing groups like Greens and GetUp! to set the narrative to policies they want. And really, they've been winning. We have close to the highest personal income taxes in the OECD and the majority of people in Australia pay no net tax at all and yet the left has successfully put about the myth that we need higher and higher taxes. Well Jennifer Westacott, the head of the Business Council of Australia is setting about to change all that with a new advocacy group which is pro-business and basically runs like a right wing GetUp!, I think. The advocacy body is called Centre Ground and its campaign and website is 'For The Common Good' and it aims to tackle anti-business forces. Jennifer Westacott I'm glad to say is in the studio to talk about it. So, good on you for doing this. What sort of triggered you to do it?

Jennifer Westacott, chief executive Business Council of Australia: Well it's part of a bigger campaign which we can come back to. But look we have to play in the same field as, you know, the left-wing advocates, the anti-business advocates. I think there's some big differences with what we're doing to what GetUp! does. But, you know, we can't afford to have the country taken over by this anti-business force because we will end up with a set of policies that are, you know, so called popular but they will be our undoing. You know, policies that will reduce our rate of growth. Policies that will make us an unattractive place to do business and my concern, Miranda, is, you know, for all this talk of fairness, you know, the greatest unfairness is to allow the country just to flounder and allow our economy to just grow at 2.4 per cent when we are used to it growing in the 3s. 

Miranda: And unemployment to rise.

Jennifer: And unemployment to rise. So, when people kind of go on and on about fairness. You say, well how fair is it to allow our businesses to not be able to compete and not be able to, kind of, create new jobs. How fair is it to allow wages to be stagnating because we actually can't get our productivity up and we can't compete and we can't create the conditions for higher wages? How fair is it that we aren't able to create the new jobs and replace the jobs that are going to be disrupted? So, we want to change that conversation. We want to do it at a grassroots level at an electorate level, both marginal and safe seats, if there are any of those left, and basically try and do it through a, kind of, policy advocacy so it’s not candidates, it’s about policies. So, we recently did one in South Australia on retail trading hours and shopping trading hours, where South Australia has been in the 1950s and hasn't kept pace with the rest of the country. And it's interesting, 54 per cent of people said that they supported deregulation of shop trading hours. When they saw our material in For The Common Good that went to 69 per cent. So, you can have a difference. The difference with us and GetUp! is this, we are not going to be political. We are not going to support candidates. We are going to run on policy issues and they will be bipartisan. So, you know I am a big supporter of fixing the VET system, probably have got more in common with the Labor with that. 

Miranda: Apprentices.

Jennifer: And apprentices. I've been on about this for years, that our apprenticeships system is near collapse. So, we are not going to pick a left-wing agenda. I mean when I see GetUp! being described as an independent organisation, I just think people must fall laughing at that. 

Miranda: Especially when you know that the unions fund them. The CFMEU I think...

Jennifer: Correct. And no one has ever questioned them on how they siphon, how money is siphoned to them and how they siphon money. But look, you know, we have to stand up for this and notwithstanding all of the issues that the business community is dealing with at the moment, if we don't present that centre argument, that argument for a strong economy, that argument for a bigger pie, that argument for a strong business community, in 10 years' time when our economy has just flocked along at 2.4 per cent or gone backwards, people will say 'God what were those people doing a decade ago?'. Where we still kind of, we've just got surpluses, maybe that we can get over the line, our wages aren't growing. I'm not going to stand by and let that happen, because, you know, this anti-business agenda that frankly has always been there before all this stuff happened with the Royal Commission and stuff. These people have always hated private enterprise. 

Miranda: And the idea of fairness, you're right, fairness became a code word. I mean this was even before the 2013 election for left-wing policies or anti-business policies.

Jennifer: Absolutely. It's really important that we redefine fairness. Because as I said, how fair is it to say to some person in western Sydney who's trying to get their little business going. Well we're going to slam you with regulation, we're going to restrict what you're doing, we're going to give you a really inflexible industrial relations system so you actually can't get going. Well that's really fair. Well it's not and we need to call that fairness argument out for what it really means.

Miranda: Have you had to do this and step into a vacuum that the Coalition has left because they're not advocating well enough?

Jennifer: Well look I'm not going to comment on their advocacy. But look, you know, there is a vacuum there and to be honest our critics would say we've taken too long to get there. Look, that's probably right. You've got to have the infrastructure to do it. You just can't invent this. You've got to have the resources to do it and now business is stepping up and giving us those resources. It's also important to say it's part of a broader campaign. So, we've got the Common Good which is grassroots campaign and then we've got an Australia at Work campaign. So, when people say we're spending lots of money on an advertising campaign for tax cuts, actually, that's not correct. We're raising money for a campaign called Australia at Work. Which is a campaign that seeks to reinforce that it's business that creates jobs - 86 per cent of them. It's business that puts money back into the community and it's big and small working together. We know that when we talk to people in the community. In fact, those ads don't even mention the word 'tax'. They're all about the people in our workplaces. The people who are enriching communities. We need to remind people of that. Because, as I said, if people forget the basics fundamentals that it's business that creates the wealth that our society enjoys, we will end up in a very bad place. 

Miranda: There's some research that says that you're grassroots campaigning actually did have an impact in South Australia and the South Australian election. Do you accept that?

Jennifer: I don't think so. I think it was too narrow. Look, I think there was some mood for change. Lots of people will do election research. I think people want to say that. I think, they want to say that because they want to portray this as a bad thing. You know...

Miranda: Well Labor is doing that.

Jennifer: That's right. I mean they say it's fine for GetUp! to do all this stuff, there's no problems with people, you know, during the 2016 election robocalling old women to tell them an absolute lie that Medicare was being privatised. That's okay. That's alright. But when business seeks to go out into the centre ground and actually try and remind people what the policy issues are, that's terrible. 

Miranda: Or calls for low taxes and low regulation.

Jennifer: Call for low regulation. Calls for less red-tape. Calls for a strong economy. That's a shocking thing. Somehow we've got into ourselves a position that the worst thing that could happen is that we grow the size of the pie, the worst thing that happens and people can get a job. I mean, what kind of a country are we going to become?

Miranda: Well, but you must be actually causing Labor to get worried because Kristina Keneally has been absolutely mad on Twitter the last couple of days about your grassroots campaign group and I see that she really stooped to some pretty low tactics yesterday and revealed the home addresses of various of your staff who are involved in the For The Common Good campaign. What do you say about that?

Jennifer: Well it's disgraceful and look, you know, we live in a free country. We live in a country where people are entitled to say, well, we are going to step into this area and campaign for good policy. We are not going to, as I said, campaign for particular candidates. We're not going to handout how to votes with BCA on our t-shirts. That's not what's going to happen but we are going to be for good policy and people don't like it. They don't like it when the centre comes back and says actually we're not going to put up with that and we appeared before a senate inquiry last week to find ourselves confronted with some pretty aggressive union tactics. Some very aggressive unions tactics.

Miranda: A lot of that from Kristina Keneally as well?

Jennifer: Well she then Tweeted that which is very disappointing. And you know, you expect to be treated with respect. You expect to have a robust conversation. I'm up for that. I mean I've been defending and advocating this company tax cut for a long time and I'm happy to be questioned on it but I'm not happy to be intimidated and bullied.

Miranda: They were trying to link you to Cambridge Analytica, in America, and those sort of scandals. 

Jennifer: Yeah I mean, let's be clear. 

Miranda: Are you part of that?

Jennifer: No. We haven't used Cambridge Analytica. I met with them in Washington when we were over there looking at what are lobby groups doing. This was all before all the kind of stuff erupted about them and we took a view that they weren't the right fit for the Business Council. But of course you're going to meet with some of these people at the time, in 2017...

Miranda: It's not the mafia anyway.

Jennifer: But, you know, I just find it really curious that people kind of make this to be...suddenly this is terrible. Wayne Swan describing this as anti-democratic. You know, this is the person who promised surpluses and given us a decade of deficits. This is just not on and I think we're entitled to step into the same field. What we won't do is peddle misinformation and peddle mis-truths. We will not intimidate people. We won't run scare campaigns and we won't siphon money around. That's the difference. We're going to run on policies and we are going to run in marginal seats and across the electorates. You know, people don't like it. They don't like it when you step up and I think giving people's home addresses is really a disgrace actually.

Miranda: Appalling. Well she did, I think, black out those addresses in the end but it's just not on. 

Jennifer: They were there for a while.

Miranda: Now, what about the bank's Royal Commission? That's been a bad look for the banks and for big business generally I guess. What do you do about that image problem?

Jennifer: Yeah, look, there's no doubt that what has come out of the Royal Commission is terrible. It's shocking. The challenge is how we make sure we quarantine punishment for the people who've done something wrong in the legal system that's there for that to happen versus using public policy and economic policy as a tool for revenge as some kind of tool for punishment. That's not what economic and public policy is there to do. 

Miranda: Do you mean stopping the corporate tax cuts to punish the banks?

Jennifer: Yeah, because you know this $500 million cut off, well that would have included BHP. Now BHP, in front of that Senate inquiry was very clear - $32 billion of projects, 15,000 jobs that were highly contentious on things like the tax rate. So, do we really want to punish the economy? The banks don't get the tax cut until 2023 and it doesn't flow to them for quite a long time. They're paying a levy of $1.5 billion a year. Are we seriously going to punish the shareholders - the mums and dads? Are we seriously going to punish everyone in the banking system? The regional bank manager who's been helping out a local community for years. Are we seriously going to punish the whole economy because we want to punish, and we should punish, executives who have done the wrong thing? So, we need to be very clear. What has happened and what has come out of the Royal Commission is unacceptable, it's wrong and people should be dealt with under the law. But to say, let's use that now as an excuse to kind of ramp up this anti-business rhetoric, come up with a whole lot of anti-business policies and punish the whole economy and ordinary Australians. That is not the way we should go. 

Miranda: Is there some cultural problem then at the top of corporate Australia? You know, the boards, the top executives? What we've seen, certainly in the banks, is that, AMP for example repeatedly lying to ASIC, ripping off customers. We've seen it at the banks, CommBank, Westpac and so on. Is there some cultural problem that's common?

Jennifer: Well I think this is what the Royal Commission needs to get to. Whether it's the executive pay structures, whether it's the incentive arrangement. You know that's what I'm hoping the Royal Commission does, is actually look at those structural issues that cause some of these behaviours which are clearly wrong to happen. And that we get a system where the roles and responsibilities, the separations, the accountabilities are such that these things don't happen again and we need to as corporate Australia, stand back and say what do we need to do now to get our house in order? And that's about making sure that boards are on top of their material, that they're very clear about their relationship with management, that they're not just relying on third parties for advice. That doesn't mean they can run the company, they can't run the company. It's clearly not possible if you're on a board to run a company and nor should you. 

Miranda: Do you agree with Scott Morrison though that boards are ultimately accountable for what goes on?

Jennifer: Of course they are. They're tremendously accountable for culture. Bob Every, the former chairman of Wesfarmers used the say the board is the custodian of the culture. I think everyone now needs to stand back from what's happened and say what are we the custodian of? What culture are we the custodian of? How transparent are we? How clear are we with our customers? How clear are we with our employees? Are we on top of our risk register? Are we on top of our relationship with our regulators? Let's not just accept third party advice as if that's right, let's make sure that we've really interrogated that. But I think, again, it's very important that we don't chuck corporate Australia to the wind which will just damage the economy, damage our capacity to grow and grow the size of the pie. We've got to make sure we target the actions where they're needed. I do think corporate Australia now needs to stand back and say we've got to look and make sure that none of us are going to go through this again because we've done the right thing and we've got our house in order. 

Miranda: So, I've written a couple of columns about this in recent weeks as a result of the bank's Royal Commission that, you know, that corporations seem to have lost their focus, they're so intent on having these huge HR departments and focusing on gender diversity and virtue signalling and so on. That they've, especially companies like banks that are looking after people's money, that they've completely neglected things like integrity and prudence, those virtues that you'd expect them to focus on. Do you think that the corporate virtue signalling is a problem?

Jennifer: I think, you know, I gave a speech on this a while ago about companies needing to go back and find their real purpose. That's not a return on equity, that's not a financial target, that's a really clear set of 'what is my purpose?' What is the kind of value I'm adding to the community? What are my customers really want? What are the services they want? What do my employees want? That's what I think is purpose and what is our fiduciary, responsibility as custodians of our shareholder's money? What is our integrity? That's what they have to make sure that they're focused on. I think it is really important to be clear, you know, this hasn't happened because more women are on boards, but I will come back to the whole diversity issue.

Miranda: That was of course the column that I wrote today which was really that this idea of, you know, that gender diversity on boards, quotas, this has been all the push and all the rage for the last decade really and you know we have lifted the percentage of women on boards but a lot of them are there, not necessarily on merit, I mean they are certainly younger, they have less experience in that than you might have expected in the past. Do you think that appointing someone to a board on gender rather than merit is a good idea?

Jennifer: I don't think many people do that. I really don't. I sit on one of these boards and I can tell you the process I went through was as rigorous as processes I've ever been through. I do think we've lost the plot on what diversity is all about. I think we've over-emphasised the gender diversity at the expense of what are the other broad aspects of diversity.

Miranda: Because no one talks about diversity of thought.

Jennifer: Diversity of thought, exactly. You want people with critical thinking, you want people with different skills, you want people who've managed things, who've managed big change. You want people who are part of new markets. This is all of course depending on what kind of organisation. You want people who are used to dealing with risk. You want people who are interrogators. You want people who are constructive questioners. I mean, I sit on one of these boards, you want people to be collegiate. You want them to have integrity. You want them to know their stuff. You want them to question material. You want them to bring a diversity of experience and that's what we should be talking about. Diversity of experience and in terms of gender diversity, I think where we've got to kind of refocus is getting a pipeline of people of capable executives and making sure that people are exposed to the whole business. I always say this when I give leadership talks to women. It's not always a popular comment, I have to be honest. But you have to know the whole business. To be in senior management, you've got to have the money and you've got to have run the operations because if you can't understand how the business model works, how the customer works, how the money works, how the operation works, how the accountability and risk works, it's very difficult to manage in a crisis. Now that applies to men and women. But I think we've got to go back and remember why we're doing diversity. It's not just a gender issue. I've always been an opponent of quotas because I think that's not what you should be aiming to do in a board. You ought to get the best people and frankly if that's 65 per cent women so what?

Miranda: Right. Well I'm all with you. Thank you so much Jennifer Westacott for joining us and good luck with your push back against GetUp! and the Greens.

Jennifer: Thanks very much.

Miranda: That was Jennifer Westacott, chief executive of the Business Council of Australia.

 

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