Media & Speeches

Jennifer Westacott Interview with Andrew Bolt, The Bolt Report, Sky News

Event Interview with Andrew Bolt, The Bolt Report, Sky News
Speaker Jennifer Westacott
Date 2 May 2018
Topics Business reputation, anti-business agenda, company tax rate, Karl Marx
E&OE

Andrew Bolt, host: Well, joining me, is the woman trying hardest to convince us that the government is right about these tax cuts. It is in Australia's interest to cut business tax cuts, business taxes. She's Jennifer Westacott, head of the Business Council of Australia. Jennifer, thank you so much for your time.

Jennifer Westacott, chief executive Business Council of Australia: You're welcome.

Andrew: Now, how much is the Business Council spending on this campaign to support the business tax cuts? 

Jennifer: Well we're not doing that. This kind of report, the Labor Party is putting around, that we're spending over $20 million on tax cuts. That's simply not correct. We are raising money for another campaign which we can come back to called Australia at Work, which is about trying to remind everybody in Australia the role of business in creating jobs and the role of big and small business working together. We can come back to that.

We've obviously, as part of our normal activities, been campaigning on company tax, but we're not doing a big advertising campaign. We're doing things through social media, but to your introductory point, look, you know I'm not a fool, it is very difficult to argue for this, but we have to look at the bigger picture here in the long-term.

We can't use economic policy as a punishment tool. We have to remember future generations. We have to remember that if we don't do this, we're going to leave $18 billion of permanent growth each year on the table. While our competitor countries, like the US, a big trading partner, go further and further ahead in terms of their competitiveness and on wages.

There's only a few ways you can get wages to go up - you increase productivity, which means companies invest more, they do more, they expand, they put more people on, they give people better jobs, they pay them more. People who are not employed get jobs because there's more activity in the business community. People get more hours of work, you know, so that they can actually get higher wages. We want to have higher wages, but it doesn't come from wishful thinking. It comes from driving the economy, into greater productivity. It comes from companies investing. It comes from companies using that marginal dollar to do more and that's where the tax rates matter and this is just lost on people and it's very disappointing that the Labor party who once argued, Bill Shorten, in 2011 that lowering the company tax rate would improve our competitiveness, drive investment and would be good for wages and more jobs. Now, you know, it's only gotten worse since 2011. So, I guess, I am pleading with people to see the bigger picture here, to see the long term, and of course deal with the stuff that's coming out of the Royal Commission through the laws, strengthened them if you want to, but don't punish this generation of Australians and future generations of Australia because you want to get back at the banks.

Andrew: I should declare that the separate program you mentioned about the role of business in the community. You're partnering with Sky, which is getting paid as well, for that. So we should put that to one side, that doesn't influence me of course at all. But Jennifer, I can sense your frustration. How much do you think these banking scandals have hurt your case a publicly? 

Jennifer: Oh there's no doubt they've hurt it. They've hurt many arguments for business reform. It's always a great opportunity for the anti-business brigade now to, kind of, strengthen their arm in their case for kind of rolling us back to some 1970s economy for, kind of, purporting a whole lot of socialists policies that would really be very bad for the country. 

My fear though, Andrew, is that we lose sight of this long term. We go back to unleashing a self defeating, destructive anti business policies, that ultimately actually hurt the poorest people. Not the richest people. It's the poorest people who suffer when economies fail or when they falter. And people are asleep on the job in this country. Our economy is growing at about 2.4 percent per year. It used to grow in the plus threes. If we want the freedom to do the sorts of reforms in tax that we should be doing over the long-term, if we want to invest in infrastructure, in education, and health. If that economy just plops along at 2.4 percent, well we won't be able to do it. And, politicians are incredibly dishonest with the Australian community about that and I'm out there fighting for this, not because I enjoy being attacked by the Labor party, but because I fundamentally believe that this is the right thing to do.

And even Wayne Swan, when the company tax was being debated, when they were in government said, ‘you don't do company tax cuts because they're popular, you do them because they're the right thing to do’, quote unquote. Well, they are the right thing to do and now is the time to do them.

Andrew: I saw Bill Shorten, the Labor leader, again today using the banking scandals in order to pour rubbish all over the proposed business tax cuts. Do you think too much has been made to the banking scandals? I'm sure you didn't approve of what you're hearing about, but is too much being made of them?

Jennifer: Well, look, it's a judgment call isn't it? I mean there's obviously tremendous media interest. It's a great story, I guess, to kind of run this every day. And of course it's very disappointing that all of business gets tainted. I think what I get very distressed about is when people say, you know, we don't want to give a tax cut to business, well who the hell do people think business is? Business is the 10 million people who work in private enterprise. Business is the 5, 6 million shareholders. Business is your superannuation and my superannuation. Businesses is the suppliers, thousands, hundreds and thousands of suppliers, who depend on big and small business working together.

So when people say business is some kind of abstract evil entity, they are forgetting that's the people in Bunnings, that's the person who runs the local shop, that's the guy who's running the little manufacturing plant. Unfortunately this kind of way of taking incidents from the Royal Commission and then saying, all business is bad, that's a disaster for our country. Because it will produce policies that we know don't work, and are very dangerous. What I hope the Royal Commission does, Andrew, is that it looks at some of these systemic issues. What are the incentive structures that generate these sorts of behaviours? 

Andrew: Absolutely.

Jennifer: Obviously, boards have got to get this under control and if it's just a sort of a case by case thing and we don't actually get to the bottom of what is actually wrong in the system, we'll have really missed the whole point.

Andrew: But Jennifer, if you were a politician, right? It seems to me almost a no brainer in this current environment, particularly with people's wages, is essentially flat tracking with the inflation rate. If you're a politician, the choice is do you offer business tax cuts, the proposed government ones or have extra money spent on giving people personal tax cuts? Particularly when there is a case that money in people's pockets is actually more likely to stimulate the economy faster. 

Jennifer: Well, I think the economists are in mixed views about that. I mean, we've always argued you should do both. The trouble is if you don't get the economy growing systemically, if you don't get it growing over the long-term, whatever you do on tax gets eroded in five or six years' time because you're just not keeping pace with economic growth. We've always argued tackle bracket creep and lower business taxes and the government, to be fair has a pretty modest plan, I mean it's 10 years before the big companies actually get that cut. But, it sends a very important signal to companies like BHP and Rio Tinto, who've got big projects. Regional communities are crying out for that. I was in Townsville a few weeks ago. I tell you what, you didn't have many arguments about the need for a company tax cut there because they're crying out for the big companies to come back and deal with their 14 percent youth unemployment and their nine percent normal unemployment. So I think what I would do is do both. And I would try and - 

Andrew: Would you live with the government cutting out the banks from this deal? Because that seems too hard. Just say, the banks are excluded but we'll give the tax cuts to everyone else? 

Jennifer: I just think it's another big distortion and I think with a distortion between big and small. The banks don't get the cut until 2023. They don't get the full cut until 2026. This idea that you, that you cut out everyone over $500 million, well that cuts out BHP and Rio Tinto. Now, when I was in Washington with the CEO of Rio Tinto reminded media that they have more shareholders in America than they do in Australia and he's accountable to those shareholders for the best return he can get.

So, I think we've got to be very careful that we don't punish the whole economy and that we don't make the banking system uncompetitive. I mean it has been the bedrock of our economy and our society to some extent. It did see us through the global financial crisis. By all means, punish the people who've done something wrong. By all means, tackle the cultural problems, by all means tackle the systemic problems. But if we just have a broad ranging hit on the economy, I think we will actually cause more damage. 

Andrew: Now Jennifer, in some ways, dangerous times, that might be too strong a word, but I don't know, it seems to be arising in radicalism. You've got in Britain, of course, Labour leader, Jeremy Corbyn, who's basically a socialist really. You've had a socialist Bernie Sanders run Hillary Clinton very close in the Democratic nomination for president. May Day yesterday, you saw left-wing radicals going on a rampage in France that brought us back to the 1960s, at least 200 arrested. What do you see happening next? 

Jennifer: Well, I think there is a radical move. Look, to some extent, I understand it. If people's wages are staying flat, if their cost of living is going up, it's very easy for people to come along and say, I've got the solution to that. Let's get stuck into these corporates and all will be well. Well, you know, we know that's just not true and this is the snake oil stuff that these people are selling to people who are very vulnerable and I really a care about people who are working and people who's wages are not going up. And I want to see that happen. And that's why we've got to make sure we keep our businesses competitive. So, I think we will see parties move further to the left and I think we will see a lot of things, you know, this whole crazy idea of the Greens to have this social wage. How on earth that would get funded, you know, it beggars belief. But I think we will say these things. I think we will continue to see this big attack on, on private enterprise. And I think we'll obviously see people moving further to the right. What I'm trying to do is get the sensible center. Because it's the sensible centre - 

Andrew: Look, you need it. Listen, on Friday it will be the 200th anniversary of the birth of Karl Marx, the great prophet of communism wanting an end to private property. And in fact, China is donating a huge statue of Marx which is going to be set up in his hometown in Germany in Trier. No doubt that's great for attracting Chinese tourists. But should they really be such celebrations for Karl Marx given his legacy? 

Jennifer: I think the most important thing is to reflect on what that legacy is. 200 years later, we have never seen, to the best of my knowledge, a successful model in the way that he was purporting. Now a whole lot of people will say, you know, you wouldn't do it exactly that way. What we've seen is totalitarian authoritarian regimes. What we've seen is that most people want to get out of those countries rather than, rather than live in them. And in the case of China, they've spent a very, very long time starting to shift, albeit slowly, to a capitalist model. Why? Because they want to lift the living standards of people who are poor. They want to take people out of rural poverty and create a middle class. I mean, you know, you can put a statue up if you want, but I think the thing to remember is that model has not worked. And worse than that, Andrew, worse than that, it has produced regimes that are the most destructive regimes to the poorest people. Regimes that are authoritarian, corrupt, and who have done tremendous harm to the most disadvantaged, the poorest people. I don't know many people who wanted to live in communist Cuba. And so when people kind of celebrate these things, they have to remember and be very careful what they're wishing for. I have never seen this model work.

Andrew: Exactly.

Jennifer: Never seen it work. And more importantly, it has been to the destruction of poor people. I mean, they didn't put the Berlin Wall up because people wanted to stay there. They put it up there because people want to get out of there. 

Andrew: Absolutely, correct. And Jennifer, I think it's just so sad that Germany accepts a giant statue from a police state to, in honour of the man whose theories actually created so many of them around the world. Jennifer Westacott, thank you so much for your time.  

Jennifer: Absolutely. You're very welcome. Thanks.  

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