Media & Speeches

Jennifer Westacott Interview with Kieran Gilbert, Sky News

Interview with Kieran Gilbert, Sky News
Speaker: Jennifer Westacott
Date: 9 May 2018
Topics:Budget, income tax, company tax, Newstart allowance
E&OE

Kieran Gilbert, host: Let's get some more reaction to Budget 2018, joining me from the BCA is the Business Council of Australia's chief Jennifer Westacott. I know you spoke to my colleague David Speers last night and overall I saw your reflections, you're pretty positive, Jennifer.

Jennifer Westacott, chief executive, Business Council of Australia: Yeah, very positive. Look, it's a very strong budget, it's budget that's focussed on growth through better business conditions, through really good spending in infrastructure, through getting the budget back to surplus more quickly. And from that growth we can reinvest in tax cuts for low income earners, we can reinvest in a very strong aged care package, we've got extra spending in health and education. I think the point I was making last night and the point I want to keep making is this budget is absolute proof that when business conditions are good, when business is thriving, the country can thrive and we can put back to the things that people need. Business revenues, or business tax payable to government, is going to go to $100 billion over the forward estimates, a trillion over a decade, which includes the tax cuts. We need to make sure that we keep the foot on the pedal to keep keep our businesses strong and competitive because we're still too reliant on external factors like commodity prices. 

Kieran: And that's the question, isn't it, that underlies this budget – is it too optimistic? Is it locking in the short term revenue to try and achieve a long term tax change, like we're seeing on the income tax plan?

Jennifer: Well, some of the assumptions, I think you've just heard CommSec talking about the assumptions about wages. I think the challenge now is how we actually get these assumptions to be correct. I mean an assumption about a plus three per cent GDP number should not be unrealistic for this country, that's the number we've had for the last 30-years that led to these living standards we've got. You know, we are very concerned that economic growth is at 2.4 per cent, that's not good enough, we should be doing better, we've got all of the right circumstances. This is why getting the business community, which drives 80 per cent of economic activity, we've got to get that to go harder and harder and harder and protect itself from a more competitive economy. What we've got to do I think is to make sure we're getting relief to low income earners now, right now, and then as the tax plan for personal income tax rolls out you'll see that falling into middle income earners. So, I think it is pretty carefully calibrated, Kieran.

Kieran: And in terms of the, you know, the broader numbers, like the iron ore assumptions and those sorts of things, the government says it's being quite conservative in this sense, is that your view?  

Jennifer: I think it has been, I mean, I think the challenge again though if I can just re-emphasise the point is that we don't leave the economy to the chance of external factors that are often beyond our control, this is why the tax cut is crucial, that's why the signal to big companies is crucial. I mean big companies aren't getting this tax cut for a long time. Middle income Australians will be getting their tax cut long before the big companies but the signal matters and it matters because it drives that productivity and that investment, which buffers us from the kind of fluctuations in commodity prices. So I think the assumptions are conservative but we need to make sure that we do everything we can to keep the economy ticking along, and actually ticking along much harder. 

Kieran: And what's your view of the prospects internationally at the moment, it is still a fair bit of volatility, risks of the trade wars and so on erupting. Is your, are you sanguine about where we stand at the moment? 

Jennifer: Yeah, pretty much. I think all the analysts are right. We've got you know global growth ticking up but it is still a very volatile world, both economically and geopolitically. Any of these things can sort of change that outlook and that's why we need to do everything about making our own economy more resilient, improving our productivity, improving our competitiveness, we just can't be buffeted by those external factors all the time. 

Kieran: When it comes to the Newstart allowance I know it's not normally your area of commentary but you have been supportive of an increase in Newstart, why is that and are you disappointed the government didn't go there because I spoke to Mathias Cormann just a few minutes a go and he says, well, you've got to look at the individuals and the families concerned. If they're on Newstart it's transitional and they get other payments as well in terms of rental support and family payments and so on.

Jennifer: Yep, look I think we're talking about people particularly on, single people on Newstart who are getting $39 a day. Look, I've been banging on about this for years. I do think we need not just a change in the allowance, we need a serious package to make sure unemployed people, that very disadvantaged people get back to work, stay in work. That's about literacy, that's about helping them with skills, that's about getting our job services' networks to work harder. I agree with the Finance Minister that we don't want people to be on welfare, we want them to have job opportunities where they can work. But we've got to make sure while they're on Newstart that it's adequate, that we're not entrenching them into disadvantage, that they've got the opportunity to get back into the workforce because they're able to maintain a reasonable standard of living. I mean $39 a day is not a lot of money, it's a very low amount of money for people to actually live on.   

Kieran: Indeed, it is hard to imagine really. But as I say the government would argue that there are other components that assist, we'll have more of that debate coming up. The Prime Minister joining me in about 20 minutes. Jennifer Westacott, thanks so much, appreciate it. The BCA chief Jennifer Westacott joining us.

Jennifer: You’re welcome.