AFR business summit | Prime Minister of Australia
PHIL COOREY, HOST: Thanks, Prime Minister. My name is Phil Coorey, I’m the political editor of the AFR. And we’ve got time for a quick Q and A with the PM before he has to get back to Parliament. So, again, appreciate your time. This is the first time the summit has overlapped with a sitting day.
ANTHONY ALBANESE, PRIME MINISTER: I can give you a lift back.
COOREY: I’ve got to stay for Peter Dutton.
PRIME MINISTER: The offer stands.
COOREY: So this is your fourth business summit, PM, but your first as Prime Minister, you’ve done three, I think, as Opposition Leader. So if I could just begin with the speech.
PRIME MINISTER: I think I might have done some as Infrastructure Minister too.
COOREY: You can interview yourself. If I could just go to the speech before we get into the broader issues, you sort of talk about the challenges and the exposures of COVID in the economy, the things that have been laid bare and need to be fixed. You talk about energy security and the volatile energy market, and in doing so you go out of your way to mention the role of gas in the transition. That’s a big topic in Parliament at the moment, with you trying to get the legislation for the safeguard mechanism through. The Greens, some independent Senators are railing against the ongoing use of gas and want you to pretty much rule out and ban any new gas projects. Is your message today sort of deliberately aimed at that as much as the engineering reality of energy?
PRIME MINISTER: It’s just aimed at where we’re coming from, being straight. And being straight, gas will play a role in renewables. A company, I don’t know if they’re here or not, but I assume they are somewhere, like Rio, what they want to do in Gladstone with their aluminium refinery and other activity. They want to move towards hydrogen, they want to move towards renewables and to power that, they need the firming capacity of gas. And that is the case for so many companies as they move towards net zero where they want to be. So I think my concern as well, I guess my message is twofold, that a message to the Greens and others that for all of the rhetoric, if it doesn’t stack up, if it has a negative impact, then you’re not actually helping the transition of what you say your objectives are, and to the Opposition as well, I mean for goodness sake, this is a safeguard mechanism that was put in place by Tony Abbott. How the Coalition can say they are a credible organisation concerned with business and oppose something that business is crying out for, that certainty. I believe in markets. Government has a role though in setting frameworks to facilitate private sector activity. And this is the perfect example. The safeguard mechanism is supported universally. I don’t know an opponent in the business community, in the resources sector, in any of these areas that require that certainty going forward. If you have that certainty, you will see the investment flow in, but you need that framework, and gas is a part of that.
COOREY: Well, following on from that, principally, would you be opposed, to ensure the transition to a new gas field or an expanded gas field if that was what was required over the next few decades?
PRIME MINISTER: I firmly believe that those decisions should be based upon the return on capital that private sector make. The Government’s role is to set a framework but also to obviously have proper environmental assessment based upon the merits of projects. Governments have a role to do that, but we will need, in coming years, we will need additional supply. And for all of the rhetoric of my predecessors, nothing happened in that decade. Nothing. There wasn’t a project.
COOREY: Ok, thanks PM. As my editor Michael Stutchbury mentioned in the opening speech, you were here last year. There was a wariness in the business community about a Labor government among some sections. You’ve spoken about your willingness to work with business. You mentioned the spirit of Hawke-Keating, and that was sort of the broader theme of your speech today. And you harked back to the Jobs and Skills Summit. One of the big, I guess, developments from that was the industrial relations changes. A lot of business leaders at that summit, some of them felt like that was already locked in before the summit, felt a little bit ambushed. You’ve got another big IR agenda coming up for the second half of this year, we’re looking at labour hire, the gig economy, wage theft, things like that. There’s a lot of nervousness, I know in the mining sector, in the airlines, in retail about labour hire, how do you envisage nuancing that through with business and getting the balance right?
PRIME MINISTER: Having a straight conversation, being honest about it, which we’re being. If labour hire is used simply to drive down wages, that’s a bad thing. If labour hire is used for specific purposes, companies need to contract things out then that is a good thing, that’s a necessary thing. But when you look at economic insecurity, business has very much an interest in working people having a stake in the system. And if you look at what’s happened, dare I say it in front of the Ambassador, in some parts of the disenfranchisement that led to a previous election in the United States, I think, was people in industrial areas feeling like they just had been left behind. And not having a stake in the system, the sort of anger and dysfunction and division, in Australia, we haven’t had that. We haven’t had people, whatever the problems, we haven’t had people storming our Parliament House after an election. We, I think, need to be really cautious about making sure that Australians who are doing it tough are able to see more security in their work, are able to have what they need to be able to save for a home and to plan a family. And some of the casualization in the workforce can be a good thing. For many people it’s an option, provides flexibility, good for business, good for individuals. But I do think we need to make sure that the system works for business and works for workers. And the other thing that I want to see, and I think we’ve seen this since the election, the legislation that passed the Parliament last year. I’m not aware of any mass breakout of general strikes in Australia since then. Now that’s something that was predicted by some. It hasn’t happened. We think that productivity bargaining is really important. I spoke about this before the election at the Australian Chamber of Commerce and Industry speech. There was too much focus on gotchas during that campaign rather than serious speeches and contributions in some of the policy analysis that went on. But it is important, that issue of secure work is an issue out there. And if you don’t get on top of it, it can get away from you.
COOREY: Okay. It is as always with these things a balance.
PRIME MINISTER: Sure.
COOREY: And to pay people, you have to make money and have a profitable economy.
PRIME MINISTER: And I support, I very much see that, and I’ve spoken about this for a long period of time. I’ve sometimes copped some criticism for doing it in my own ranks. But business and unions have common interests. How do we have a system, and that’s where I refer to the Hawke-Keating legacy, that common interest in how we drive productivity, drive business growth. I say the same thing, by the way, to a business group that I say to unions. You can’t have trade union members if you don’t have successful businesses. And one of the other things I say to the BCA and others, I’ve said for a long period of time as well, is that the most likely venue to find a trade unionist is in a big business. There is an incentive there for both to have to work together for common interests.
COOREY: We did do a poll in the lead-up to this summit and published the results today. And it’s 47%, roughly half of businesses across small, medium, large, fear a recession within the next twelve months. The Reserve Bank Board is meeting this afternoon and is widely tipped to push up rates, I think, for the 10th consecutive time. Do you subscribe, I mean, what’s your view? Are you worried about recession? Or do you think we can skate through? What’s your message?
PRIME MINISTER: You can never skate through, and that’s part of my message today. You need to actually be active and on the front foot for growth. I’m optimistic, frankly. The kind of person I am, it helps to get up in the morning and be optimistic, but I am. I think that this difficult period we’re going through, of dealing with supply chain shortages, dealing with the transition in energy that we’re seeing across the economy, dealing with the impact of the Russian invasion of Ukraine. Dealing with all of this, we have our eye on the immediate challenges, what do we need to do immediately, right now? So last December is the best example of that that you’ve seen with price caps that wouldn’t have been envisaged as being possible, let alone being done in partnership with Liberal state governments such as here in New South Wales. So you deal with the immediate crisis, but you set yourself up for the medium and long term. And I think we can do that. I think business in so many areas has been just ahead of government over a long period of time. On energy, on gender, on growth, on trade, on all of these areas, I genuinely listened to Mike’s speech this morning, there is nothing that Mike Henry said that is different from where the Government positions ourselves. Nothing, not a word.
COOREY: Do you have any proposals or ideas how you could facilitate the role of business? I go back to the last Budget your predecessor handed down before the election, and the theme of that was very much a business-led recovery. It’s not dissimilar to the themes you outlined today, but that was sort of spoke about measures to stimulate business investment.
PRIME MINISTER: Yeah, but they all ran out on May 21. I mean, that’s the truth.
COOREY: Absolutely.
PRIME MINISTER: And one of the things we’ve had to inherit in terms of our Budget is that so many measures stop on July 1. You know, there were there were these fiscal time bombs there. For all the talk about Alice Springs, community services funding stopped on July 1, ran off. The funding for, to give another example that will be of concern to the business community, the whole eSafety issue and Commissioner, and all of that work that Julie Inman Grant is doing a fantastic job in, funding stops. Is the program going to stop then? We’ve got to find money for all of that as well. And that is something that the ERC has been grappling with. That’s the context of us coming up with a very modest change, supported by the Fin Review, I must say, on super. You have to be able to do some things in the economy to set things up, rather than just occupy the space and be scared of any reform at all. And part of what we will be looking at is ways in which we can do more to facilitate business activity. And in part, that is what the safeguard mechanism is about, that’s what the skills agenda is about, that’s what so much of the reforms that we’re putting forward are doing. Child care reform is about that as well, at a considerable cost to government. That’s the largest on-budget cost. But we’ll look at other things as well. And the relationship with business I find incredibly constructive. The delegation to India is such a serious delegation, and my door is open to the business community at all times.
COOREY: You did mention super, and you have dipped your toe in the water in the last week or so with that. And it caused quite a ruckus for, as you said, a relatively minor change. Is that sort of the end of it for reform, tax reform this side of the next election or tax changes? Do you think it’s getting too difficult now to even do more, a comprehensive package? Everyone speaks about the need for reform, but once you get down into details, it quickly bogs down. What are your plans, and if I may add, you got a very positive reaction in Newspoll to that. Does that embolden you to maybe have another crack at something else?
PRIME MINISTER: Well, reform is difficult. Because we have a Parliament that’s difficult. We have a Parliament that is empowering the crossbenches, because the Opposition just say no to everything, even their own policies. So that makes it difficult. We are determined, there’s a reason why we put in place the changes don’t come into 2025. So we cover off on the argument over what was said before the election. But what we said then was very honest as well, which is that we didn’t know. I wasn’t aware someone, maybe they’re in this room, whoever’s got the half a billion dollars in super, if you can put up your hand, everyone’s really interested in who it is. The 17 people who’ve got 100 million. When you get briefed by Treasury about that, you’ve got a responsibility to act.
COOREY: That problem did exist before the election.
PRIME MINISTER: If you were aware of it, I wasn’t. So I hadn’t seen it reported anywhere. But that was the advice that we got. And when you look at the purpose of super, it was very clear that that’s not the purpose of superannuation. So it was a worthwhile reform to do. But I’ll disappoint you, Phil, and say that there’s no big announcements on new policy on tax coming here.
COOREY: Okay, just finally, we’re almost out of time. You’re off to India tomorrow?
PRIME MINISTER: We head to Perth to preposition tonight for a flight to arrive tomorrow afternoon.
COOREY: Well, as we’d know, the purpose of the visit is to try and crack new export opportunities. It’s been going for a while, I think, since the Varghese Report and so forth. But I guess of interest to people in this room, what odds do you give of a trip to China this year for yourself? Given the reproach that’s happened in the last six months, do you think there’s a likelihood? Would you like to go?
PRIME MINISTER: I’ve said that if there’s an invite, then I would accept that. I think it’s been a good thing that the relationship has got more stable. We want a more stable, secure region. And I’ve said we will cooperate with China where we can, we’ll disagree where we must, but we’ll engage in our national interest. And they are our major trading partner, so we do have an interest there. And we also have an interest in a mature relationship, what Kurt Campbell from the US speaks about, a return to diplomacy. Stopping the loud hailer. Frankly, use of international diplomacy to send domestic political messages is what we saw towards the end of the previous government. That wasn’t about Australia’s national interest or about our security. It was about sending a message here. And we, through Penny Wong, who’s worked incredibly hard and I think is a sensational Foreign Minister. I think the relationships are being better. One of the things that we’ve we haven’t done, though, is flag things, because that changes the dynamic of the power relationship, if we say, if I flag a desire. We’ll just deal with it on its merits. But we’ll deal with China recognising that there are differences there. We have different political systems, we have different values, but we’ll engage in a constructive and mature way because that’s in the interest, too, of Australian jobs, and in the interests of China as well. I say this, it’s in Australia’s interest to export to China, but it’s in China’s interest to receive the magnificent products that we produce here in Australia as well.
COOREY: Okay. Well thank you, Prime Minister. We’re out of time. So, ladies and gentlemen.
PRIME MINISTER: Thanks mate.