Australian Economy

Business Council of Australia CEO Jennifer Westacott says productivity is vital to government’s economic recovery

Business Council of Australia CEO Jennifer Westacott says it is not time for the government to “kick the can down the road” on productivity changes in the hope of boosting economic recovery.

Business Council of Australia Chief Executive Officer Jennifer Westacott has advised against “kicking the can down the road” as she called on the government to implement short-term responses to rebuild the economy.

Ms Westacott appeared alongside Treasurer Jim Chalmers at Australia’s Economic Outlook luncheon, which was presented by Sky News Australia on Wednesday.

“I think what we’ve got to do now is not kick the can down the road anymore on these big productivity changes that we need to make, we’ve got to do some short-term things,” she said.

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Mr Chalmers said the current situation gave Australia a “really big opportunity” to create a stronger economy once the “choppy waters” are navigated.

“It will get harder before it gets easier but I’m confident with the spirit that I’ve detected in all the conversations I’ve had in the last 18 days… that we can get through a difficult period and we can have a strong economy and strong society after we do,” he said.

Ms Westacott pleaded with the government to improve productivity to ensure the economic recovery was managed rather than continuing to prolong the response.

“I think surely the time for kicking this down the road any further on those big productivity changes we need to make,” she said.

“I don’t know how many more near misses this country needs to have before it doesn’t miss one.”

The Business Council leader outlined what productivity changes she wanted to see to help the economic response which has been stalled by high levels of inflation, Tuesday’s rate rise from the Reserve Bank of Australia and record national debt.

Ms Westacott said it was time to “get our act together now on those productivity enhancing things” which will drive wages and investment and improve the skills system.

Among the changes was an improvement to the industrial relationships system and to get the energy policy “sorted once and for all”.

“Manage the transition properly, rather than argue about whether you need to have it or not. And then obviously, make sure we bring the community with us,” she said.

Labor’s “Powering Australia” policy has promised to create, jobs, cut bills and reduce emissions by upgrading the electricity grid to fix transmission.

The labour market has been incredibly strained since the pandemic with immigration levels plummeting due to border closures.

Ms Westacott believes if this continues it will be a “handbrake to recovery”.

“Everyone is so constrained by this and people, I think, artificially think this will somehow in and of itself inflate wages, it will inflate them in certain pockets but it will actually stop more being done,” she said.

“We’ve got to find ways of incentivising people to come here we’ve got to make the skills system more attractive we’ve got to move from two-year visas to four-year visas and then of course we would like to see a temporary increase to migration… with a 70 per cent weighting on skills.

“Finally we’ve got to make it easier to bring people in there is so much red tape in getting people into the country, so much friction in the migration system we need to clear the way and make sure that we are doing that as easy as possible.

“Behind that… we’ve got to skill Australians… and we’ve got to do that faster, better, smarter.”

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