Virtual Address - Business Council of Australia AGM

19 Nov 2020
Prime Minister

PRIME MINISTER: Well thank you very much Tim for those very kind words.

And can I say, a more extraordinary summary of the year we’ve just had and what’s involved, I don’t think I’ve heard. So thank you very much for that and I join with you in thanking all of those many other leaders, all those many other hard working people whether they have been leading businesses or running small and medium sized enterprises, working in public departments, in health or even of course in places like Services Australia processing people’s payments. 

It has been an extraordinary year since we last met. And that was an excellent I think, run-down of what it’s been and it took me back I’ve got to say on more than one occasion.

I’m very pleased to hear about the announcement on Rappville by the way, it was around about, a little earlier last year, I was in Rappville and I stood under the shade cloth of the school in that community that had been devastated and the fact that you haven’t forgotten them, we haven’t forgotten them, I really want to commend you for that. That shows the initiative that you set about, Sir Peter was very practical, very grass-roots based and I’m, along with the many other communities, KI and the rest of it. But I’ve got to say I was rapt to hear about Rappville. So thank you very much.

Well g’day from iso, day one. Named, I'm told, by the Australian National Dictionary Centre earlier this year as the 2020 word of the year. I suspect there are a few other words that have been mentioned over the course of the year with great frequency, but iso seems to be the one that they've landed on. 

So it's great to join you, Tim and Jennifer and all the members of the BCA. Albeit in these rather different and strange circumstances. 

Can I join you in acknowledging where I am, of the Ngunnawal people, elders past, present and the future. 

And particularly today, can I acknowledge all serving members of the Australian Defence Force and our veterans and simply say to them, thank you for your service from a very grateful nation. They have earned the respect with which they are held by all the Australian people. 

But you’re right Tim, this year has tested us, our families, our communities, our businesses, our governments, our public institutions, like few that we can recall, certainly in my lifetime and for many generations. Let me say at the outset just how incredibly proud I am of our country and how it has performed. 

Everyone has played their part, as you've said, business in particular, large and small, right across the country, banks, utilities, companies, airlines, miners, supermarkets, local small businesses, who have adapted to challenges and demands of restrictions in particular operating in a COVIDSafe manner, the adaptation, the innovation all on display.

Today Australia is one of just a handful of countries leading the world in both our health and economic response to the pandemic, as you rightly say Tim, saving lives, saving livelihoods. I’ve got to say, it was the East Asia Summit on the weekend. I heard one of the leaders use that exact phrase and I was encouraged by it. I must have used it so often. 

Recent outbreaks across the UK and Europe and India and the US just reminds us the risks are there. The virus hasn't gone anywhere and that we must remain vigilant in our fight against the virus, that is so essential to maintaining the positive economic recovery. 

Rapid response. You're right, on the economic front, the government did recognise that we needed to act fast and purposefully. The longer the economy, we knew, spent in recession, the slower and harder it would be to restore the economy to full employment once COVID-19 was under control by whatever means. Our economic support packages, they did provide timely assistance to affected workers and gave them great encouragement, to businesses and the broader community, 700,000 jobs we know we’ve saved according to Treasury estimates, the doors of tens of thousands of businesses kept open. And today we know, 648,500 Australians have now returned to work since May. And there are positive signs that customers, consumers and businesses are gaining greater confidence in the recovery, as we've seen week after week, as confidence surveys continue to improve and return to pre-COVID levels. 

Recent positive news on the prospects of an effective vaccine are also encouraging, the Governor of the Reserve Bank, Phil said earlier this week, the stimulus that is already in the system, the general strength of the private sector balance sheets, credit to those chief executives and boards, and the significant government support for firms to invest and employ. They provide the conditions for a rapid rebound. 

With one very important condition though, which we all know - that we continue to manage the virus effectively. It has a habit of reminding us about this all too frequently. Even then, though, we still face the big challenges you’ve flagged, to support the transition to a private sector led growth and to get Australians back into jobs for the long term. 

Appropriately, our government has done a lot of the initial heavy lifting to support the economy during this crisis. JobKeeper, JobSeeker, JobTrainer, business cash flow boost, HomeBuilder, our direct support for the aviation sector, the tourism and entertainment sector, the business events sector, there has been much of this. 26 percent of our economy, including the significant monetary interventions undertaken by the Reserve Bank, have been put in place to ensure Australia gets through this. 

We even made payments to keep the animals fed and cared for in zoos. That's how practical the federal government support came down. But we must not lose sight of a critical fact. Only a private sector led recovery, a business led recovery can be sustainable and drive the necessary growth for the future. 

Our government passionately believes this, a business recovery, that claims new ground - that's essential. Managing the virus and delivering strong policy responses on both the demand and supply sides, that will build confidence and is. Encouraging consumers to draw on their savings, providing an environment for businesses to invest now and fostering the transition to that business led growth. 

The government's 2020-2021 Budget did just this, significant tax relief by bringing forward stage two of the personal income tax plan that delivers tax cuts to more than 11 million taxpayers backdated to the 1st of July this year. The extension of the instant asset write off, an instant expensing measure now, which will allow 99 per cent of businesses to write off the value of assets they purchase, and one that I'm very, very passionate about- the temporary loss carry back for companies with a turnover of up to $5 billion, lowering the costs of business investment and providing targeted cash flow boost for business, able to utilise COVID losses now. And I call them COVID losses because these losses were not achieved through any fault of these businesses. COVID hit our economy. And we believe it's very important that those businesses that have had good years coming in, can access the tax they paid to get them through it, not have to wait years in order to realise and use those losses in the future when their profitability returns.

Very much, we are a shareholder in the Australian economy and we've acted like a responsible shareholder. Understanding that your prosperity is the country's prosperity. 

Treasury estimates these measures will create around 100,000 jobs by the end of 21-22 and increase GDP by around $6 billion in 2021 and $19 billion in 2021-2022. Now we're also supporting businesses that take on young jobseekers through the JobMaker hiring credit. This provides businesses, as you know, the incentives to take on young jobseekers with a credit of $200 dollars a week for each additional employee they hire aged 16 to 29 years old and $100 hundred a week for those between 30 to 35 who are eligible as well. Now we know that in recessions, it's younger people for whom the scarring on the labour market is the most damaging and the hardest to recover from. So this isn't about excluding others. It's about prioritising some to ensure that the worst effects that we know from recessions aren't realised in this recession, as we go through this recession. 

We need businesses to seize those opportunities to invest, grow and create new jobs and to drive that recovery and claim new ground. So I want to turn now to some of those areas of policy that I know of considerable interest to the BCA. And in many respects, we discussed this time last year and through the course of this year as we dealt with the impact of the pandemic.

At the start of the pandemic, the government was quick to identify the rigidity of Australia's industrial relations system as a barrier to overcoming the jobs challenge confronting us. It couldn't be business as usual. Put simply, the system could not deliver the flexibility that COVID not just required, but demanded. Something as simple as requiring staff to work from home did not fit comfortably with many modern awards, let alone those that aren’t so modern. 

Business couldn’t reduce someone’s hours or change someone’s duties, even when the sole point of that change was actually just to keep them in a job and the business afloat. And through the JobKeeper legislation, we amended the Fair Work Act twice on a temporary basis so that businesses could make these simple but necessary changes. These provisions played an important role in allowing businesses to survive and keep people in jobs, and without them, many would have had to let staff go or close the doors. 

I also want to join with you, Tim, in thanking the ACTU. They came to the table. I remember contacting Sally, asking her around, we had a cup of tea and we talked about what we hoped to achieve, now we didn't make big promises to each other. We just promised to get around a table and do the best that we could. And I agree with you. I think she's been able to bring the ACTU some distance and hopefully more, let's see. Let's just see. But I do appreciate the fact that she stepped up and as a result, that brought with it, ultimately the support of the Opposition when we came to pass those measures through the parliament, for which I'm also appreciative. 

Now, at the same time, I was determined to take the opportunity COVID presented to go further, not just in dealing with those immediate needs. In June, I announced the establishment of five industrial relations working groups to look at problem areas within the IR system in order to reduce barriers to job creation. Now, the BCA was a key member of the Enterprise Agreement Working Group and has provided valuable input into the four other groups on greenfields agreements, award complexity, compliance and enforcement, and casual and temporary workers. This is a big effort that you put in. This was a significant investment.

As I said when I launched this process our goal is to try and build as much consensus as possible around our reforms. I said our approach will not and has not been and will not be driven by ideology wars, it will be pragmatic, it will be balanced, it will be realistic in scope, and it will be achievable. 

For too long, industrial relations in Australia has been seen as a zero sum game, a battleground with massive effort and political capital spent beating chests trying to secure ultimately, what only end up to be often very marginal changes. Years later massive effort and capital are then spent on trying to reverse that very reform under a different government. Now we've got to get a lot smarter about this. And that was the approach that I hoped to start back there earlier this year, to get changes and to make them stick. And I think the process we've been embarked on, will, can deliver that and will deliver that.

I'm pleased to say a lot of the work has been done now behind the scenes in the past few months, and the working groups spent more than 120 hours in negotiations spanning some 35 meetings, which formally concluded at the end of September, a big effort for which I'm very grateful. Attorney-General Christian Porter has done an extraordinary job, just like the Treasurer in his very quick and very timely and well considered response in driving our reforms on the economic supports through the pandemic. 

Consultation with stakeholders has been significant on a package of legislative reforms. Now it remains our intention to introduce an omnibus bill in the Parliament by the end of this year. The Cabinet will consider that very shortly. It will be a reform package that moves employers and workers forward, and one that complements our JobMaker plan by helping businesses have the confidence to hire and get people back to work and also massively reducing red tape. 

In the case of enterprise bargaining, I know particularly important to the BCA, we know there are not enough agreements delivering productivity improvements for business and higher wages for employees. Agreement making is becoming bogged down in detailed, overly prescriptive procedural requirements that make the process just too difficult to undertake. And agreements just simply don't happen. They're just too difficult to get approved, both employers and unions have recognised that this system needs fixing through this process. And the government has identified various issues that need to be addressed and will be. The test for approval of agreements should focus on substance rather than technicalities. Agreements should be assessed on actual foreseeable circumstances, not far fetched hypotheticals dreamed up in wherever they happen to dream these things up, and the Fair Work Commission assessment of them should take place quickly, quickly within set time frames where there is agreement from the actual employees and employers involved to be able to get on with it. 

Key protections like the better off overall test will continue to be an important part of the framework. However, our goal is to ensure it will be applied in a practical and sensible way so that the approval process does not discourage bargaining, which is what is happening now. And that must change. As we saw with the JobKeeper flexibilities, reform is possible when the benefits to all sides are clearly understood, when they’re worked up as far as possible together, where there are appropriate safeguards and protections and that they are included to prevent reforms being abused. 

Now, I don't expect our reforms will lead to people having parades in the streets or the opposite for that matter, I don't expect there to be universal agreement from the union movement. Businesses won’t see their version of industrial utopia for some either. But it will be genuine in its attempt to fix real practical problems in a way that provides shared benefits. The reforms will be significant enough, I believe, to shift that needle for employers and workers so they can move forward to get more people back to work, done in a way that doesn't repeat the tired ideological battles of the past, and one that provides certainty for everyone involved. This is the same approach we've taken throughout the COVID pandemic - solve the problem, work the issue, work with others pragmatically finding the right balance so we can, as you reminded us again tonight Tim, save lives and save livelihoods. It is my mantra. It's true. 

Alongside improving the flexibility of our labour market, our success is getting Australians back in to work also by helping them to reset the skills environment in which we operate. How well the skills of our workforce match the needs of our business. That's the test. We all know that Australia needs high quality and responsive skilled system. Jennifer's been an advocate for this over a very long time and that, one that provides skilled workers, businesses need the skilled- sorry provides the skilled workers businesses need, that supports those out of work to gain the skills that are in demand. 

Now, again, our Budget extended wage support to employers taking on a new apprentice or trainee with an additional $1.2 billion to deliver 100,000 new apprenticeships, now importantly we made that programme available to businesses of all sizes, including large businesses who have the confidence and capacity to take on new apprentices in uncertain times. And just last month, BHP announced it was investing in 2,500 new apprenticeships and traineeships over the next five years, as well as partnering with the government to deliver a further 1,000 advance apprenticeships and short courses in regional areas. When I got this news, John Kunkel would tell you, I lit up like a Christmas tree. I thought it was fantastic. These employment and training opportunities reflect confidence in Australia's prospects, but they also create hope, real hope, particularly for younger people embarking on their careers, which is particularly hard for them in an environment like this. By keeping apprentices in training and boosting new commencements, we're maintaining the pipeline of skilled workers that our economy depends on.

Results, they are encouraging, the number of apprentices and trainees and training contracts has recovered to be above where it was in March, and it is rising. On the job apprenticeship training is also one part of the story. It's also critical to ensure there are good off the job training options to support upskilling and reskilling for jobseekers and school leavers. That's why we partnered with the states and territories through the National Cabinet to establish the $1 billion dollar JobTrainer fund, that fund is providing over 300,000 training places that are free or low cost in areas of identified skills needed. 

Now if you want to know, there’s a lot been said about the National Cabinet, how we set rules for whether people can go to barre classes or not, and a whole bunch more important things as well, I suppose, but that was a good process and we did work together. But the JobSeeker agreement - we were able to bring together in a matter of weeks, and bring together not just the funding to support the more than 300,000 places, but we're able to do it with a commitment to further reforms beyond the current year. Of all the things National Cabinet has done, and I'm proud of so much of the work we've done together, state leaders and the Commonwealth, that one said to me, we need to deal with the problem now and we need to build for the future. And that gives me a lot of confidence going into next year with all the many other challenges that the National Cabinet has to deal with, things like mental health reform, aged care and the like. 

The National Skills Commission under Adam Boyton, known well to the BCA is playing an indispensable role in identifying those skill needs, we’re now all benefiting from the, Adam’s rich data driven insights, as you have previously done - on the labour market trends and skills developments, including through his expert briefings to both the federal Cabinet and the National Cabinet. A good example of that was the creation of the Resilient Occupations Index, where the National Skills Commission has mapped expected demand for over 300 occupation types and analysed whether COVID-19 has led to any major changes in future demands. And this in turn has provided the evidence base, a big missing piece for the design and rollout of the JobTrainer fund, including an agreed course list and prices. 

All states and territories have signed up, and free or low fee training is available right now in New South Wales, South Australia and Western Australia, with other states due to roll out very soon. So a young person coming out of a tough final year at school in these states, in New South Wales for example, and wanting to become a mechanic and to do a Cert. 3 in engineering for free. An older Australian out of work in South Australia and looking to switch careers because of COVID could take up a free or low cost Cert. 4 in cybersecurity, ageing support, or mental health. And you don't need to spend 2 to 3 years studying if you don't need to. Around two thirds of the JobTrainer places is expected to be in short courses. 

For those looking to up skill, there will be skill set courses available in fields like digital imaging, coding and business administration. Courses like these can be completed in weeks, not months, and be relevant beyond our focus on boosting training places in response to the COVID-19 pandemic, we are determined to lift the standard of the VET system through the longer term reform I referred to. All states participating in JobTrainer have signed up to what is a very ambitious heads of agreement on skills reform, committing to immediate reforms to rationalise national VET qualifications, and introducing improved industry- industry engagement arrangements.

Minister Cash is working with her state counterparts on these reforms as a priority. Through the National Cabinet, the Commonwealth and all states and territories have agreed to work towards a new national skills agreement by August of 2021. Priority for the new agreement includes a new funding model that improves the national consistency of subsidies and is linked with efficient pricing and the skills needed by employers. 

I've always said that this is a system that my government would be prepared to invest more in, I wasn’t going to throw money at an old broken system that people weren’t prepared to fix. But through the National Cabinet, through Michaelia’s excellent work with her ministers. I'm seeing that willingness to make those changes, we’ve got a long way to go yet. We get there, then it's worth investing more in for all of us. 

Now likewise, we need our higher education sector and our research institutions to support our recovery. This year, we turned to our scientists and researchers more than ever, I've seen more white coats than I have in a very long time, and it's been great to get their input. On Monday in Melbourne, I visited CSL Seqirus, where production of the AstraZeneca vaccine has begun. Tremendously exciting. Some of our best minds directing all their talent and ingenuity to creating something that will allow us to resume a form of normal life again. 

I saw the same bright, amazing people up at the University of Queensland as well, working on their molecular clamp vaccine. And that's just in the vaccines area. Science and research is not just helping us fight COVID-19. It is at the heart of helping our economy grow back stronger. 

Now, for this to happen, businesses and researchers do need to come together. This has been a real failing in Australia. The reality is Australia is a laggard when it comes to business collaboration with higher education and research institutions. And you are both at fault, as is the government. This means we aren’t capturing the full benefits of our world class science and research. We aren’t capitalising on it enough to improve lives, to grow our wealth or to create jobs. The Government understands this and we understand what we need to do. 

The importance of our world class science and research community and the role it can play is vital to claiming that new ground on the other side of COVID-19. That's why, recognising what we needed to do the Budget injected over a billion dollars into university research. And I commend Dan Tehan for the great work he's done there to ensure the ongoing capability and excellence of our research workforce. And over $450 million for the CSIRO to support the important science and research work they are doing. So we're investing. We want to provide a platform and a pathway for our talented researchers to partner with you, with businesses all around the country and to apply their intellectual firepower as research entrepreneurs, research entrepreneurs. That's what we want to see. That's why we committed $5.8 million in the budget for a scoping study to examine options for a new scheme to accelerate commercialisation on priority university research and the advice of our business and university leaders will be critical in scaling up our ambition and getting this right. 

The Minister for Education, Dan Tehan, has formed an expert panel as part of this scoping study made up of several BCA members, including senior representatives from BHP, Cochlear, Macquarie and Siemens. Jeff Connelly from Siemens has kindly agreed to be the chair. And I thank him very much. I urge all of you to be involved in this exercise in advance of next year's Budget. We do need your ideas as much as we need the ideas of the scientists, your leadership and your dollars to bring out more of our R&D spend to commercial advantage. 

Now, let me finally touch on two other signature elements of the government's economic plan, our energy and manufacturing strategies. We are resetting Australia's East Coast gas market unlocking additional gas to drive recovery and developing a world leading Australian gas hub to support higher wage jobs, including in manufacturing. We are putting downward pressure on energy prices while developing the backbone of a reliable, reliable, lower emissions national electricity market. 

We are investing more than $250 million to accelerate all priority transmission projects identified in the AEMO Integrated Systems Plan. These interconnectors will create jobs and integrate our world leading levels of renewable energy generation into the grid. 

Australia is in the midst of that renewable energy boom, per person Australia's investing in renewable energy 10 times faster than the global average and 4 times faster per capita than in Europe, China, Japan or the United States. 

We are committed to the Paris Agreement and our international targets. Our policies have us on track to meet our 2030 target of 26 per cent below 2005 levels. We intend to not just meet our commitments but to beat them. We see them as a floor for our ambition, not a ceiling.

As a country, when we make a promise, we keep it. And we have delivered in spades on our Kyoto era targets, beating them by around 430 million tonnes, that’s around 80 per cent of Australia's annual national emissions. 

Because we've delivered, we have the option of using these credits towards our next commitment period. This is the so-called carryover. It's much like getting ahead on your mortgage repayments. I've also said we will only use that carryover, though, to the extent that is required. Let me be very clear. My ambition, my government's ambition is that we will not need them. And we are working to this as our goal, consistent with our record of over delivering in these areas. And I am confident that our policies will get this job done. 

Now, I hope to have more to say about this before the end of the year as we update our emissions projections that will take into account new policies and measures. Looking beyond 2030 we want to reach net zero emissions as quickly as possible and to achieve this through technology, not higher taxes either directly through government sanctioned electricity prices or as a result of a carbon tax. Higher electricity prices is not the policy certainty I'm looking to provide. And I won't make a commitment on behalf of the Australian people unless I can tell them how we will achieve it and what this will cost. In this respect in relation to these commitments. Australia truly does stand out. 

We are actively working through those considerations right now, including how our practical technology based approach can get us there. Our technology investment roadmap which will guide an expected $18 billion in government investment to 2030 and a further $50 billion dollars in co-investment, will drive reductions in the decades after 2030. Getting these technologies right will avoid around 250 million tonnes of emissions each year by 2040. 

Affordable and reliable energy is a cornerstone of the government's plan for revitalised manufacturing in Australia. Coming out of COVID-19, it forms part of the productivity platform necessary for any successful industry policy. Lower taxes, simpler industrial relations, world class training and skills development, less red tape, enabling digital transformation. That's that's step one of having a manufacturing plan in this country and we’ve made it step one as part of our plan, but our $1.5 billion manufacturing plan set down in the Budget is also about setting priorities in areas of genuine competitive advantage, resources technology and critical minerals processing, food and beverage, medical products, recycling and clean energy, defence and space. 

We’ve nominated them. They are the priorities. We will also work to improve supply chain resilience in securing sovereign capability in areas of national interest. And just this past week, we announced a $1 billion dollar investment matched by $800 million from CSL Seqirus for a new world class vaccine and antivenom manufacturing facility in Melbourne. 

Again, we are keen to have the closest possible partnership with industry in the development and implementation of our manufacturing strategy. Minister Karen Andrews has been driving this from the day after the last election and indeed before. Working very closely with key industry stakeholders in each priority area to co-design the road maps that now need to be developed. And that will set out clear goals and performance metrics over the next 2, 5 and 10 years. She's doing an outstanding job.

So friends, this year has challenged us, as Tim reminded us, like no other in living memory. But with challenge comes greater opportunity. And I want Australians to look to 2021 with hope, with aspiration, with confidence in their selves and in a country they can be just so proud of by what we've been able to achieve this year in the most difficult of circumstances. 

We have one of the best records of any country in the world for managing the health and economic impacts of COVID-19. 

That has required enormous effort by so many people. And I particularly want to thank Greg Hunt as our Minister for Health. Greg, working together with his team at the Department of Health, Brendan Murphy and Paul Kelly have been an extraordinary group of people to ensure that we could lead on the health response that has enabled us to lead on the economic response with the Treasurer and so many others, including Mathias Cormann, who has now retired from the parliament. 

Our task now is to complete the transition to a business led economic recovery in a COVIDSafe way. And I know you share that ambition. With 8 out of 10 jobs in the private sector. We need businesses back out there employing people, investing and claiming that new ground.

Our Australian team has rallied this year. And so far we have risen to that challenge and now we need to push on and win on the other side. Thank you so much for what is, I'm sure your very patient attention during this format. 

Thank you.