ACCI responds to Annual Wage Review decision

Sky News NewsDay, Monday 3 June 2024

Topics: Annual Wage Review

E&OE

Kieran Gilbert: What’s your assessment of the wage decision today, is it reasonable?

Andrew McKellar: Look, 3.75 per cent, I think this tests the limit of what business would see as being a reasonable outcome. The good thing is it’s nowhere near the extreme position that the ACTU were arguing for, and I think that would’ve been a very bad outcome if we’d gone significantly above inflation, five per cent and more in some sectors. I think from an inflation point of view, broadly, this is neutral. It’s not really reducing the pressure on inflation for business. The real concern is particularly small business at the moment, they’re facing extreme cost pressures from increased regulation, red tape, wage pressures are still there, and if we don’t see productivity really picking up in the next few quarters, then I think that’s going to be a concern.

Kieran Gilbert: What’s the biggest worry right now for small business? Is it the interest rate pressures or falling demand from consumers? What’s the thing that you’re getting from your membership?

Andrew McKellar: There’s a range of things, and there’s no doubt that the confidence took a hit in the first quarter. Orders were weaker, so demand has come off. Interest rates have done their job. But the other thing that we’re picking up, and this is coming through very clearly from small businesses, they’re very concerned about the impact of red tape compliance that’s grown over the past year. It’s growing more, particularly with things like the industrial relations changes coming through in the coming months and coming quarters. Small businesses really struggling just to keep its head above water in terms of the amount of compliance that it’s having to do at the moment.

Kieran Gilbert: But this decision today by the Fair Work Commission, as you said, it tests the limit, but it won’t be putting business over the edge. Will it sort of increase?

Andrew McKellar: I think the one concern we’d have here is, is there a continuing delinking between wages, growth and productivity? We think that this is fine from the point of view of just looking at a neutral position in relation to inflation, but if we want to get real wages moving, we want to see that achieved sustainably. We’ve got to get productivity going.

Kieran Gilbert: I had Tony Burke on the program earlier, the workplace minister, and I asked him, I put some of the criticism from you and others that their IR changes are hurting the prospects for productivity. He rejects that notion. He says there are many other ways to drive productivity right now, and it shouldn’t have to be the lowest paid that have to suffer in order to drive productivity. What do you say to that?

Andrew McKellar: Unfortunately, the government’s industrial relations changes have been crushing and productivity. That’s the reality. And going forward, it will make it much harder for business, for small business to make the decision to employ people going forward. Whether that’s in casual employment, whether that’s independent contractors, whatever it is, that’s a significant additional compliance burden that business is struggling with at the moment. That’s on top of all the other factors. So I’d have to disagree with what Tony Burke said.

Kieran Gilbert: Why is it harder to put on workers moving forward for a small business? If you wanted to put on one or two workers, what are the changes that…?

Andrew McKellar: In terms of the definition of what is a casual employee, the fact that there is much greater uncertainty as to how that will be applied in the future. Of course, business has to adjust now to comply with a number of those changes that have been put through. That is adding to that amount of time that business has to take and the risk when they take somebody on that potentially if they get into a situation of dispute, that they’re going to be tied up with further cost of litigation as a result.

ACCI responds to Budget on Sunrise

ACCI responds to Budget on Sunrise

Event: ACCI chief executive Andrew McKellar and AMA president Professor Steve Robson interview with Natalie Barr and Matt Shirvington on Sunrise.

Topics: Budget 2024-25

 

E&OE

Natalie Barr: Australia’s health sector received a major boost in last night’s budget with new funding on the way for 29 urgent care clinics and extra financial support for student healthcare workers.

Matt Shirvington: On the business front, the government has also committed more than $560 million to support Australian innovation and industry. And one million small businesses will receive $325 in energy bill relief. To unpack, let’s bring in Andrew McKellar from the Australian Chamber of Commerce and Industry and President of the Australian Medical Association, Professor Steve Robson. Good morning to you. First to you Andrew. The Treasurer is confident his Budget won’t further fuel inflation and predicts inflation will fall to between two and three per cent by December, which is look a little bit earlier than the RBAs forecast. Right. So are you concerned that they’re going to get it right?

Andrew McKellar: Good morning, Shirvo. Good morning, Nat. Great to be with you. Look, I think we’re cautious about those forecasts. I think it’s great that the government has got a second budget surplus, so that shows that they’ve been responsible in the last 12 months. But if we look ahead over the next couple of years, then we see deficits reemerging. We see spending going up. And in that sort of context, it’s very difficult for that to take heat out of the economy, to keep inflation going lower. We’ll see what the Reserve Bank thinks, but it would be hard to imagine that this Budget would bring forward the date on which the Reserve Bank would start lowering interest rates.

Natalie Barr: Lots of opinions around this morning. People want to know how it’s going to help them. What about small businesses? Is there enough support for them?

Andrew McKellar: Small business is doing it extremely tough at the moment. They’ve been facing rising costs just as households have. There’s slim pickings in the budget for small business. So there are a couple of things that are welcome. Certainly the extension of energy bill relief, which will reach a number of small businesses projected about a million. That’s useful. There’s an extension of the instant asset write-off. Again, that’s just been legislated from last year. So I think if the government gets on and processes that quickly, then those are boosts for small business. But beyond that, we’re not seeing a whole lot.

Matt Shirvington: There needs to be more on that. Steve, let’s go to you. Healthcare, significant new funding on the way for aged care, public hospital, student healthcare workers. Some of that delayed though. Is that what you are hoping for?

Steve Robson: I think we had a sense of disappointment with the Budget last night, and a lot of patients, people want to know that they can get an appointment to see a GP, that they can afford that care, that all of the hundreds of thousands of Australians who are waiting for planned surgery around the country can have their operations done. And people with chronic problems like mental health will get support. And I don’t think we’ve seen a lot of funding going to any of those in the budget last night. These urgent care clinics, they’ll be a help. They look urgent care clinics are somewhat controversial. There’s not a lot of, they serve their purpose, which is keeping Australians out of emergency departments. We feel that the best way to keep Australians out of emergency departments is to make sure they can see a GP and get great care. So we’re a little disappointed with the announcements last night, but we’re hoping to keep working with the government as we move forward so that Australians can get the care they need, the operations they need as soon as they need them.

Matt Shirvington: Okay. Andrew, Steve, thanks for cutting through some of the detail for us.

ACCI responds to Budget on Sky News

ACCI responds to Budget on Sky News

Event: ACCI chief executive Andrew McKellar interview with Peter Stefanovic on Sky News First Edition

Topics: Budget 2024-25

 

E&OE

Peter Stefanovic: So we’ve had a bit time to crunch through the numbers now. In your view, is it going to help or hurt business?

Andrew McKellar: Well, morning, Pete. Look, I think there’s not a huge amount in it directly for business. I think what business fundamentally was looking for was a clear sign that there’s a medium term strategy to get the budget back into better shape. That we would be reducing net debt over the medium term. Now we’re not seeing that beyond this year, a surplus this financial year. That’s a good achievement, but out over the medium term, we’re seeing higher spending, higher deficits and higher debt. So we are concerned that that won’t take the pressure off inflation and it won’t take the pressure off interest rates.

Peter Stefanovic: So that’s your view. I mean, so we’ve kind of got short-term gain for long-term pain. Without that medium term strategy, what happens to business then if that’s not brought under control?

Andrew McKellar: Well, I think what business is looking for is to get those fundamentals right at the moment. Small business in particular is absolutely struggling against a tide of regulation red tape, but we need to ease those cost pressures that one of the best ways to deliver cost of living relief and relief in terms of business costs is get to a situation where interest rates can start coming down. Now, if I wasn’t alarmed already, I was alarmed after hearing your interview a short time ago with the ACTU President, Michelle O’Neill, because what she was pointing to was not only the fact that we have those question marks over the budget strategy, but the unions signalling that they’re going after wages. If we have those two things pushing together, it’s going to be even harder again to get interest rates going down. So I think that’s a real warning bell for business and for the Australian economy.

Peter Stefanovic: If she did say this was good for wages, but long term what the businesses don’t make it and they can’t afford to pay them, is that the line that you are taking?

Andrew McKellar: Well, absolutely, and the one word that seems to escape the union movement is productivity. That’s one of the things that we are looking for in the overall strategy. We didn’t see a lot of that last night, and I think really here it’s about how do we free up that opportunity to make Australian business much more competitive? We’ve got to invest in innovation, we’ve got to invest in skills. We’ve got to be making our markets more competitive. If we’re not doing that, then we’re not going to see those benefits.

Peter Stefanovic: Are they not doing that with the longer term plans future made in Australia with its tax breaks, housing plans? Can they be success stories?

Andrew McKellar: I think it’s an interesting strategy and of course we keep an open mind on that. The concern I would have is, whilst it’s been much vaunted, when you look at the detail and there’s a list of different measures there, as long as your arm, it adds up to $22.7 billion over 10 years. In practical terms, I’m not sure that that’s enough to shift the needle. I don’t think it’s a huge risk, but at the same time, I’m not sure that it’s going to be enough to really drive that sort of new investment.

Peter Stefanovic: What about these energy rebates, Andrew? Not just for households, but businesses too?

Andrew McKellar: They are welcome of course. I think there are many businesses and many households who are struggling with those higher costs. Absolutely. Look, we want to see a fundamental energy market reform, and the government last week announced its future gas strategy. That was a step in the right direction because gas is an important part of that energy transition. So I think with bigger picture items like that, business is more confident.

Peter Stefanovic: Is that inflationary? Just to wrap up.

Andrew McKellar: Look, it’s not inflationary. The energy bill relief will obviously detract from the headline CPI. Does it do anything for underlying inflation? I think that’s the real question and I’m not convinced that it does a whole lot in that area.

Peter Stefanovic: Good to see you, Andrew. We’ll talk to you soon.

Response to ACTU’s minimum wage submission

ABC News Breakfast, Tuesday 26 March 2024

E&OE

Emma Rebellato: Andrew McKellar joins us from Sydney. Andrew, thanks for joining us this morning.

Andrew McKellar: Good morning, Emma. Great to be with you.

Rebellato: What’s your submission to the Fair Work Commission? What increase would you be happy with and the business sector?

McKellar: What we’ve said is we think an increase of not more than 2 per cent is justified and look at the things that we put behind that. On the one point we have just released yesterday, our Westpac Industrial Trends Survey, it does show that in the March quarter, business conditions have weakened significantly. We’re seeing orders dropping away, we’re seeing investment going sideways. We’re seeing capacity utilisation down, and most importantly, we’re starting to see that employment and hiring decisions dropping off as well. And I think this is the real concern. We don’t want to see employment going backwards. We don’t want to see unemployment rising at this point in time. We want to keep Australia at or near full employment for as long as possible. Now, beyond that, we are seeing inflation also falling away. It’s at 4.1 per cent in the December quarter. We expect that it will drop further in the March quarter. Productivity has been extremely weak over the past 12 months. In fact, if you look at the national accounts, it’s gone backwards when you add all of that up. When you look at what the Fair Work Commission granted last year, an 8.6 per cent increase, well above inflation, and also the fact that there are other cost of living relief measures in place and coming into place from mid-year, we think that an outcome of 2 per cent will help inflation continue to fall and will take the pressure off interest rates more rapidly.

Rebellato: Andrew, the unions today has described your submission of 2 per cent as pretty sad and appalling, and the lowest paid workers will go back even further if they only get 2 per cent. How do you respond to that?

McKellar: I’d expect nothing different from the ACTU. Regrettably, they have learned very little in the past 12 months and they’ve remembered even less so. I think if you look at their submission of 5 per cent, I mean that is basically an open letter to the Governor of the Reserve Bank saying that they would be happy for interest rates to remain higher for longer. I did see some comments from one of the union leaders saying that business has the flexibility to put up prices. Well, that is to absorb the cost of higher wage increases. Now, that is basically, again, inviting or suggesting that inflation will continue to remain higher for longer. I can’t remember the last time that I heard an Australian union leader using the word productivity. They simply don’t have it in their vocabulary. And that’s the critical thing if we’re going to have higher wage increases.

Rebellato: Andrew, it sends you at odds with the federal government as well because the federal government is putting a submission that it thinks the wages should go up in line with inflation, which would be more than 2 per cent. Why has the government got it wrong?

McKellar: I think here again, a number of factors, at 3.5, 4 per cent. I think one of the things you’ve got to take into account is the fact that those economic conditions are coming off At the moment, productivity has been weak or negative, and if productivity has actually been going backwards, then that is another factor that the government really should be taking into account. Let’s see where the commission judges all of this over the coming months, and let’s see what the outcome is.

Rebellato: Andrew, if the commission comes back and sets the increase higher than 2 per cent, which is what you are calling for, what would be the outcome? How would businesses wear that?

McKellar: It will be very difficult for many businesses, particularly small and medium-sized businesses at the moment. They have been struggling with supply chain issues with cost pressures over many months. Now we’re starting to see that ease off a little bit, but wage pressures are still there, an average of around 4 per cent at the moment. If we were to push that up higher, then there’s no doubt that that would even more rapidly impact hiring decisions, and we are starting to see that. We’ve got to look beyond the labor force figures that came out just recently for February, a very strong employment result. But we think that’s distorted. We think that’s an aberration, and our concern is that we will see weaker employment in the months ahead.

Rebellato: We’ve got a little while to find out where the Fair Work Commission lands on this one. Andrew McKellar, thanks for joining us this morning.

McKellar: Thanks very much.

ACCI chief executive officer Andrew McKellar interview with Gary Adshead on 6PR

Topics: Industrial relations legislation; right to disconnect

 

E&OE

Gary Adshead: Let’s have a go now and have a chat to Andrew McKellar, the Chief Executive of the Australian Chamber of Commerce and Industry. Thanks for your time, Andrew.

Andrew McKellar: Thanks, Gary. Great to be with you.

Gary Adshead: Light touch legislation. Do you agree?

Andrew McKellar: Well, we don’t, and of course this has been really foisted upon the Parliament at the last minute. Literally this amendment, the legislation has only been available for people to scrutinise from late last night, early this morning. So this has been potentially put through the Parliament almost sight unseen. So no evidence, no case, has been put together. I mean if you’re listening the other day to Senator Jackie Lambie, she was saying in more than 10 years in the Australian Parliament, nobody, none of her constituents, no business, no employee had ever raised this issue with her. And I think she’s not alone in that boat. It just seems that this is a thought bubble that the Australian Greens have put together. And by this afternoon it could be the law of the land.

Even if what Barbara Pocock said there about for most employers, it’s not an issue for most employees, it’s not an issue. Any business now, when this becomes the law, is going to have to go through the red tape, the compliance to make sure that they’re abiding by this legislation. So the idea that this just doesn’t have any impact for most people, for most businesses, it’s not the case. When you create a law, business has an obligation to make sure they’re complying. And I think that’s red tape that many small businesses are going to have to struggle with.

Gary Adshead: And big businesses, because I’ll put it this way, I mean you hit the nail on the head there because all companies will have to look at whether they need to make sure that the people they’re signing up or have on their books are prepared to waive the right to disconnect. And I mean people in our industry, in journalism, broadcasting, I mean seriously? That I would not expect that sometimes I’m going to be called out of hours in relation to matters. I mean it’s a nonsense. So all companies are going to have to look at this and say, right, do I need to tell Bob that I need him to waive his right?

Andrew McKellar: That’s absolutely right. This is the thing. There is a compliance burden there. Every company, when you bring in legislation like this, you’ve got to look at your due diligence, you’ve got to make sure you’ve got the policies and procedures in place. It’s not light touch. At the end of this, there’s a prospect that this is going to get written into awards. That brings with it the risk of penalties if you aren’t complying. So there’s a potential financial cost at the end of all of this. So the idea that this is in some way, some sort of a light touch thing, it really is putting aside common sense. It means that we are trying to regulate in this space something that ought to be really applied as common sense. And in many cases, of course, businesses are doing this in their enterprise agreements but now have to go down this approach, it really is an overreach.

Gary Adshead: I mean there’ll be people, this won’t come across very well, but I’ll say it, there are plenty of workers out there that’ll be happy to game the system with this one as well. There are people out there that sort of make sure that they use their maximum number of sick days and so on. They can fudge it as much as they want and they will use this to do the same. No, no, I have a right to disconnect. Now, have you asked the Coalition whether they’ll wind this back?

Andrew McKellar: Well, look, we’re having discussions with the Coalition. We’re having discussions with the cross-bench senators, obviously. I think the Opposition has made it very clear they don’t support this. They are concerned by it. Of course, if this goes through as legislation, as we expect there’s now a deal on it, then ultimately it’s going to be up to future governments, future parliaments to see whether this is working, whether it’s necessary or not. Unfortunately, in the short term, the government seems to have the numbers. And from this afternoon, this very well could be the law of the land. And that’s what we’ve got to deal with.

Gary Adshead: And the other point, if we just talk about it in a sort of a holistic way, people who want to get ahead in the world, they’ll do those sort of things outside of the normal working hours because they’re trying to impress, set an example. And they’re trying to show that they’re prepared to go above and beyond. I mean is that no longer the sentiment here, Australia, it’s like, do as little as you can and that’s enough?

Andrew McKellar: Well, it seems to be very much the approach that the Greens are seeking to push on business, on employees here. And of course you’re right. I mean many people are flexible. We are looking to try and provide more flexibility in the way we work. I think it’s come out of the pandemic. We have all of this talk now about not necessarily having people in the office every day of the week or in the workplace every day of the week. We recognise that people have family commitments. They may have a tradesperson coming to their house, they’ll come in late today, they’ll work a bit longer later on. Are we going to put all of that aside because of this sort of silly legislation, which honestly is just a complete breach of common sense.

Gary Adshead: Maybe there’ll be people that are working from home that will exercise their right to disconnect as well. Alright, well we’ll wait and see how it plays out. I appreciate you joining us.

Progress towards net-zero welcomed

Progress towards net-zero welcomed

Progress by the government in developing its plan to achieve net-zero emissions will bring further certainty for business.

“Australia’s industries need to stay competitive and drive economic growth while cutting carbon emissions,” ACCI chief executive Andrew McKellar said.

“Net-zero by 2050 an ambitious target which brings enormous opportunities for investment in a successful transition to more sustainable energy sources. Australia can be a leader in this space.

“Each sector plan must take a comprehensive and realistic approach to decarbonisation with clear milestones to measure progress. The additional level of detail will assist in providing greater vision and certainty to business.”

“ACCI has been advocating for a clear roadmap to achieving net-zero, so we welcome today’s announcement from the government, and look forward to representing our members in their development.”