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.”

Business welcomes new Fair Work Ombudsman

Business welcomes new Fair Work Ombudsman

Australia’s largest and most representative business network has welcomed the appointment of Anna Booth as Fair Work Ombudsman.

“ACCI congratulates Anna Booth on her appointment as the Fair Work Ombudsman and believe her rich experience will contribute positively to the workplace relations landscape in Australia,” ACCI chief executive Andrew McKellar said.

“Each interaction that we have had with Anna Booth has demonstrated her deep understanding of the industrial relations framework. Most recently this has included her involvement in the ongoing review of regulations surrounding registered organisations.”

As a former deputy president of the Fair Work Commission, Anna Booth brings a wealth of knowledge and understanding to this crucial role.

“ACCI remains committed to working collaboratively with the Fair Work Ombudsman and the federal government to achieve a robust and harmonious workplace relations environment,” Mr McKellar said.

“Anna Booth’s appointment presents an opportunity for ongoing constructive engagement with the Fair Work Ombudsman. As a priority, ACCI will continue to look for opportunities to assist members in promoting compliance through education.”

ACCI has also paid tribute to the outgoing Fair Work Ombudsman, Sandra Parker PSM.

“Sandra Parker has displayed exemplary service and dedication. She appreciated the importance of engaging constructively with employers and employees, and ACCI wishes her well for future endeavours,” Mr McKellar said.

Rates hold a partial release of the pressure valve for small business

Rates hold a partial release of the pressure valve for small business

Small and family businesses have received a welcome reprieve from the Reserve Bank’s aggressive monetary tightening campaign following today’s decision to hold the cash rate at 4.1 per cent.

Despite the decision to hold steady, the bank has signalled that it may continue to squeeze Australia’s economy further as it works to bring persistently high inflation under control.

“The RBA’s decision to leave the cash rate on hold will act as a partial release of the pressure valve for Australia’s 2.4 million small businesses,” ACCI chief executive Andrew McKellar said.

“The Reserve Bank has rightly kept the cash rate steady, giving it more time to assess the impact of its efforts to dampen economic activity.

“After experiencing 12 interest rate increases, declining consumer spending, and a surge in input costs, small and family businesses are being brought to their knees.

“To add to the pain, many struggling small businesses have seen their wages bill soar from July 1 as the annual wage review and increase to the superannuation guarantee have taken effect.

“While wages growth across the board remains within the central bank’s target range, the risk is that the Fair Work Commission’s determination becomes a floor for wage negotiations across the economy, thus unlocking the floodgates to deep and prolonged economic pain.”

The latest consumer price index data, released last week, revealed a significant deceleration in annual inflation despite the continuation of persistent price pressures in many sectors. Similarly, while the labour market has lost some momentum, it remains incredibly tight.

“Inflation is clearly easing, but much more progress will be needed to bring core inflation to levels that align with the Reserve Bank’s broader target range,” Mr McKellar added.

“To help curb inflation, continued discipline on public spending and tax policy from federal and state governments is required.

Inflation retreat will bring some comfort to small business

Inflation retreat will bring some comfort to small business

Fresh inflation numbers released today will offer some consolation to Australia’s 2.4 million small business owners, many of whom are nearing breaking point as price pressures and elevated interest rates increase the risk of further economic pain.

“After experiencing 12 interest rate increases, declining consumer spending, and a surge in input costs, it’s good news for small businesses that inflation is returning to its downward trend,” ACCI chief of policy and advocacy David Alexander said.

“As supply chain bottlenecks ease, small businesses have experienced a decline in petrol prices while material costs have also steadily decreased from previously high levels.

“Despite this welcome progress, the expected inflation-chasing wages hike from July 1 will heap even more pressure on small businesses when they can least afford it.

“Many small businesses are seeing their costs rise to the point where they have no choice but to increase their prices to maintain operations.

“With further disruption on the horizon as the federal government pursues retrograde changes to the industrial relations system, small businesses across the country are questioning why laws that will make it harder to create new jobs and grow the economy are needed.

“At its meeting next week, the Reserve Bank should take stock of whether rates are sufficiently restrictive to bring inflation back to target.

Manufacturing outlook sours as cost crisis continues

Industry sentiment is darkening as local manufacturing stalls amid a broader economic slowdown and an ongoing cost crisis, the latest ACCI-Westpac Industrial Trends Survey has found.

Westpac chief economist Bill Evans said that the manufacturing sector is experiencing a damaging slowdown in activity. This is being compounded by elevated costs and persistent headwinds from the availability of labour and materials.

Margins are being squeezed with only a partial pass-through of spiralling input costs to manufacturers’ prices. Despite the highest proportion of firms since 1988 lifting their prices to protect margins, selling price increases continue to trail the surge in average costs.

“The Westpac-ACCI Actual Composite weakened in the latest survey, down from 53.9 in March to 50.7 in June.

“A reading around the break-even mark of 50 indicates that conditions within the manufacturing sector are stalling. The survey reported broadly flat new orders and employment, a decline in overtime and a slowing in output growth.

“The fading of earlier tailwinds and rising interest rates are contributing to a downbeat outlook for demand, while labour shortages and cost pressures persist.”

“The Expected Composite rose slightly to 52.6 in June, but follows 51.2 in March, which was the softest reading since 2014, outside of the pandemic-era lows during 2020.

“Notably, the general business mood has become extremely pessimistic with a net 32 per cent of respondents now expecting the business situation to worsen over the next six months. That eclipses the lows seen during the pandemic and is the weakest reading since the Global Financial Crisis.

“Businesses report that the economic outlook remains bleak, as interest rates continue to rise; high inflation reduces real household incomes and margins are squeezed. Conditions in the manufacturing sector are likely to deteriorate further over the period ahead.

“The bounce in new orders in March proved to be temporary, with a net 1 per cent of respondents reporting a decline in June, as demand stalls. Expectations remain subdued, with only a net 7 per cent of respondents anticipating a rise next quarter, down from an average of 34 per cent over 2021 and 2022.

“The survey reports there has been barely any let-up in the cost crisis facing manufacturers. This extended period of elevated costs, associated with labour and material shortages, and surging energy costs, must be threatening the viability of some businesses.

“Labour shortages remain intense but have eased somewhat over recent quarters. A net 50.8 per cent of respondents indicated that labour was “harder to find”, still very elevated but down from the series high of 65.8 per cent last September.

“Despite the bleak assessment, manufacturers remain intent on lifting investment. A net 29 per cent plan to increase spending on equipment. That is broadly in line with the highs seen when Australia was first emerging from COVID lockdowns. While this promises to address some of the pressures around capacity and rising labour costs, plans may go on hold if conditions deteriorate further.

ACCI chief of policy and advocacy, David Alexander, cautioned that manufacturers’ viability would be tested in the coming months as significant headwinds constrained profitability.

“The survey makes clear that there is little respite for local industry as profit margins continue to be squeezed tighter and tighter,” Mr Alexander said.

“Manufacturers are by no means immune from the cost pressures that are also battering Australian households – two thirds of firms experienced increasing material costs in the last quarter. At the same time almost 50 per cent of firms expect their wages bill to rise by the end of 2023.

“Profit expectations have plummeted to pessimistic levels, weaker reads in the past only observed during major economic disruptions such as the COVID pandemic, the GFC, and the recession of the early-90s.”

“The pressure on profit margins persists as businesses are unable to pass through costs to higher prices. While some firms have raised prices to maintain their profitability, these increases lag well behind the rise in input costs.

“Encouragingly, investment intentions have defied deteriorating conditions. However, with the government’s temporary full expensing measure set to end and the possibility of further interest rate rises on the horizon, firms’ investment plans may be disrupted,” Mr Alexander noted.

Read the full report here

The ACCI-Westpac Survey of Industrial Trends, Australia’s longest running business survey, dating from 1966, provides a timely update on manufacturing and insights into economy-wide trends.