by Ashley Gardiner | May 15, 2024 | News, Transcripts
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.
by Ashley Gardiner | Mar 26, 2024 | Transcripts
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.
by Ashley Gardiner | Feb 8, 2024 | Transcripts
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.
by Ashley Gardiner | May 17, 2023 | Transcripts
Event: Opening statement to the Fair Work Commission annual wage review hearing.
Speaker: Peter Grist, principal economist, Australian Chamber of Commerce and Industry.
Date: 17 May 2023.
Topics: Award and minimum wages, inflation, wages growth, interest rates, business profits, productivity.
E&OE
As with recent reviews, the panel is again in an unenviable situation – facing a number of complex challenges, from slowing economic activity, high inflation, and continuing labour and skill shortages.
Now is not the time to be making bold decisions. ACCI stresses that genuine caution and moderation is warranted in setting the minimum and award minimum wages in this review.
I would like the opportunity to focus on three factors pertinent to the panel’s deliberation for this year’s annual wage review: inflation, business profits and productivity.
Inflation
There is an urgent need to get on top of inflation and quickly return it to the Reserve Bank’s target range of 2 to 3 per cent, so as not to extend the pain on Australian households and businesses any longer than is absolutely necessary.
The threat of inflation remaining elevated due to significant increases in wages has been highlighted by the Reserve Bank governor. In voicing his concerns about inflationary impacts of substantial wages growth, Dr Lowe noted a 3.5 per cent increase in wages was a good anchoring point. And: “… if wage increases become common in the 4 and 5 per cent range, it’s going to be harder to return inflation to 2.5 per cent”.
Therefore, it is important that a coordinated, whole-economy effort is made in returning inflation to the target band of 2 to 3 per cent.
Business profits
There has been much debate over corporate profits in recent months, but it is important to place this in context.
High global commodity prices stemming from the war in Ukraine have driven prices of iron ore, gas and coal to extraordinary highs, delivering the mining sector substantial profits in 2022.
Yet, it must be remembered that in the mining sector, only 1.1 per cent of the workforce is award-reliant. For this review, it is important to focus on the profits of industry sectors with a high share of award-reliant employees such as accommodation and food services, administrative and support services, and retail trade. In contrast to the mining sector, profits in these service industries have been low in recent years, severely impacted by the COVID-19 disruptions.
Businesses in these sectors have little capacity to absorb a significant wage increase without being forced to raise prices.
Further, many stakeholders have claimed that businesses are increasing their margins to achieve extraordinarily high profits, and this has been a core driver of the recent surge in inflation.
Yet, this is not consistent with the data. Analysis by the Reserve Bank, in the May 2023 Statement on Monetary Policy, includes a section that explicitly addresses the question: “Have Business Profits Contributed to Inflation?”
This shows that, outside the mining sector, profit growth – particularly in service industries which have a high share of award-reliant employees – has been weak over the past two years and remains below pre-COVID levels. There is little evidence of a broad-based increase in domestic non-mining profit margins in Australia. The Reserve Bank analysis concludes that business profits are not contributing to inflation.
Productivity
Increases in real wages can only be sustained if they are linked to gains in labour productivity.
The recent Productivity Commission 5-year Productivity Inquiry Report highlights that labour productivity has slowed considerably in recent decades. In the decade to 2020, average annual labour productivity growth in Australia was the slowest in 60 years, falling to just 1.1 per cent. This compares to an average of 1.8 per cent per year over the 60 years to 2020.
Labour productivity has slowed even further due to the COVID-19 disruptions over the past three years, to average less than 1 per cent per year.
While ACCI agrees that labour productivity growth should be shared between the business owner and the employee, current labour productivity growth, averaging less than 1 per cent per year, does not support strong growth in wages.
In this annual wage review, the panel must take note of the weak productivity growth and avoid decoupling wages growth from genuine productivity improvements. Given the weakness in labour productivity, an oversized increase in minimum and modern award wages cannot be justified.
ACCI’s position
ACCI supports a fair, reasonable and responsible increase in minimum and award minimum wages in 2023. We recognise that households are experiencing increasing pressures from high inflation. But it is impacting just as heavily on businesses by raising operating costs.
In making its decision, the expert panel needs to be aware of what is affordable and what is not. If the wage increase exceeds the moderate levels that balance what businesses can afford and community expectations, jobs and businesses will be lost.
ACCI supports an increase in minimum and modern award wages of up to 4 per cent (3.5 per cent plus the legislated 0.5 per cent increase in the Superannuation Guarantee) in 2023-24. We consider this to be both fair, reasonable and responsible in the current economic circumstances.
Our position is focused on containing inflation and returning it to the middle of Reserve Bank’s target range of 2 to 3 per cent as quickly as possible, as well as providing a reasonable allowance for workers to share the benefits of productivity growth, which as noted earlier is averaging less than 1 per cent per year.
We caution that any increase above 3.5 per cent plus the legislated 0.5 per cent superannuation guarantee increase would be irresponsible in the current economic environment.
Media contact:
Jack Quail | Media adviser
P | 02 6270 8020
E | media@acci.com.au
View PDF here.
by Alexa Gioffre | May 8, 2023 | Transcripts
Event: Andrew McKellar interview with Greg Jennett, ABC News Afternoon Briefing.
Speakers: Andrew McKellar, chief executive Australian Chamber of Commerce and Industry; Greg Jennett, host ABC News Afternoon Briefing.
Date: 8 May 2023
Topics: Federal budget 2023-24; energy price relief; inflation; interest rates; petroleum resource rent tax; budget repair; passenger movement charge; labour and skills shortages; Migration Review.
E&OE
Greg Jennett, host ABC News Afternoon Briefing: Well, outside of energy bill relief, it’s not apparent that there’s any large scale handout in store directly for business. Nor have the main big business lobby groups actually been asking for much either – they’ve read the signals from the Reserve Bank on inflation. Andrew McKellar is chief executive of the Chamber of Commerce and Industry and he’s explained why they’ve chosen a more restrained approach this year. Andrew McKellar, it’s budget eve, so you are back with us once again. Welcome to Afternoon Briefing, as always. Energy price relief, we’re told will be a centrepiece of the budget for households and for business. Is it clear to you how all this money, it could be about $3 billion state and federal, can be delivered in a way that is not inflationary.
Andrew McKellar, chief executive Australian Chamber of Commerce and Industry: Hi, Greg. Great to be with you. Look, any form of relief on energy prices for households and for small businesses particularly, it’s going to be welcome, that’s the first thing. How it will be delivered, I think here, one of the important things is it needs to be delivered in a way which doesn’t cut against what the Reserve Bank is doing with interest rates. So, if it’s adding back into demand, if it’s holding demand up for longer, if it’s adding to those inflationary pressures, then the risk is that we have fiscal policy pushing in one direction and monetary policy going the other way. We don’t want to see an outcome where there’s likely to be a reaction from the Reserve Bank to push interest rates higher again. That would obviously be very counterproductive.
Greg: And there are live risks here out there, on the demand side, not only just in demand for power, I suppose, but there are also schemes that create deductions for small business to go and invest in new kit or to better insulate their buildings for instance. That is all generating demand, isn’t it?
Andrew: Well, those things are very important, and the reason for that is at the moment, one of the biggest constraints the economy is facing is really on the supply side. So, I think anything here which focuses on adding to that supply, undertaking more investment, encouraging business to be more efficient, adding to productivity, then I think that is going to be consistent with the objective of keeping inflationary pressures in the economy lower. So, I think those sorts of things are very positive and constructive, and we would support them.
Greg: More broadly, because the word surplus keeps coming up, it’s very much in our expectations for the current financial year. Do you think the temptation to spend some of that does in fact do what you said shouldn’t happen? That fiscal policy might be pulling against monetary policy by the Reserve Bank?
Andrew: Well, again, I think here the government is going to have to get the balance right. So, it’s a wonderful thing if we are to go into surplus, and a lot of that is driven by windfall revenues that have come about as a result of much higher commodity prices. That’s great. What we’ve got to ensure is that as much as possible of that extra windfall is turned back into paying down debt. The projection over the life of the forward estimates is over $100 billion worth of interest payments are there. It’s moving up from about $20 billion a year. That’s a huge cost to the expense of other programs. We’ve got to reduce that if possible.
Greg: And that will be a wafer thin surplus anyway by all accounts.
Andrew: Absolutely.
Greg: Business appears to, on what we know already, be spared any large nasties. In view of the fact that this is a Labor government, do you think that would be a relatively painless outcome for business if it’s not going to be hit with new taxes?
Andrew: In advocating in front of this budget, we, amongst other business groups, I think have been very careful. We’re not saying that we want particular special programs. Our emphasis has been on recognising that the government needs to get the budget back into order. It needs to undertake that process over the medium term of budget repair. We’re supportive of that process. We say there’s a lot they can do on the expenditure side to achieve that discipline. We certainly don’t want to see new taxes or significantly increased taxes coming in as part of that strategy. If they can achieve that balance, then business will be very positive, will be very supportive.
Greg: There might be some things at the margins though. For instance, in the tourism sector, I think everyone’s on high alert for an increase in the departure tax, so-called, or passenger movement charge is its technical name. Is that fair enough in view of the large number of overseas trips that Australians are now taking after the pandemic?
Andrew: We are cautious about that as well. I mean, if there’s one sector that’s been absolutely pummelled in the past several years through the pandemic and through other economic circumstances, it’s been the tourism and the hospitality industry. So, I think we would be very cautious about any increase in that charge. The other thing here is this is not a general revenue charge. Any increase in the revenue should be fed back into the purposes that it’s intended for. It really should be about supporting more effective borders, the movement of people across those borders, and in particular, the industries that are linked to that, the tourism and hospitality industries.
Greg: Well, it could actually become an incentive for people to holiday at home, domestically, couldn’t it?
Andrew: Look, I think at the margins, Australia obviously needs to remain competitive. There needs to be a clear justification between what that charge is for and where that money’s been spent. And I think at the end of the day, that’s the test.
Greg: All right. At the other end, really big business and big investments, the petroleum resource rent tax for offshore gas primarily is going up. I don’t think that really speaks to your membership necessarily, but do you welcome that?
Andrew: Look, we’re cautious about it. So here, there’s been some consultations with the industry, with the major gas producers. I think in the main, this represents a pull forward to some degree of the revenues that might have been further down the track. That said, it’s essential in this space that what we’ve got to be encouraging is exploration and production of gas in Australia. It’s very clear we have a critical situation with energy supply at the moment. Gas is an important part of the solution to that for the foreseeable future. We’ve got to maintain and attract those major investment projects to keep that part of the energy equation going. It’s vitally important to business.
Greg: And just finally, Andrew McKellar, population growth can’t continue at the rate that it’s been running at in recent years. Do you accept that? And what implications are there on the skills and labour side for that?
Andrew: Well, I think here we’ve just seen the government produce a major migration review. It was a very constructive review, and one of the most important things coming out of that we hope we will be that the temporary skilled migration intake will be better focused in the future. If that means that we can be more effective about attracting and retaining people to fill critical skill shortages, then that will be a better result. So, we’re encouraged by that, and I think businesses are looking forward to working with government to get those outcomes in place.
Greg: Plenty to look out for come tomorrow night. No doubt we’ll get a readout from you before too long. Andrew McKellar, thanks again for joining us.
Andrew: Perfect. Thank you.
View PDF here.
by Ashley Gardiner | Mar 21, 2023 | News, Transcripts
Event: Andrew McKellar interview with Ross Greenwood, Sky News Business Now.
Speakers: Andrew McKellar, chief executive Australian Chamber of Commerce and Industry; Ross Greenwood, host Sky News Business Now.
Date: 21 March 2023.
Topics: ACCI-Westpac Industrial Trends Survey, interest rates, labour shortages, energy costs, next RBA rates decision, industrial relations changes.
E&OE
Ross Greenwood, host Sky News Business Now: Today, the index of the country’s longest-running business survey, that’s run by Westpac and the Australian Chamber of Commerce and Industry showed a little bit of an uptick in March, but it’s an uptick off a very low base. So, let’s bring in here Andrew McKellar, chief executive of the Chamber of Commerce and Industry. Andrew, always good to talk to you. It’s a sobering reality, just the challenges that face most Australian businesses right now.
Andrew McKellar, chief executive Australian Chamber of Commerce and Industry: Hi, Ross. That’s exactly right and, look, I’d summarise it by saying that the cost crisis continues. What the latest survey shows is that businesses really face a cocktail of higher inflation, they’re dealing with spiralling energy costs, they are dealing with continuing shortages in terms of labour supply. So look, it’s a difficult mix and I think as we look forward, the outlook, the level of pessimism in business about some of the challenges that they’re likely to face over the next one, two, three quarters really is, cause for concern.
Ross: Okay. So we’ve seen collapses in the construction industry. We’ve seen the same thing in the transport industry. And we understand what’s been seen publicly is only a glimpse of what’s happening at the lower end of many of those industries. Is the same fear there for our manufacturing industries, for many of our services industries as well?
Andrew: Well, it is, and I think particularly this survey reflects the situation facing manufacturing, so they are under pressure. Certainly, the outlook is not optimistic. I think one of the most worrying things here, Ross, is that in particular it’s around investments. So we are seeing the impact of higher interest rates coming through. We’re seeing the fact that margins are being squeezed. Businesses are facing significantly higher input costs. They can’t pass that fully through. And as a result, investment is being wound back. Now, that is not a good recipe if we’re going to build confident, productive, efficient, profitable companies for the future.
Ross: What about the Reserve Bank right now due to make another decision in just two weeks’ time? What about its role in the conditions that companies are currently facing?
Andrew: I do think here they’ve got to take stock. There are real concerns that over the next couple of months we could start to see some of the chickens come home to roost. We don’t want to see firms going to the wall as a result of the pressures of higher interest rates adding to what is already a pretty dangerous mix. I think it would be time for the Reserve Bank to take stock, to pause, not increase interest rates at its next meeting. If you put that back-to-back with what we’ve seen around the world in terms of some of the pressures that are emerging in financial markets over recent days, then really I think we would be urging caution ahead of that Reserve Bank meeting.
Ross: Is the federal government adding to that concern to the uncertainty by its industrial relations reforms, trying to consolidate some of those awards and the collective bargaining and then, on top of that, even in regard to the way in which businesses might even operate in the future?
Andrew: Look, I think that’s hard to say. I mean, there are things that the federal government can do here as it prepares the ground for its budget. It’s got some big challenges there. Of course, business has some concerns about the industrial relations reform agenda. We don’t think that the reforms that were passed late last year went in the right direction. Those haven’t really had effect yet, though most of them will come into effect in the second half of the year. There are more changes in the pipeline. We’re yet to see the detail, but obviously, these are issues. If we’re going to really address the productivity challenges, if we’re going to be able to sustain a strong labour market, keep the economy at or near full employment, then the way we take that forward with the future industrial relation changes, that will have an important impact.
Ross: Andrew McKellar, chief executive of the Chamber of Commerce and Industry, always good to chat to you. Many thanks for your time today.
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