Aussie CEOs’ memo to PM on energy, climate change
The CEOs of six Australian businesses and business groups have a message for newly-elected Prime Minister Scott Morrison which involves a careful balance between climate change and energy costs.
The Liberal Government must strike a balance between caring for the environment and ensuring energy prices remain affordable, so businesses around the country can prosper into the future, leaders agree.
Stable government for the next three years and a focus on reinvigorating enterprise bargaining so agreements deliver productivity wins are also top priorities for business leaders.
News Corp Australia spoke to the heads of six Australian businesses and business groups and was told while most companies wanted to see action on climate change to preserve the environment for future generations, they needed this to happen in a measured way which did not blow out already exorbitant power and gas bills.
Scott Morrison remaining at the helm of the Liberal Party for a full term was also critical, as government stability boosted consumer confidence and encouraged Australians to spend money, buoying business in general and in particular, the retail sector.
ENERGY COSTS VS CLIMATE CHANGE
Australian Chamber of Commerce chief executive officer James Pearson said "getting power prices down and keeping them down", was one of Scott Morrison's biggest challenges in supporting big Australian businesses.
It's a call echoed by executive director of the Australian Retailers' Association Russell Zimmerman, who said every business he had spoken to, of every size, over the last couple of years had struggled to cope with rising energy costs.
Even getting power had been a battle for businesses in some states, Mr Zimmerman said.
"From the perspective of Australian retailers, we agree that we don't want to leave an environment our children and grandchildren can't live with, but what we do want to see are some sensible outcomes in relation to energy costs," Mr Zimmerman said.
"Retailers are looking to understand what their energy costs are going to be, because over the last couple of years there's been an incredible hit to every retailer in Australia with their energy costs.
"Every retailer I speak to, big or small, tells me that one of their main concerns is the incredible cost of energy. They are going to be looking for stability in energy. Ensuring they've got power, that's the first thing.
"There's been states, as we well know, that have struggled with power supply, so making sure there is power is vital, but it has to be at a reasonable cost. I'll put it bluntly, I think we need to see a balance in how power is produced to ensure the cost of it is within the realm of what retailers can afford because that's a huge issue for them."
Chief Executive of the Australian Industry Group Innes Willox said action had to be taken to reduce greenhouse gas emissions but it needed to be done in a way which did not weaken the economy.
The new Liberal government needed to focus on "building a convincing and bipartisan approach to energy system design and regulation that underwrites the long-term investment in electricity generation and domestic gas supply", he said. "(We need to) refine our approach to climate policy so we are equipped to make our contribution to the global challenge of reducing greenhouse gas emissions in ways that do not undermine the strength of the domestic economy."
Business Council of Australia chief executive Jennifer Westacott said "sensible solutions" to driving down energy prices and dealing with climate change, were needed and CEO of MYOB Tim Reed stressed a long-term plan that delivered both lower emissions and energy costs was urgently needed.
"This is achievable, but requires policy certainty. This will require a new form of leadership and bipartisan collaboration which has been absent in the past 10 years," Mr Reed said.
STABILITY IN GOVERNMENT
For Peter Allen, the CEO of Australian retail and property giant Scentre Group - the company behind Westfield shopping centres - stable government is all-important.
"Certainty of leadership is critical for consumer confidence and business investment. I hope the new Government remains focused on long-term fiscal management of the country so we continue to attract investment, remain competitive and develop the skills and capabilities we need to enable this," Mr Allen said.
He added immigration was a key driver of Australia's economic growth and competitiveness.
Ending the revolving door of Australian prime ministers and keeping the same leader for a whole term is also the great hope of associations representing big business and the retail sector.
The Australian Retailers' Association's Russell Zimmerman said lack of stability in government over the last few years had eroded consumer and business confidence.
"It's vital there is stability in government because the instability of government has caused the lack of confidence in the industry. Morrison has now made changes to the rules, so as to make it very unlikely that we are going to see a change of Prime Minister over the next three years. It's a good thing to see stability and I think the retail community in general will welcome that."
"Retailers will be looking for stability within the employment relations sector and will certainly be wanting to look at how they can engage with Government and the unions to build enterprise agreements, because at the end of the day enterprise agreements tend to focus on getting wages growth out there, so that's going to be very important for the Government to look at," the Australian Retailers' Association's Russell Zimmerman said.
The Australian Industry Group's Innes Willox said higher rates of productivity growth were required to grow national wealth while delivering stronger real wage increases.
"The main policy priorities are to repair and rejuvenate our approach to Vocational Education and Training systems including for apprenticeships and traineeships (and) to reinvigorate enterprise bargaining so that agreements deliver genuine organisation-level productivity wins and, critically, are approved promptly," he said.
STOP HATING ON BIG BUSINESS
"There is a pressing need to end the rhetoric from some quarters that pitches small business against big business and paints big business as a villain," believes Australian Chamber CEO, James Pearson.
"Business is business - and both small, medium and big business need each other to thrive. Business employs over 80 per cent of working Australians. We all need business to succeed. In order to achieve this, Australia needs to be the best place in the world to do business, for Australians to have the jobs, living standards and opportunities to which they aspire."
Business Council chief executive Jennifer Westacott said Australians wanted a united country.
"Now is the time to end the anti-business rhetoric and do all we can to ensure that all Australians, particularly those in the regions, have the opportunity to get ahead," she said.
STRONG ECONOMY AND HEALTHY BUDGET
Australian Chamber of Commerce CEO James Pearson said the Federal Government and parliament had a responsibility to improve the productive capacity of the economy and Australia's international competitiveness, as well as to strengthen the country's ability to withstand external economic shocks.
"We need to create a competitive environment for business in an economy that is strong, growing and resilient. This will need to be achieved despite the possible, even likely, headwinds of a downturn in global economic conditions and the current uncertainty created through the trade war between China and the US," Mr Pearson said.
"This uncertainty makes it is even more important to stick to a strong plan of budget management - to keep spending under control and ensure that surplus is achieved in year one of the third term of this Government."
The Australian Industry Group's Innes Willox said addition to settling on a new and unified team, the overarching challenge for the re-elected Coalition Government was to get behind and deliver a policy agenda that would set the economy up for a strong future which delivered benefits broadly across the community and built social cohesion and confidence into the future.
"This requires staying the course on the fiscal consolidation needed to rebuild the buffers against adverse future shocks while giving renewed emphasis to lifting productivity," Mr Willox said.
Chief executive officer of MYOB Tim Reed said a major challenge for the new government would be company taxes.
"Australia has a very high company tax rate relative to our OECD competitors - businesses both big and small believe this level of taxation needs to be lowered for all businesses for Australia to remain competitive. In a world of accelerating technological change where the need for investment in new ways of working is high, this need is greater than ever before. This will be a challenge for the government as they have no mandate in this area," Mr Reed said.
Mr Willox from the Industry Group said Mr Morrison's Government needed to 'reopen the tax policy conversation' about how Australia, as a nation, could modernise taxation systems to meet competitiveness and fairness objectives.