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LEADERSHIP: With trust in Australian institutions at an all-time low, the industry group representing the nation’s top businesses says business needs to embark on a campaign to help communities understand how issues like tax reform and cutting red tape directly impacts them.
The key message I learned from the US is that tax is a local issue for people and we’ve got to make our growth and business stories local.
Business Council of Australia chief executive Jennifer Westacott says Australia’s political culture is not capable of wide-sweeping reforms but even smaller steps were vital as the nation becomes uncompetitive internationally. Westacott recently returned from a trip to Washington where she says she learned the United States government is not just making significant progress on tax reform and reducing regulation but also on how they communicate those reforms to the grass roots.
Westacott says our tax reform and regulation agendas need to be put into the bigger story but first we need to address key issues. “We run the risk of having companies decide that they are not going to invest in Australia and that the US and other places are a more attractive destination than we are,” she says. “We are a capital dependent economy, we rely on the import of capital, we rely on foreign investment and so that presents great opportunities for the US and great risks for us if we don’t try and keep up.”
She says in a period of slower growth there are very serious implications for jobs, wages and living standards.
“We’ve got to generate some investment in business, it’s the lowest since 1994 as a percentage of GDP,” she says.
“That was when we were in a recession. We’ve got to generate investment into sectors where we have a competitive advantage, in particular agriculture and mining. We have got to be able to enter new markets and increase our productivity. The only way to increase our productivity is through investment and innovation. That is the only way it will flow through to wages.
Many Australians are feeling very anxious and frustrated about their job and wages.”
Westacott says business and rebuilding trust in institutions is a listening, communications and reputation exercise. She says the BCA is urging companies to tackle reputation issues such as large companies paying small business suppliers on time, and challenging the perception that companies don’t pay enough tax.
“Australian companies pay an enormous amount of tax, the second highest tax rate as a percentage of GDP in the OECD,” she says. “But we do need companies to be transparent about their tax arrangements.”
Westacott says the business community “owns” the transition that is taking place in Australian workplaces that is seeing many jobs being replaced with technology and disruption of industries. “We can’t leave that to government to fix,” she says. “These things are not going to be stopped but we can plan for them and we can mitigate the impact on people and communities. We should, as the business community, take a lead role and be clear and honest with people about what is going to happen and I think that will build a lot of trust.”
The BCA has come under fire itself in recent years for not being vocal enough to push the agenda for business. Westacott says the organisation is investing in an increased social media campaign. “Increasingly we have to go harder and harder on social media, reach communities and make this story local for people,” she says. “That’s the key message I learned from the US - that tax is a local issue for people and we’ve got to make our growth and business stories local and make it clear that the benefits of getting a more competitive economy is the best way that we can shore up regional communities. That way we can shore up the jobs of the future, create new businesses and ensure better living standards for people.”
Westacott says business needs to make this a story that is personal to people, “because it is”. “If we don’t do that the consequences are less jobs, lower paid jobs and of course the hollowing out of jobs.”
The Press is a publication by PwC Australia, aimed at sharing expertise,capturing insights and working together to solve important problems.
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This article first appeared in Edition 3 of The Press
By Lucille Keen, Senior Reporter, The Press
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