The Business Council of Australia is turning 21 and all in all the
Australian business world is a very different place to the one which
saw the BCA’s creation.
It’s a big year for the Business Council. Australia’s top Bosses group
turns 21. In older days when a person turned 21, they were given the
‘key’ to life by parents grateful to have successful raised their child
to this stage.

With 21 years under its belt, where’s the BCA’s key to its future life?
Except for the incumbent President, Hugh Morgan, the parents have all
gone out to pasture and there are signs it’s a case of ‘Back to Future’
in policies as it searches for a reason to continue.

Some would argue that with Morgan at the top, stewardship of the Big
End of town in Australia has rightfully returned to Melbourne and the
‘real’ business leaders of the country: just as it was 21 years ago
when Morgan’s mentor, the impressive, but deeply conservative Sir Arvi
Parbo held sway.

A certain symmetry one could argue. But one could also argue that with
Melbourne being a distinct second to Sydney in national importance,
there’s a feeling that the BCA and the Victorian capital belong

But it’s also a fact that the Sydney-based heads of the BCA (such as
Ian Salmon, former CEO of the AMP and John Schubert, ex-Esso Australia
and Pioneer (now Hanson) have been less successful compared to Parbo
and others (Brian Loton, Sir Rod Carnegie) and less impressive.

Many in business argue that the BCA’s influenced noticeably waned in
the mid 90’s around the time of Ian Salmon’s time as President, while
John Schubert’s tenure was marked by confusion and a tendency of the
Howard Government, and especially Prime Minister Howard (Sydney) to
ignore the Council and concentrate on small and medium business groups.

In the period 1983-2004 the Australian business landscape has changed
dramatically. Tariffs and industry protection is no longer a first
order issue, the exchange rate has disappeared with the floating of the
currency by the Hawke Government, free trade is sort of bi-partisan
(except for the offensive Free Trade Agreement proposed with the US),
especially the issue of Closer Economic Relations with New Zealand.

Industrial relations has all but disappeared as a first order issue
with average weekly wages under control, industrial disputes low and
not an irritant, while interest rates are at 30 year lows and inflation
is not an issue at all.

On issues such as corporate governance, executive pay and increased
transparency and improved accounting rules however, it’s a different

Not first order issues in the 80s they now occupy more and more time for business, politicians and support groups.

Superannuation, first introduced in late 1983 and early 1984 as a
backdoor way to lift wage rates, has grown dramatically from its
Industry-union start (which was bitterly opposed by the BCA and its
member companies.)

Now there is sort of agreement there are not enough superannuation
savings (although the BCA doesn’t want industry to pay more). The
Federal Government is accused, rightly, of exploiting the system for
its own revenue purposes by taxing super three times (that was started
by the Labor Government).

The BCA cannot bring itself to criticise many of its members for their
outrageous fees and charges in super, and cannot understand why there
has been an upsurge and shareholder activism (which they had warned in
the 80s, would flow from the growth in industry-union based super

In fact these industry funds are the leaders in keeping the BCA’s
members ‘honest’ (such as the AMP, the big Banks in the Commonwealth,
the NAB, the ANZ and Westpac) on fees and charges and out perform these
supposed bastions of Australian-style capitalism.

And, remember the argument about the looming ‘branch office’ economy
from the BCA and many of its leaders: led by president, John Schubert
and with help from some in the media. Had nothing to do with the low
value of the Australian dollar and the silly, high value of the US
dollar did it? Which made our assets cheap and attractive. Witness the
BHP Billiton and RTZ-CRA fandangos.

No-one hears the ‘branch office’ argument now the Australian dollar is
well above 70US cents? Which says something about the validity of the
original argument. (And we can also mention the rubbish about the
tech boom and how we were falling behind. Those claims have now
disappeared as well).

Competition policy has been enforced, and even though the dreaded Alan
Fels has gone off to be an academic and part time media commentator,
his successor at the ACCC in Graeme Samuel is not considered ‘safe’ by
his fellow Melburniens in the ‘club’.

All in all a very different world for business in this country now.

But look at the BCA’s policy smorgasbord revealed in the past week or
so: tax, industrial relations, superannuation, competition policy,
echoes of now, but in reality, lipservice.

More a replay of 1983-85 as big business started coming to terms with
the Hawke Labor Government and sort to influence it (little did they
know that business would get what it wanted and more as Hawke and
Keating and other forward thinking ministers took the sort of policy
moves that would cause considerable hurt, but laid the ground for the
better conditions we’ve been experiencing over the past eight years).

Twenty-one years on and the same old collection of ideas are trotted
out from the business lobby, aimed (I think) at a new Labor Government.

It’s as though the BCA is having a good bet that Iron Mark’s gang will
turf Little Johnnie from Government later this year. You couldn’t
imagine the BCA getting up and pushing industrial relations (even when
mad Tony Rabbot was running Industrial Relations before his move to try
and staunch the disaster in health).

Nor could you imagine the BCA pushing a Sustainable Business policy
when John Howard has ignored the environment all his life, while
Education, Skills and Innovation is another policy area that the BCA
would have great trouble in getting anyone in the Howard Government
paying attention to, given the damage done to education at all levels
since 1996, especially by Brendan Nelson.

And finally, the policy area of “Business Reform” surely doesn’t
include such interesting topics, as greater shareholder participation,
improved reporting of executive salaries and more powers to ASIC and
the ACCC, does it? Of course not.

These new policy areas all seem to have a defensive tone to them, in
case Iron Mark and his mob wins. All these policy ideas can be revved
up to defend the status quo (especially in Industrial Relations and
competition policy), rather than push them forward as things to do and
ideas to debate.

Last week, the BCA published its “Framework for Long-Term Policy
Action”… the so-called Aspire Australia 2025: a set of three
scenarios so beloved of the BCA. “Reform fatigue” and “loss of faith in
institutions” are just a couple of the key phrases trotted out.

Should we take any notice of these and the BCA generally.

Well consider this: big issues for many people in this country in the
past five years have been corporate excess, corporate collapses, the
explosion in corporate remuneration, especially on boards and in senior
management: and how managers, who love to talk about ‘paying for
performance’ have managed to be rewarded for failing.

So earlier this month, guess where Hugh Morgan and the other lads from
the BCA were? In Canberra before a Senate Committee, arguing that
the disclosure of corporate salary packages and other forms of
remuneration were bad because it inflated corporate salaries generally.
The answer was less disclosure.

Do I smell a usual whiff of hypocrisy here, or is it “reform fatigue”
or a ‘loss of faith’ emerging within the BCA has they try to do the
impossible and reverse the trend of greater disclosure at the top of
the corporate tree.

(Hmmm, has this policy stance anything to do with the fact that the BCA
is made up of the CEOs of the 80 leading companies-local and foreign-
in this country. Do I detect a collectivist rejection of something
close to the bank balances of the 80 CEOs? Well, frankly, yes!)

And, finally look at the Presidency of the BCA: the last two Presidents
have been former CEOs in John Schubert and now Hugh Morgan. That is not
the way it was originally envisaged when it was formed. The leader was
to be a serving CEO because it was felt they were closer to what was
going on in the economy everyday.

John Schubert tried, but was out of his depth with the Howard Government when a more skilled political approach was needed.

Hugh Morgan is now longer the ‘firebrand’ he was in the eighties on
lots of issues: he is removed from everyday business life and he has a
Melbourne style of doing things which is unsuited to an Australia which
is more aligned along the Sydney-Brisbane-Perth-Darwin way of doing
business, living life and looking out at the rest of the world.

The BCA was the most effective lobby group (even better than the ACTU
under Bill Kelty) because its arguments and policies became, within a
decade, part of the political fabric of this country. For that we all
owe the early leaders (and people like Geoff Allen) a deal of thanks.
The BCA was at first ahead of its time, then of its time in the golden
period 1983-1993.

The regimes of firstly Paul Keating, and then John Howard (both of whom
were not sympathetic to Big Business and their ideas) saw the BCA’s
influence wither, and it has accentuated this slide with its policy
ideas of defending the lurks and perks of business.

Now, with Hugh Morgan in charge, there’s a suggestion of re-visiting
the glory days. Mr Morgan sounds and looks like a man from the past.

He is one of the few business managers to have survived the last 20
years in this country around the top of the greasy pole; thanks to
mentors like Sir Arvi Pabo and Ray Evans (who fired most of the shots
for Morgan’s H.R. Nicholls assaults on a range of right wing targets).

That was striking in his appearance on the ABC Inside Business a couple
of week ago: For all the relevance of the Council’s new policy ideas,
Morgan was most uncertain and highly defensive on the big business
issues at the moment: corporate pay, board responsibility, transparency
and disclosure. Host Alan Kohler quite nicely brought out this
defensive side with some telling jabs. Morgan obliged with a sliding
defensive, but the footwork, but couldn’t disguise his discomfort.

And there’s the dilemma: in its early days the BCA lit the fuse on a
number of issues: remember the halcyon days of the Bob Hawke’s Summit
(when we nearly had a GST). Now its reduced to fighting fires and
defending its members against rising community expectations for better
accountability, for pay to really match performance (and
under-performance) and for greater disclosure and transparency.

Its central problem, then and now was outlined back in 1993, by Sir Avi
at the dinner marking the Council’s tenth anniversary. He said, in
proposing a toast “we have so far not been able to extend our broader
message to ordinary Australians”.

Well, Sir Avi, that was an unrealistic expectation. The BCA succeeded
in what it was set up to do. It just failed to build on that success
and move forward.

Now the BCA is just another lobby group, with a marginal profile – just
like its opponent of the 80s, the Australian Council of Trade Unions.
Remember them?