Here’s something Federal Industry Minister Kim Carr needs to understand — when a business decides it’s time to go, there’s no point berating them or rashly and recklessly offering them suitcases of taxpayers’ dollars hoping to bribe them to stay.
This salutary lesson was brought home to me back in late 1995 when I was working for Tasmanian Premier Ray Groom. Facing a tough election only a few months hence, Groom received a visit from the head honchos of a subsidiary of British multinational ICI, who told him they were closing one of the biggest employers in the state’s North West Coast — a pigment plant in Burnie.
The air in the Premier’s office suddenly became heavy with tension as the ever polite Groom looked the ICI executives in the eye and told them in measured but firm tones that the closure could not have come at a worse time. That evening Groom spoke directly with the chairman of ICI, Sir Ronnie Hampel, in his London HQ. Hampel, who referred to Groom as the “Prime Minister of Tasmania”, wasn’t changing his mind. Groom wisely did not offer to throw scarce taxpayers’ dollars at ICI.
And why would he? Like Pacific Brands’ decision yesterday, ICI’s move to close its Burnie operation 14 years ago was not taken lightly. It represented for the company at the time the only rational decision that could be taken given the market conditions, the age of the plant and the cost of labour. Nothing the Tasmanian government, or indeed federal government at the time, could do would change that inevitable fact.
This is why Carr’s petulant outburst yesterday about Pacific Brands’ announcement speaks volumes for his lack of understanding of the proper relationship and dynamic between business and government. Carr, according to The Age this morning, “blasted” Pacific Brands for rebuffing the offer of help. “I spoke to the chairman of the board and I specifically asked was there anything further we could do to get the company to change its mind, and the answer they have given me is ‘no’.”
What the hell was Carr doing blithely offering taxpayers’ money to this company anyway? Does he make it his business to wander into the board rooms of businesses around Australia offering cash so that the company might spare the government the political pain of bad headlines from job losses and factory closures.
Pacific Brands’ board knows their business better than Carr and they made their decision in accordance with their duties as directors. They were not going to be heavied by politicians like Carr. They knew that, despite having been the recipient of government handouts in the past, this time it would not help.
Get Crikey FREE to your inbox every weekday morning with the Crikey Worm.
Kim Carr must be Finance Minister Lindsay Tanner’s nightmare. His track record as Industry Minister has been one of a jolly candy man who has allowed the Australian car industry to gorge itself on government largesse. Yesterday he appeared to signal that the way to get a handout from him was to warn of job cuts.
Carr told The World Today, yesterday, “we also want to hear when they’re cutting jobs; we want to know what actions that we can take to avert that situation.”
The candy shop is open, in other words.