If you thought the failure of the government to secure a clear mandate at the polls and the emergence of economic populists as likely gatekeepers of the Senate would make business lobbyists reconsider their agenda and the contribution they were making to Australian civic life, think again.
The outcome of the election has drawn laments from business lobby groups about “uncertainty”: James Pearson of ACCI expressed his “disappointment” at both the result and the fact that “pro-business” policies might be harder to get through parliament. Wesfarmers’ Michael Chaney (he of the billion dollar writedowns), among a host of business leaders, decried the outcome of Australia’s democratic process. Gerry Harvey demanded a Chinese-style dictatorship. Some of the whining echoes what followed the defeat of the Newman government in Queensland, when business complained Australia was “ungovernable” because voters threw out governments carrying out economic reform. The return of Pauline Hanson drew warnings about her impact on perceptions of Australian in our key Asian markets.
So far, so predictable. But the 2016 federal election was different in that the Liberal Party relied heavily on a key demand of business as its primary selling point: a massive tax cut for large corporations. This was at the centre of its “national economic plan” — indeed, was nearly all of that plan. Senior business lobbyists thus swung even more strongly behind the Coalition than usual. Pearson championed a ten-year corporate tax cut as one of his major economic reform proposals. The Business Council launched a campaign against Labor. News Corp (which paid no tax at all in 2013-14 and which has been identified by the ATO as the country’s top risk for tax avoidance) used its outlets — particularly The Australian — to champion the tax cuts.
What’s been the reaction to the defeat of this campaign? Jennifer Westacott of the BCA yesterday was reported as saying the BCA had to double down on its efforts to explain how important business was, and that more growth and more investment were the key to addressing inequality. But former BCA head and Coalition backer Tony Shepherd went all out in an op-ed yesterday in — where else — the Australian Financial Review to complain that the business agenda for reform was being obstructed by voters. The irony is, Shepherd had his chance to implement the business agenda via the national commission of audit that Tony Abbott and Joe Hockey asked him to undertake in 2013. But so reactionary — and in some cases factually wrong — was his report that even Abbott and Hockey in full “end of entitlement” mode blanched at it.
And Shepherd’s op-ed is riddled with more errors. “Australia’s cost of delivery in major projects is 40 per cent higher than equivalent jurisdictions,” he said — a claim Crikey has shown to be profoundly flawed (and others as well). “When the ABCC had its full powers we enjoyed a significant increase in productivity while the construction workers continued to be well paid and well cared for.” Again, wrong, at least according to the Productivity Commission and Safe Work Australia.
“At the Commonwealth level there appears to be very few effective measures of the effectiveness and efficiency of its various programs and grants across all portfolios. Expected outcomes are not established at the outset, let alone measured and reported afterwards.” Er, fundamentally wrong — the entire budget process in each Commonwealth portfolio is structured around an Outcome/Output system with identified indicators for each output, and has been for decades. “Industrial reform is off the table.” Well that’s very likely true — but Shepherd thinks we urgently need to fundamentally overhaul an IR system that has given us productivity growth, the lowest ever level of industrial disputation and a wages-employment trade-off that the Reserve Bank, the PC and even ACCI admits has been beneficial for the economy.
If senior, besuited, influential members of the establishment like Shepherd and Westacott — and the Pearsons and Willoxes of the business world too — treat facts as though they’re an inconvenience to be dismissed on the way to prosecuting corporate interests, then why should outsiders not play by the same lack of rules? If business leaders want a post-truth environment, one in which tax cuts for which no evidence exists of benefit are lauded as an economic panacea, one in which Pearson can declare he wants a return to the Accord era of cooperation when industrial disputation levels are running at less than 5% of what they were in 1980s, then why shouldn’t Pauline Hanson simply invent — as she does — nonsense about immigration and living standards? Why shouldn’t Nick Xenophon declare that a return to protectionism will save jobs, when we know that it’s a path to lower living standards? If lies and myths are good enough for the pillars of the business establishment, why aren’t they good enough for everyone else?
The business lobby incessantly pushes an agenda of corporate handouts, spending cuts and slashing wages, but then complains about being repudiated by voters. But worse, this pigheadedness is directly facilitating the resurgence of populists like Hanson and Xenophon (Xenophon is not to be classed with Hanson on other matters; he is a decent, intelligent human being). Economic populists take advantage of voters’ perception of inequality, the sense that they haven’t benefited from economic liberalism, that they deserve special help to shield them from market forces. Business is doing its damndest to reinforce exactly those perceptions of inequality, strengthening voters’ belief that companies don’t want to pay their fair share of tax, that they want ever more help for business while workers get to make do with lower wages and poorer conditions, all in the name of efficiency and competition.
There’s an alternative path — to recognise that Australia’s implementation of liberal economics in the last thirty years has been the most successful in the world because successive governments have worked to restrict the growth of inequality through investing in health and education and providing a safety net in the industrial relations system and a fair tax system. These are not impediments to a free market nirvana but a crucial reason why Australians are far richer, healthier and better educated than they were thirty years ago, and why most Australians, whatever their views on matters like privatisation and taxes, continue to support our overall economic direction. Instead, business continues to want to tear down those “obstructions’.
In business turning around and complaining about the election result, the return of Pauline Hanson and the rise of economic populism, they’ve got, to use Keating’s vernacular, more front than Mark Foys. If someone like Westacott can seriously say that the answer to perceptions of inequality is to talk about how great business is and how they need tax cuts, then business better get used to elections serving up a long line of populists ready to disagree with them.