A beleaguered Liberal prime minister dines in the boardroom of a multinational law firm, up sixty-something floors in one of Sydney’s most prestigious office towers. With him are some of the most senior Australian business leaders and the representatives of the top corporate lobby group, the Business Council of Australia. The Prime Minister berates those assembled for failing to donate enough to his party, and failing to advocate forcefully enough for his policies. The complaint falls on deaf ears — the business dignitaries assembled respond that his policies aren’t pro-business enough. There are complaints about the bank tax. And one complains that the government is proposing to introduce its company tax cut for multinationals and giant corporations over ten years when it should be much quicker, and that there hasn’t been enough industrial relations reform. 

Then the whole thing promptly leaks.

What’s fascinating about this great story from the The Australian Financial Review’s Phil Coorey is how utterly normal this is regarded as: a Prime Minister forced to the indignity of rattling the tin for donations at an elaborate version of a BBQ fundraiser, the blatant quid pro quo of donations for policies — and business leaders demanding that wages be further cut and corporate taxes be slashed further.

Yes, at a time of record low industrial disputation, falling real wages, cuts to penalty rates for our lowest-income earners and growing labour productivity, there remain business leaders who think the problem is the government not trying to gut unions savagely enough and not driving wages down aggressively enough.

Turnbull has partly worked out neoliberalism-as-usual is no longer going to cut it politically. The experience of nearly losing power will do that to you. Business leaders, on multimillion-dollar remuneration packages and in comfortable boardrooms with spectacular views, have a vague idea something is up, but can’t quite understand it, because, to use Upton Sinclair’s phrase, their salary depends on not understanding it: the neoliberal era of governments bending over backwards to give corporations what they want is finished. And one of the reasons it is finished is exactly what was on display in Coorey’s article: they have no idea when to stop. No matter how much wages are cut, no matter how much of national income is shifted from labour to capital, no matter how much they dodge taxes, they always want more attacks on industrial relations laws, more deregulation and more tax cuts, even as the governments that implement such policies are punished by voters.

This is classic “you call it democracy, we call it sovereign risk” thinking from business: democratic governments should simply ignore what the electorate wants and take care of corporations, regardless of the consequences.

Turnbull hasn’t fully worked it out yet either, despite, pursuing protectionism, adopting Labor’s Gonski policy and going after the much-hated banks. He appears convinced that big business advocating for policies will help him politically. Why he thinks such a tarnished, indeed toxic, group like large corporations will add to the appeal of any policy is a mystery: large corporations are perceived as the beneficiaries of a system that is no longer delivering for ordinary households — that, indeed, is exploiting ordinary households.

Perhaps, just as is forecasted in the budget, wages growth will suddenly surge (doubtless to the chagrin of the unnamed CEO who wants more IR reform) and voters will get over their bitterness toward our current suite of economic policies. Don’t count on it. And if you’re a politician, don’t gamble your future on it.

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Peter Fray
Peter Fray
Editor-in-chief of Crikey
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