banking royal commission

If it’s no longer clear to anyone — perhaps not even himself — what Malcolm Turnbull stands for, it’s not his problem alone any more. His party’s ready acceptance of yesterday’s package of interventionist measures aimed at power companies shatters what’s left of the Liberal Party’s credentials as the champion of free markets in Australia. What do the Liberals now stand for, if anything? Breaking up companies, price controls, the re-entry of government into the electricity generation sector.

Business is aghast — and all the more so because of the looming abandonment of company tax cuts following their defeat in the Senate. Business groups emerged yesterday to slam the policy chaos (carefully leaving the impression that Labor was to blame as much as the Coalition) and lament the proposed new competition regulator powers. The Financial Review and veteran pundits like Matthew Stevens and Tony Boyd are dismayed, as is John Durie at The Oz. How could it have gone so wrong in just three years since Turnbull took over promising a new era of economic reform, liberal policymaking and smart politics?

Much of the blame lies, yes, with Tony Abbott and his tiny band of malcontents who, like Kevin Rudd was, are prepared to rip their own party apart and set back the cause of good policy for the sake of their own egos. As Abbott correctly notes, though, at least he does his destruction in full public view, unlike the gutless Rudd. And yes much of the blame also lies with old white male climate denialists in the Coalition who won’t accept any climate action of any kind. 

But any proper assessment of this period marked by the death of neoliberalism in Australia needs to take into account how business itself was crucial in creating the conditions for the kind of backlash we saw yesterday. Between the major energy companies and the big banks and retail super fund owners — less than ten companies — big business has demonstrated how it accumulates and then abuses power to exploit customers, damage the economy and undermine community trust. These are companies that had it all — market share, size, investor support, political influence, economists and pundits queued up to justify everything they did and unchallengeable positions at the heart of the economy. And they blew it by pushing for ever higher profits no matter what the damage to public perceptions of them, while their lobbyists at the Business Council pushed for billions in tax windfalls for them and demonised their competitors. 

In the end, the very party they’d funded to protect them turned on them, delivering blows far more savage than their progressive opponents would ever have delivered.

That it happened on energy is all the more apt given business sat by and said nothing while their side of politics tore apart a carbon pricing model that was delivering emissions reductions at a low cost and with little disruption. The lamentations of the Business Council and their like about the lack of an energy policy after yesterday’s debacle are rich coming from the people who were content to demand, over and over and over, in 2014 that Labor’s carbon pricing scheme be repealed. “We call on all political parties to work together to deliver a workable and durable energy and climate change policy that will drive investment and improve certainty,” the Business Council wailed yesterday. Give us a break.

Will the penny drop within big business about the role they have played in all this? As we ponder the sixth period of prime ministerial leadership chaos since John Howard came to the brink during the 2007 APEC meeting, it seems no one is learning anything.