Don’t pigeonhole companies as self-serving: Stevens

Former Reserve Bank governor Glenn Stevens has lamented the ‘pigeonholing’ of big business in the economic debate.

Glenn Stevens, Heather Ridout, and Paul McClintock. Picture: James Croucher

Former Reserve Bank governor Glenn Stevens has lamented the “pigeonholing’’ of big business in the economic reform debate, which he believes has too often condemned its contributions to being viewed as simply “self-serving’’.

Speaking to The Australian, Mr Stevens said he struggled with being similarly “pigeonholed’’ in the decade he ran the RBA.

“To be honest the difficulty that the business community faces at least in part is that it struggles to articulate for policy positions that it genuinely believes are pro-growth and mean higher living standards for the country, without sounding as though it just wants a tax cut,’’ he said.

“It is hard. There are people who always want to pigeonhole you. That public discussion always wants to pigeonhole people. In my old job, you were a hawk or a dove. You could never be balanced or nuanced. Which were you, (but) you can only be in one box. That is the way public discussion proceeds, regrettably perhaps, but that is the way it is.’’

He says the ongoing challenge for business is to “articulate in favour of things that will grow the economy, jobs and per capita livings standards. And to get people to see why it isn’t self-serving.’’

Mr Stevens, who retired from the Reserve Bank board in September last year, was speaking after he became the newest member of a private Sydney directors club known as O’Connell Street Associates (OCA). The Australian revealed on the weekend that Mr Stevens had joined the other prominent non-executive directors, including Paul McClintock and Heather Ridout, who share premises in Sydney’s O’Connell Street.

In the wake of recent comments by one of the nation’s most senior public servants claiming the public appetite for economic reform is the worst he has seen in three decades, Mr McClintock, also the chairman of Myer, said the case for change was hamstrung by the poor relationship between business and government.

Mike Mrdak, secretary of the Department of Infrastructure and Regional Development, told a recent Infrastructure Partnerships Australia forum that “cynical attacks’’ on those pushing for policy reform made it “very hard as a nation to take hard decisions on the way forward’’.

Mr McClintock said there was a level of “mutual dissatisfaction’’ between business and government.

“From business, the astonishment with the way the working visas issue was handled, that just hit everybody completely by surprise. And it was terrible — as a piece of public policy it was breathtakingly bad. When you look at the relationship between business and government, you can’t make mistakes like that,’’ he said.

Mr Stevens said the government’s move in the May federal budget to impose a tax on the banks ignored the fact that millions of Australians were financially connected to the institutions in different ways.

“The myth is perpetuated that the banks are some other group of people other than the depositors, the shareholders, superannuation investors and the people who work there,’’ he said.

“They are not Martians whose resources we can tap. The bank is depositors, borrowers, shareholders, managers, workers. There is not some other pot of money there that you can go tap. That is a myth. That hasn’t been successfully exposed.’’

The scandals at the Commonwealth Bank have further dented the reputation of the banks with government and in the broader community.

While not commenting on CBA, Ms Ridout — a former Reserve Bank board member — said of the banks in recent years: “Culturally they didn’t get it. They didn’t get it. They are facing up to that and they are making change.

“That is good, they are responding. But they didn’t get a number of issues, your credibility takes a hit and you have to work to get it back.’’

Ms Ridout, who was one of the signatories in March to a letter asking Prime Minister Malcolm Turnbull to legislate for same-sex marriage, defended the right of business to speak out on social issues.

“Business has a role in the broader community. And business has to assert its role, it pays the wages, it has to have a licence to operate,’’ she said.

“The idea that business can be put in a category and not have a broader role is wrong. And business needs to assert that role much more strongly. I don’t think it necessarily has in recent times. We need to push back and power in.’’

She also echoed Mr Stevens’ view that business needed to avoid being painted as a “narrow interest group’’. “They shouldn’t be pushed into being a narrow interest group by any other interest group,’’ she said.