Hidden revolution: changing the rules is changing Australia

You can’t simultaneously make all these changes to a nation without consequences.

Changing the rules for casuals will have a profound effect on the hospitality industry. Picture Anna Rogers

While the whole of Australia is mesmerized by the incredible leadership ructions in Canberra, we are oblivious to what, longer-term, will be a more important nation changing event: the transformation of our capital system.

Popular politics, political correctness and, importantly, bad management are in the process of causing governments and regulators to both restrict and change large sections of Australia’s private enterprise structure. In some cases it will create paralysis.

It’s only when you step back and look at the totality of what is happening in Australia and link it to the US events that an incredibly dangerous situation emerges. It looks like we will need to suffer the consequences before reversing some of the measures that are now being put in place.

The industries that are in the front line of attack/change are among our biggest non-government employers, including banks, gas, electricity, hospitality, (including hotels and restaurants) telecommunications and retailers. And that’s just what is happening on the federal Coalition’s watch. If the ALP wins power in Canberra, which now looks certain, the attacks will extend to those who have saved modest amounts for retirement (the rich escape) and sections of the health and medical industry. At the same time, a totally different set of strategies have sparked a boom in the US but have also created trade wars.

Many of the current attacks on the Australian private sector have been made for good reasons and in isolation would have limited affect. But it’s the totality that is nation-changing

Let’s start with banks. We are all appalled at what we have seen in the royal commission and something must be done. But almost certainly we will “over-correct”.

Banks, life offices and their executives may be charged with criminal offences. Corporate cops from ASIC will move into the big banks with wide mandates.

Here is just one example: Every month the big four banks record around 15 million minutes of customer calls in their customer contact centres. We are looking at 60 million minutes, or 40,000 plus days of customer recordings. The banks analyse a small percentage of this data. But APRA now expects bank executives and directors to interrogate all available data, using new analytical technologies. They must report on major adverse issues, and not just report of the favourable data, as banks currently tend to do. I use that illustration to show how fundamental this regulator invasion looks like being. It will freeze credit in many areas. But not all.

In the absence of a royal commission, I am not sure just how bad the pricing practices of the power companies are. But for consumers, the bills are too hard to understand (akin to superannuation) and Malcolm Turnbull is probably right that there is price gouging.

So we are going to have price control to lower prices. Investment will be hard to justify, yet the current problem has been mainly created by the New South Wales, Victorian and South Australian governments vandalising their power systems by installing wind and solar farms without proper back up and investment in the grid to adjust to new power sources. Investment in solving that problem will be delayed, which will make power less secure.

In superannuation, Australians overcame the big fund problems now being revealed via self-managed funds. They will do the same in power via household solar and batteries. Big corporate users will do special deals that may create investment. But not everyone can do that so the power crisis blows will not be uniform.

In NSW and Victoria, gas development is being blocked for farm and green votes. Parts Victoria’s gas potential comes with agricultural water, which would have alleviated the current drought in East Gippsland. The farmers have paid a big price for political correctness.

The telcos also face regulation via the NBN, but the biggest change maybe actually the hospitality and retail industries where casual workers are paid a margin (usually 25 per cent) and employees and enterprises benefit from the flexibility.

But that has been blocked by the “worker police” via the Federal Court which, has made a decision which, according to the Fair Work Centre, has two huge implications: First, if an employee has a regular and predictable pattern of work, with an expectation of ongoing engagements, that employee is likely to be permanent as opposed to casual. This is regardless of the terms of an award, enterprise agreement or employment contract.

Secondly, where an employee initially commences employment working irregular hours under a casual employment contract, the casual employee can morph into a permanent employee during the course of the employment relationship, even though both parties continue to consider the relationship as casual in nature. As a result of the decision, a large number of employees currently described by employers as “casual” could in fact be permanent employees, accruing leave entitlements but being paid the casual margin. 



So we are going to have very different and less efficient industries in hospitality, cleaning and other sectors. Many talented workers will be hit.

I won’t detail what happens if the ALP comes to power but the same pattern will be repeated. Bill Shorten is going cap health fund fee rises and hit those with retirement savings of between roughly $800,000 and $1.6 million with what is a dividend franking tax.

You can’t simultaneously make all these changes to a nation without consequences. They will last much longer that the memory of yet another Canberra leadership crisis.