The large business community has yet to come to grips with the fact that on September 14, 2015, the Coalition government became a government that placed a much greater emphasis on the development of small- and medium-sized enterprises in Australia.
This is the segment of the community where both votes and future employment will come from. The government may try and obscure this policy switch with a company tax cut, but the momentum is unstoppable because, while the ALP has historic problems in the small enterprise arena, it is equally aware of where future governments must head.
At the moment, the Business Council of Australia is complaining about the proposed “effects test”, not realising that the protests help boost the government’s popularity.
The Liberal party has been closely aligned with the larger business community for decades. It still has strong influence in some areas of cabinet, but the sharp decline can be traced back to events that took place well before September 14.
There were deep rumbles in both the Liberal and National parties over the fact that large corporates were virtually silent when the ALP government repealed Work Choices. It did not become vocal until the Coalition came to power. The silence of the large corporate community helped the ALP to badly wound the Coalition. No one in the Coalition has forgotten.
These days, few large companies are investing to expand and create employment and that’s not going to change, even if company tax is reduced. Most corporates invest to reduce costs and staff, so the jobs must come from smaller enterprises.
The royal commission into trade union governance and corruption revealed that each year vast sums of money go from large corporations and their networks to unions via training, superannuation and a multitude of other corrupt payment devices. And some of those firms that don’t make corrupt payments make union membership almost compulsory.
Large chunks of this money end up in the ALP and Greens coffers and are used to attack the Coalition. Not happy, Jack.
But in the days of Tony Abbott and Peta Credlin, those around them kept in close contact with the large corporate community, which therefore retained great influence. Accordingly, the “effects test” was pigeon holed and the proposed unfair contracts legislation was rendered useless.
The big companies had great influence.
That all changed on September 14. On the morning of Monday, September 14, the ALP, the Greens and the crossbenchers combined in the Senate to raise the unfair contract limit from $100,000 to $300,000 for one year. That amendment gave the legislation real teeth, so it covered some 1.5 million people and hundreds of thousands of contracts.
On the afternoon of September 14, the Abbott government declared that the unfair contracts legislation would be abandoned — the government claimed it had honoured its promise but had been thwarted in the Senate. Like the “effects test”, the legislation seemed dead.
Then came the evening of September 14 and Malcolm Turnbull became prime minister. One of his first actions was to ring the crossbenchers seeking good relations. He agreed to adopt the Senate unfair contracts amendments and on November 12 it passed the Senate.
That legislation now requires a completely different style of management in large corporations and the public service (Big firms need to play catch-up on contracts, March 4).
Then Barnaby Joyce became leader of the Nationals. Like a lot of Liberals, Joyce understands just how important the small enterprise community is going to be to the future of the nation and he pushed for the “effects test” and it will now be part of the Coalition’s election campaign.
Last week I explained just how important this legislation is to the nation.
At the moment, unlike large corporations, the small enterprise community has no competition protection because it can’t afford to participate in the court system (Next up on the government’s reform agenda, March 17).
Not surprisingly, the business council takes a different view and even reckons it will make it harder for big retailers to combat Amazon. If there is a clause that creates that effect in the legislation then it can be changed.
The “effects test” and unfair contracts legislation are going to make it easier for smaller enterprises to compete and create employment.
Large companies and the public service will require a huge culture change but those that have leaders that are up to the task will come out of the change much better equipped for the decades ahead, with a flexibility that can handle disrupters.
The days of being able to wield market power to crush competitors and contractors are going. They will not return under the Coalition and I think if the ALP ever gets into power, they will follow a very similar path.
The game changed on September 14 and those corporates that adapt will be much stronger.
Footnote:It looks like the superannuation changes in the budget will greatly curtail money coming from superannuation. Companies will need to appeal to private investors. The unfair contracts/effects test changes and the clamp down on superannuation are not related, but they are part of the same pattern.
Investors turn to Asia
Our big banks might have retreated from Asia, but it’s an exciting region for long-term growth.
Franking grab will hit ASX
Labor’s franking credits policy is the first step in giving some pensioners a sharp clip under the ear, but investors will suffer too.