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Business snapped to action by politics of mediocrity

It was inevitable that as economic conditions worsened, and the Labor government tightened its grip on business, there would be a backlash and rethink in the boardrooms of corporate Australia. That day has arrived and not a moment too soon. The Business Council of Australia says there is now a material and concerning disconnect between the negative way in which business is perceived and the positive value it creates for Australia. Somewhere along the way, BCA president Geoff Culbert said, business has become a convenient scapegoat for all manner of challenging issues, and it’s coming from all sides of politics.

Having allowed itself to be distracted by the niche concerns of special interests, this is not surprising. It is a trend we have charted throughout the rise and deflation of the ESG tsunami that took the focus of company boards away from the bottom line. In Australia, the pain has been compounded by a misplaced trust by business that Labor would act in the national interest ahead of the interests of the trade union movement. Two tranches of industrial relations reforms that reinstated industry-wide bargaining and are on their way to re-unionising the Pilbara mines are testament to how wrong business was.

In a January 2023 editorial we warned that Jim Chalmers’ hunger to remake capitalism was “the logical consequence of a corporate sector that has been captured by the ideological demands of special interests and a financial world more values-driven”. The Chalmers doctrine, we said, “threatens to inject government into the centre of both corporate behaviour and investment decision-making”. Since then, the Albanese government has introduced its Future Made in Australia strategy, which is a return to an earlier age of industry regulation and government attempts to pick winners. Business has been told to take the subsidies on offer and not complain. Most new jobs are in the public sector, where productivity is in sharp decline. In February, we said that after facing a comprehensive rout on two tranches of IR reform and being exposed as badly out of touch with the public mood on the voice referendum, corporate Australia must refresh and take a constructive place in public debate about what is needed to build the nation’s productivity. Finally, the business community is starting to stand up and push back. The challenge is to put the focus back where it always should be: the contribution business makes to the welfare and standard of living of the nation.

Governments spend money created by others. Business employs six out of seven working Australians, and paid $145bn in taxes last year – close to a quarter of the federal budget. Much of the rest comes from royalties on the coal, gas and minerals we dig up and ship to willing customers. Mr Culbert invoked the warnings of bad government given by Ronald Reagan: “If it moves, tax it. If it keeps moving, regulate it. If it stops moving, subsidise it.” The BCA says that is the direction we are heading.

Business is finally speaking up, saying that to prosper we must heed the warnings of former BCA chair Michael Chaney, that “as a nation, we’ll be condemned to confront the same reform barriers and economic imbalances every 10 to 20 years if we fail to address a number of key underlying issues. Those issues are driving productivity through reforms to tax, workplace relations, regulation and red tape”. The hard-fought gains of industry and policy giants of yesterday, who brought workplace flexibility to the Pilbara and opened up the waterfront, are being squandered. We are, as a nation, going the wrong way and business finally has started to put the focus where it always should be: building national prosperity through the private sector and not pretending real wealth can come from a government handout.

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Original URL: https://www.theaustralian.com.au/commentary/editorials/business-snapped-to-action-by-politics-of-mediocrity/news-story/6cc0daba8dd2102ce08760d837e98244