Good profits make for jobs and a prosperous nation

Profit, regrettably, has become a dirty word in some sections of the nation’s body politic, especially the ACTU. It is, in reality, the lifeblood of jobs, living standards, government revenue, shareholders’ prosperity and superannuation savings. The Business Council of Australia’s campaign to reverse the demonisation of profit is timely. It comes amid flatlining economic growth, record insolvencies, rising investment pressures and concerns over the Albanese government’s “anti-business” policies, especially in industrial relations. As BCA chief executive Bran Black writes in these pages, with 80 per cent of the nation’s workforce employed in the private sector and $153bn being paid in company tax, the demonisation of profitable businesses is resulting in bad policies, putting the economy and jobs at risk. “Large businesses employ more than four million Australians – almost one in three workers,” Mr Black writes. “Those jobs matter. When you squeeze an employer, it is harder for them to operate, and at the end of the day jobs aren’t as safe.” Corporate Australia had “become the national punching bag … we are dangerously close to making it taboo to run a business well and turn a profit”. A fortnight ago, for example, ACTU secretary Sally McManus cited the Commonwealth Bank’s $10bn profit last financial year to support a 5 per cent rise, well above inflation, in minimum and award wages. Such fatuous correlations are not uncommon. After warming to the Albanese government, initially, after the May 2022 election, BCA members such as BHP, Rio Tinto, Qantas, Woolworths, Coles, Woodside and Santos have been targeted by industrial relations, energy and competition crackdowns.

The Australian agrees with Tony Shepherd, who has led and served on major company boards, that community wellbeing relies on a strong economy driven by a profitable private sector. “We should be celebrating and encouraging companies which are doing well and not be seeking to tear them down at every opportunity,” Mr Shepherd told Geoff Chambers.

The BCA’s pre-budget campaign should also remind companies that have embraced woke social agendas of what their priorities should be. Corporate Australia, Janet Albrechtsen wrote recently, was complicit in adopting ESG (environmental, social, governance) and DEI (diversity, equity and inclusion) agendas. To the annoyance of many shareholders, 11 of the nation’s major listed companies contributed around $20m to the Yes side of the failed voice referendum. The companies backed the government/union side of the debate, Robert Gottliebsen wrote last week, which pitched concentrated capital power against the views of 60 per cent of Australians. Major donors included Woolworths, Bunnings, Kmart, Telstra, Lend Lease and the four big banks. Qantas spent $370,000 supporting the campaign by painting the logo on to three of its planes, and providing flights for officials on the Yes side. Qantas also supported the Yes case in the successful same-sex marriage plebiscite.

The BCA’s pre-budget campaign coincides with two major announcements this week relating to corporate operations. On Monday, former Labor minister Craig Emerson’s interim report on a food and grocery code of conduct will recommend a mandatory code for supermarkets with annual revenues exceeding $5bn, such as Coles, Woolworths, Aldi and wholesaler Metcash, with penalties of up to $10m, or 10 per cent of a company’s annual turnover, or three times the benefit it gained from breaching rules. The moves are designed to allay consumers’ concerns over the cost of living. But the report, sensibly, does not support forced divestiture to address market power in the supermarket industry.

Jim Chalmers will also unveil proposed merger reform plans as part of the government’s competition overhaul. Major company bosses want mergers to be processed faster and for new rules to consider economic arguments. The Australian Competition & Consumer Commission wants mandatory notification of mergers above certain thresholds. As the government eyes reforms, the freedom of businesses to operate and make a profit must be a major consideration. As Mr Shepherd says: “If the ecosystem of business small, medium or large isn’t doing well, that means jobs go, taxes aren’t paid and critical infrastructure such as roads, rail, schools and hospitals cannot be built.”