Politicians have another bash at business

The Business Council of Australia has sounded a warning about the damage done to the economy when politicians bash corporate Australia. It is a legitimate concern as we bear witness to a rising tide of populism in parliament and the broader impact it is having.

Parliamentary committees blast corporate Australia with gay abandon, only to have their reform recommendations ignored by government anyway. The opposition plays footsies with the Greens, arguing for the forced break-up of Coles and Woolworths. At least Peter Dutton poured cold water on that silly idea recently.

Next Tuesday the supermarkets are going to be forced to appear before yet another Senate committee, this time for an entire day, as no doubt they get dragged through the mud by senators hellbent on raising their own profiles.

To his credit, federal Industry Minister Ed Husic bucked the trend this week, recognising that while government can agree to disagree with corporate Australia from time to time, “they’re the generators of so much economic and commercial opportunity, and especially jobs”. In other words, attacking business risks prosperity so it should happen only when absolutely necessary.

The industrial relations laws Labor has passed don’t make doing business in this country any easier, but at least they are rooted in ideological convictions born out of the party’s ties to the unions. Voters know what they are going to get when electing a Labor government, so it is a case of buyer beware.

Too many of the attacks on businesses these days represent little more than pandering to voter dissatisfaction with cost-of-living pressures, politicians seeking to divert blame away from themselves, using their high profiles to lay the blame at the door of corporate Australia instead.

Higher prices are a product of high inflation and rising interest rates, also a consequence of the decade-long decline in real wages. These are failures of government, not the business community.

In truth our corporate taxes are high by world standards, our regulation stifles doing business and we don’t provide the sort of incentives that encourage entrepreneurship the way other nations do. All of this hampers the economic growth and productivity that are needed to generate the boost to prosperity the political class should be encouraging rather than discouraging.

The disconnect comes from the fact there is so little overlap between who goes into business and who goes into politics. The pre-parliamentary backgrounds of modern politicians reveal even less overlap than in the past.

When wrongdoing by businesses is uncovered, rather than moving quickly to address what processes allowed it to happen or simply accepting that rules will never wipe out rule-breaking behaviour, politicians use the news to score points. Parliamentary committees are set up, endless inquiries are authorised, but at the end of it all little occurs beyond the damage the process does to community confidence in sectors Australia needs to thrive.

I’ve written before about the show-trial nature of modern parliamentary committees, how a once vibrant system (where my PhD research started) has turned into little more than a forum for fringe dwellers in the political system to make loud noises in the hope of being heard.

Following my column a fortnight ago, former Victorian Labor attorney-general Martin Pakula posted on social media: “This is an interesting read. I’ve thought for a while that these Senate committees are sailing very close to a Kerry Packer moment.”

That moment was in 1991, when Packer appeared before a parliamentary committee and “mercilessly slapped them around”, as Pakula put it.

That needs to happen again in one of the 125 ongoing parliamentary committee hearings stifling productivity. What a ridiculous number. They have become like the boy who cried wolf with their endless over-the-top howling.

Because a few bad apples at PricewaterhouseCoopers engaged in unethical practices, the entire company is being tarred and feathered via the various committees investigating what went on. Just look at the polemical titles given to the two committee reports looking into PwC: the first was named A Calculated Breach of Trust, the second The Cover-Up Worsens the Crime. Attention-seeking behaviour if ever I’ve seen it.

Never mind that it was government that brought PwC in to offer free advice on how to close tax loopholes for some of its biggest clients. While the individuals who passed on what they discovered in these confidential discussions clearly did the wrong thing, it was utterly inappropriate for government to go to them in the first place. Incidentally, that approach hasn’t changed, apparently because the expertise in the public service isn’t good enough to design Australia’s tax system without outside help. What a farce.

We know the joint parliamentary committee is reconvening on May 8 because one of its more excitable witnesses took to social media to spruik his looming appearance, breaking the convention that the committee makes such announcements.

Andy Schmulow, an associate professor of law at the University of Wollongong, has described PwC as “like airborne Ebola”, demanding its new chief executive, Kevin Burrowes, have his work visa cancelled and be deported by the Australian government.

Extraordinary stuff. He even posted a picture of Burrowes on LinkedIn after his first appearance, alongside a picture of a bathtub full of red liquid, writing: “The bloodbath in Canberra – a new Hollywood blockbuster” and describing Burrowes as “gormless”.

The attacks didn’t stop there. Schmulow also took aim at Australian Securities & Investments Commission chairman Joseph Longo, describing him as an “organ grinder” and deputy chairwoman Sarah Court as “his monkey sidekick”. He went on to make further, more unpleasant attacks that I’ve chosen not to repeat.

I’m no lawyer but if those insults aren’t defamatory I don’t know what is. Surely the committee should rescind Schmulow’s invitation to give evidence. Who knows what he might say when addressing it under the protection of parliamentary privilege. If committee chairwoman Deborah O’Neill doesn’t act, what does that say about the standards of a committee so quick to judge others?

This is a perfect example of the problems created by pandering to populism and stoking negative sentiments from the lofty heights of parliament. It encourages others to over-egg and personalise what otherwise may be legitimate concerns about governance structures in organisations such as ASIC, or cultural issues in business organisations such as PwC.

But when the rhetoric flares up for the purpose of creating headlines, it becomes a race to the bottom that no longer serves the national interest.

Peter van Onselen is Winthrop professor of politics and public policy at the University of Western Australia.