PwC should stick to making money, not platitudes

It is tempting to think PricewaterhouseCoopers is being a little precious with its offer of counselling for staff suffering post-presidential election trauma.

That is not to deny the suffering of those who, for reasons they can barely explain, find the juxtaposition of the words “president-elect” and “Donald Trump” disturbing. Some are tormented in their sleep, as the online magazine Atlas Obscura discovered when it invited readers to share Trump nightmares.

“I was hiking the Appalachian Trail when a large tree with the face of Donald Trump chased me off a cliff,” wrote one. “It was like Jurassic Park, dinosaurs were trying to find my friends.”

Another was shocked to see Trump walk into his room. “He was so evil inside that he turned the air and light orange. Men on motorcycles were dragging people behind them if they posted negative things about Donald Trump. They were called ‘The Oranges’.”

Trump has become an archetype of evil for the right-thinking elite, the antithesis of everything they hold righteous and true.

PwC’s Australian chief executive Luke Sayers has written to the company’s 7000 staff warning that Trump represents a danger to the company’s values — diversity, inclusion, ­access, that sort of stuff.

“Partners and staff have reached out to me already concerned by reports of women being denigrated on the streets in the US, or Muslims being told to go home,” he writes.

There is much that is odd about this letter. Not least is the revelation that an executive responsible for a $2 billion division of one of the big four accounting firms takes uncorroborated accounts of mass outbreaks of misogyny and racism seriously.

Such naked prejudice against the president-elect and his supporters sits uneasily with PwC’s values of inclusion. Staff members who disagree with the boss’s left-wing take on Trump would be feeling decidedly excluded. A company that prides itself on “embracing difference” when it comes to sexual orientation takes a different approach to political orientation. Neither, in a better world, would be any of the company’s damn business.

One wonders what Samuel Lowell Price, Edwin Waterhouse and William Cooper — the 19th-century London accountants from whom PwC got its name — would make of the fetish for virtue signally that is now common in the corporate world.

They no doubt would be puzzled that business men and women seem so uncomfortable in their own skin, reluctant to accept that self-interest is the driving principle of success. The best contribution any entrepreneur can make to making the world a nicer place is to make a profit, since profitable businesses benefit everyone.

The public benefits that automatically flow from successful enterprise — jobs, economic growth, tax revenue, innovation and consumer choice, to name a few — are reason enough for a corporation to feel good about itself. There is no reason to resort to such painful moral vanity.

In the end, shareholders will decide how much value they receive from the back-office ­bureaucracies and internal compliance that the diversity and inclusiveness industry spawns. They may judge that compassion washing is good for the brand and ultimately may grow the business. There is something distasteful, however, about a company that sees social issues as a marketing opportunity.

Meanwhile, a genuinely scary consequence of Trump’s victory — scary at least from a parochial Australian point of view — has been all but ignored beyond the pages of this newspaper and The Australian Financial Review.

Trump’s pledge to lower the corporate tax rate from 35 per cent to 15 per cent makes the political resistance to lowering our own company taxes even more troubling.

Capital has never been more flighty, and if Trump pushes ahead with his policy, billions of dollars of US capital sheltering in Australia are likely to return home. Trump promises a tax of just 10 per cent on repatriated capital.

Trump’s aggressive move will be a game changer. Countries across the OECD from Ireland and Britain to New Zealand have recognised the competitive advantage that lowering corporate tax brings. Australia is stranded with Hungary and Chile as the only countries in the OECD not to have reduced corporate tax since 2001.

With the US’s move from one of the highest to one of the lowest corporate taxing regimes, Australia’s relative competitiveness will decline. Australia extracted the equivalent of 4.9 per cent of gross domestic product from corporations in 2013, well above the OECD average of 2.8 per cent. No country other than Norway was so rapacious.

Business, one might think, should be leading the debate on the benefits of corporate tax reduction, arguing how it would boost investment, grow the economy and create jobs. It should be explaining that Australia’s ambition to become a services hub in the Asia-Pacific is pie in the sky while our taxes are so uncompetitive. It should be exposing the fanciful notion that a government can plunder all it likes from businesses without affecting the livelihoods of its citizens. The economic studies examining the effect on wages of company tax confirm the commonsense observation that the more an employer pays the government the less it has to pay its employees.

Yet somehow the argument for even the modest company tax cut promised by the Turnbull government is in danger of being lost. Bill Shorten’s refrain that cutting taxes for big businesses rewards the rich and undeserving may well hold sway in the Senate.

Labor under Shorten has completed its transformation from a party that saw business as partners in prosperity to a neo-socialist collective at war with the top-hatted, money-grabbing bourgeoisie.

Some sections of the business community have given up the fight. They have turned into self-loathing capitalists, indulging in ever more fanciful programs of corporate responsibility in an attempt to prove they are not so evil after all. Please don’t think of us as a $50bn worldwide profit-making machine but as an investor in social change, creating an inclusive culture, connected, listening and talking to a diverse network about the issues of today and the challenges of tomorrow.

PwC has whole departments dedicated to writing that stuff, by the way. It’s not made up.