Abbott Outsources Policy to Big Business
by Doug Cameron
27sc
on January 24, 2014
The Abbott government’s Commission of Audit will be a triumph of corporate ideology over democracy, rational government financing and government programs that help the disadvantaged. It will mark yet another step in our political history where the job of government is outsourced to corporate interests and the citizenry are cast in the role of casual observers – while the elites get on with the job of being elite.
The appointment of former Business Council of Australia CEO and Transfield Chairman Tony Shepherd set alarm bells ringing from the start. Shepherd presided over the transformation of the BCA from a partisan but nevertheless serious player in policy development into a still partisan, but rent-seeking outfit whose policy positions have led it to be a bit of a laughing stock. The performance of Transfield under his stewardship has been nothing short of abysmal.
In August 2013, the BCA issued a manifesto it called an Action Plan for Enduring Prosperity. It was described in The Australian newspaper, and possibly also by the BCA itself, as a Very Important Document. To achieve this distinction it was penned by people who Paul Krugman mockingly describes as Very Serious People; those who routinely hold mistaken, inconsistent, irrational and occasionally delusional beliefs but are somehow still thought of as respectable.
Typical of what passes for big business policy these days, the BCA called for tough fiscal restraint and debt reduction on the part of government. In almost the same breath it called for more government borrowing and spending for infrastructure like roads, electricity networks, railways, ports and airports. This, combined with complaints that business pays too much tax and a call for the rate of corporate tax to be reduced from 30% to 25%, meant the message started to get a bit confused. Unsurprisingly, the BCA didn’t even attempt to reconcile the inconsistencies.
For advocates of small government, it is interesting that the BCA’s persistent demand is that government must deliver fiscal austerity, debt reduction, tax cuts (except for the GST, which it wants increased) and better roads, ports, airports and railways all at the same time. The government must also “deliver” productivity “reform”, apparently ignoring the large increases in labour productivity since the introduction of Labor’s Fair Work Act; after it fell off the proverbial cliff under Workchoices. What’s more, the government should also ignore what is beginning to show up in the national accounts as a collapse in capital productivity of historically unprecedented proportions.
In the end, the BCA’s Action Plan for Enduring Prosperity was little more than a grab-bag of claims for what everyone else should do for business and it barely endured the daily news cycle. Perhaps the Commission of Audit will see its resurrection.
At Transfield, from where he resigned as Chairman to take up his Commission of Audit appointment, Shepherd presided over a collapse in the company’s market capitalisation to barely a tenth of what it was before the GFC. Shepherd and his fellow board members brought this about through ill-judged acquisitions resulting in after tax losses, impairments and write downs of over half a billion dollars; bringing with them job cuts aimed at cutting costs. Transfield is a shadow of its former self and a time when the people who actually owned the business ran it.
That Shepherd, along with the rest of the business community (doesn’t the word community make them sound so cute and cuddly), continues to believe that what is good for business is good for the country is one thing. They are entitled to believe whatever they want. But for the rest of us the problem is that the recommendations of the Commission of Audit will turn out to be a dangerous cocktail of contradictory policies foisted on a government that shows little ability to think for itself.