There’s a major shift underway in the Australian polity, and across the west. Politicians, because they have to, have felt it and are responding to it, in varying ways and with varying levels of efficacy. Some people in business have felt it and are responding to it. Most, however, either remain oblivious to it or think it’s trivial or temporary. Neoliberal economics and the unquestioned supremacy of the corporation are no longer regarded with passive, if slightly resentful, acceptance by the electorate, but with active hostility, with an anger not seen before — because the economic system is no longer regarded as delivering for citizens.
Picking who within business gets it and who doesn’t makes for an interesting game. One outfit that clearly doesn’t is the traditionally moderate and sensible Committee for the Economic Development of Australia, which is has been holding a “State of the Nation” talkfest in Canberra over the last day and a half. Unlike business itself, an outfit like CEDA is in effect two steps removed from being able to pick up what’s going on, since, like the public service, it’s staffed by comparatively wealthy, highly educated people who have few concerns about job security and who don’t even have to make a living from selling goods and services in a way that might expose them to ructions within the community.
Prime Minister Malcolm Turnbull, opposition leader Bill Shorten, an array of ministers and shadow ministers, crossbenchers, state treasurers, and some business people, including Grant King of the Business Council of Australia (the pre-eminent Doesn’t Get It organisation in the country) all attended the talkfest. yesterday it had a session entitled “job security, disadvantage and Australia’s rustbelt: where to from here?” that examined “what can be done to improve job security and economic prospects for vulnerable groups in the community, re-energise regional economic development, and strengthen our resilience in the face of increasing disruption?”
You might think trade unions or the ACTU, which have been banging on about, and conducting research on, casualisation for at least a decade might have an informed view on such matters, but for some reason no trade unionists were invited by CEDA.
Ironically, there’s also a session called “Australia: leader or laggard in the race to secure our future industries?” which was about asking “searching questions about our ability to identify, develop, and secure future industries for our continued economic growth”, held the same day the country’s most powerful media executives were in Canberra to lobby politicians for protection via tax cuts and regulatory changes against the threat of disruption from competitors.
While the great and the good were gathered in Canberra, CEDA issued a media release this morning lamenting that the IMD World Competitiveness Yearbook had shown Australia dropping out of the top 20 nations. The World Competitiveness Yearbook isn’t to be confused with the World Competitiveness Index, that sublimely silly World Economic Forum publication that ranks countries like Saudi Arabia ahead of Australia in areas like rule of law. But both are based on dodgy surveys of business execs.
Thus, according to CEDA’s Rod Maddock (a former Commonwealth Bank exec and Business Council economist), “in the government efficiency rankings the corporate tax rate on profit was the area where Australia had the poorest ranking at 50, highlighting again why change is needed to make us internationally competitive”. But Maddock admitted earlier in the media release “one of Australia’s economic strengths was the level of investment flows inward”. So, we have no trouble attracting foreign investment (foreign investors being the only beneficiaries of a company tax cut) but apparently we need to cut company tax to be competitive.
Here’s an alternative take: countries like the UK and Canada (that have cut company tax while Australia hasn’t) haven’t enjoyed the same level of foreign investment that we have, reflecting the fact that company tax cuts have never achieved any of the benefits spruikers claim for them. Instead, large companies and their happy dupes like CEDA encourage the fiction that there needs to be an international race to the bottom on taxation — one that infuriates electorates and leads to the kinds of backlash we’re seeing across the west — and the kind that politicians can’t afford to ignore, which is why our own conservative government is now savaging the big banks rhetorically and financially in a way Labor never did.
Bet you didn’t hear that at the CEDA talkfest.
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