BCA chair Grant King with Prime Minister Malcolm Turnbull
One of the best traditions of the Australian Financial Review is when it holds a “roundtable” of business executives and report, as if bringing down tablets from the mountain, the views of such gatherings, no matter how bizarre. Personally, I enjoy reading such collections while listening to the third movement of Beethoven’s “Pastoral” Symphony No. 6 in F Major, “Merry gathering of rentseekers”.
For a sector that is faintly starting to realise something has gone seriously wrong with the neoliberal agenda that has delivered higher profits, lower taxes and more compliant, less expensive labour for decades, such gatherings have a particular resonance at the moment — especially around the issue of how business retrieves its reputation with the community out of the toilet.
The strategy, apparently, is to hit the flush button a few dozen more times.
Today’s effort was from the Business Council, the nation’s most powerful big business lobby group. How, the reader might wonder, would the council address the problem of wage stagnation, which is responsible for much the alienation toward our economic system felt across the electorate?
Well, if I rephrased the question to “what is the Business Council’s solution to anything?”, would that give you a hint?
According to BCA chair Grant King — that’s Grant King who performed so brilliantly at Origin Energy — the answer is, yes, company tax cuts.
“All we can rely on is productivity growth. Productivity growth is inhibited by excess regulation, by a whole bunch of things that cause doubt for businesses to invest … The Treasury, any economist, will tell you what drives productivity: it’s investment. So all roads lead back to business investment … We need investment to drive income growth. The only lever to pull is taxes to change, you know, the economics and investment.”
This is “give us a tax cut or the puppy gets it” approach to public policy. No one will get a pay rise until we give Grant and his mates at the Business Council a whopping big tax cut.
Don’t forget that the members of the Business Council only pay just over 24% in tax now, rather than the legal 30% rate. And the only reason it’s that high is that the big banks, almost uniquely, pay close to 30%, lifting the much lower rate of the rest of the BCA membership, which includes some of Australia’s most brazen major tax dodgers like News Corp, BHP, Google and Uber.
Of course, if you guessed that the answer would be “industrial relations deregulation”, you’d only be half right — the BCA have given up on IR for the moment because, according to Richard Goyder, “we’re certainly not holding our breath that we’ll get significant reform from any political party”. By the way Goyder is the one who thinks there’s no problem with high executive remuneration, saying about his Wesfarmers successor “my sincere hope is that he maxes out on his incentives every year”. Love your sincerity, Richard. Other participants, at least, had the good grace to mumble something about transparency or even, in one case, suggest that smaller pay packets might be a good idea.
So it’s fun to point out the utter cluelessness of these plutocrats, sure, but there’s a serious point. These people, with their facile, neoliberalism-as-usual approach, are strengthening the hand of populists and people who would pull the entire economic system down on their heads. Every demand for a company tax cut, every lamentation about the lack of industrial relations reform, adds to the backlash against companies, against politicians who support them, against an economic system that makes their interests the priority over those of workers and consumers.
If the Business Council wants a Corbyn, if it wants a Sanders, it’s going the right way about it. Attacking Bill Shorten and Labor for failing to be insufficiently worshipful of the business agenda misses the point: if Labor (or the Coalition) doesn’t shift to match the sentiment of the electorate, then someone else, from outside mainstream politics, will — someone whose idea of changing the system won’t involve a fairer tax system and a banking royal commission, but driving a truck through the whole show.
Business, evidently, needs saving from itself again. Pity the clown car on display in the pages of the Fin does so little to make the case for why anyone should bother.
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