Mr Lindsay Maxsted, Westpac Banking Corp chairman, gave a speech today in which he complained:
“It is not a government which is user friendly for business or a government that goes out of its way to understand business,” he said in a speech in Sydney on Thursday.
“It doesn’t work on a basis of understanding that to drive the economy and to do some of the ‘pet projects’ which are very good pet projects [like] the disability scheme you actually need to work with business to get the right policy settings.”
I’ve made plain my dislike of this government, but not for the reasons outlined by Mr Maxted. On the contrary, the Labor government since 2007 has failed because it has offered a far too ready ear to unions and business.
For instance, let’s recall just how “helpful” this government has been to Mr Maxted’s firm in the past five years:
The Government’s primary too-big-to-fail policy is the idled wholesale guarantee, which may have been paid for at the time (but was far too cheap) and has not been paid for ever since, despite contributing to a 2-notch upgrade in bank credit ratings. There are any number of other policies that can be seen in a similar light: RBA CLF, covered bonds, free deposit guarantees, dwelling purchase incentives, RMBS purchases, high immigration and changes to FIRB rules, fiscal incentives for property investment, highly opaque capital rules and policing, and on it goes.
We’ve been so helpful that there’s hardly a market worth its name left.
And that’s the point. I actually agree that some loosening of new industrial relations laws is in order. But it’s absurd to paint this government as anything other than a complete patsy for business. The banks were saved. The miners set their own tax rates. Various iterations of carbon pricing have been debauched by giveaways. Car manufacturers have been supported.
It is not the job of government to listen to unions or business. It is the job of government to create frameworks for functional markets and to intervene if they fail.
