Four business lobby groups, the AiG, ACCI, MCA and BCA have united in a grand call for a change of national direction in tomorrow’s Budget.
The call comes via the big business propaganda sheet, the Australian Financial Review. The paper’s editorial summarises the view:
The politics of short-termism and division were undermining the capacity of business to generate continued national prosperity.
True enough. We certainly need long term thinking about how to ride through the end of the mining boom and post GFC environment. Sensible suggestions would include:
- lowering the dollar through fiscal and monetary intervention
- recalibrating fiscal incentives towards boosting tradable sectors
- plugging the holes in the mining tax
- tax and banking reform lowering property incentives and decreasing moral hazard
- directing a national policy agenda towards productivity
- forgoing surplus politics and increasing investment in productivity directed public investment
- industrial relations reform pushing back recent Labor encroachments
- pursue carbon pricing as the most efficient means of addressing climate change
That’s a pro-business reform shopping list that would transform Australia from a complacent commodity and property speculators into something more resembling a dynamic and export oriented nation with a plan to save civilisation.
Here’s what “business” wants”. From the BCA:
Business is aghast that Labor has allowed the budget to deteriorate so alarmingly, concerned that more big spending programs are being promised outside the capacity of existing taxes to fund and worried that new imposts will be placed on productive enterprises to help pay for it all.
That boils down to no more taxes. And:
Moreover, business is concerned that Labor has fundamentally misread the lessons of the global financial crisis. As the Minerals Council’s Mitch Hooke argues, Australia avoided a GFC recession because of three decades of open market reforms that previously helped us get through the 1997 Asian financial crisis and the early 2000s Wall Street tech wreck, not because of Labor’s short-term budget stimulus. But, as the ACCI’s Peter Anderson argues, the resulting complacency is now colliding with the realisation that Australia’s GFC adjustment was merely delayed. The strong dollar Wayne Swan blames for blowing a hole in his budget is not a freakish occurrence. It is the structural result of the new global order, centred more on China and Asia, that has emerged from the crisis. We can’t now count on a sharply weaker dollar to help cushion the economy as it did in the Asian crisis or the tech wreck.
Yes, Labor has misread the post GFC environment. And there were mistakes in the stimulus package but let us make no bones about this: it saved Australia from recession. Without it much higher unemployment would already be here despite the mining boom. If it has just been delayed by four years then government can hardly be blamed for doing so.
No fix for the dollar is the single most ridiculous statement by the group. Instead, “business” wants:
The business groups want the next government to pursue genuine tax reform, including options excluded by Labor such as the goods and services tax. They want to junk Labor’s carbon tax and are open to reviewing Australia’s entire approach to climate change. And, while they complain Labor has taken workplace regulation back to before 1996 , they accept it would take time for a new government to reverse the damage. Most of all, they want a return to proper policy process that understands the nature of wealth creation and is backed by the political authority of a parliamentary majority.
Raising the GST is not tax reform, it is raising the GST. I actually agree with it and with no new taxes for wider business. But let’s be clear here, real tax reform is not about reducing taxes per se. It is about having the most efficient tax system possible that creates the right incentives for investment and productivity growth.
In other words, real tax reform would cut into the exorbitant margins of the great mining and banking rentiers that control Australia to the detriment of every other business in the country. I wonder why we don’t see any of those on the list?
The claim about workplace relations is true and the final statement about policy process is also true insofar as Labor’s habit of announcing policy and then letting rent seekers bash it out of shape in public doesn’t work. Somehow I think what this group has in mind is a simple hotline to the PM with a veto over reform. Here’s an idea for clear policy reform: ban lobbying.
In summary, what we can say about this cluster of lobby groups is that:
- it would like to see the nation pursue the proven folly of a Greece-like path of internal devaluation to public surplus
- it would like us to do so without causing the slightest harm to their profits
- it would like government to direct policy through itself
- it has no appetite for the real reform that will boost productivity
- the hapless ACCI and AiG are in bed with their real enemies and don’t even know it
- it would like to see the end of human civilisation
If there was ever a less economically literate, more self-centred, less Australian, and more protected set of lobbyists I can’t recall it. This is not business leadership, it is rent-seeking 101.
We may well have a public sector leadership void in this country, but make no mistake, the private sector leadership void is its perfect dance partner.
