How business groups dominate our politicians

The Grattan Institute has released analysis on which groups hold the most influence over Australian policy making. And not surprisingly, the business lobby dominates:

As Figure 2 shows, the financial and professional services industries together represented 57 per cent of the 400 submissions to the Tax White Paper from organisations, despite collectively representing only 18 per cent of the economy. These types of businesses tend to be most familiar with the tax system – after all, tax advice is a big part of what they do. But the flip side is that they also have a larger vested interest than most.

Highly motivated and well-resourced interests have greater capacity to organise and contribute to policy review processes. And this can translate to policy influence. Our research shows that Australia’s checks and balances on influence are weak, and that sometimes bad policy is made or good policy is dropped because powerful groups have more say than they should. As Figure 3 shows, researchers at the ANU have found that business groups are more than twice as likely to be mentioned in parliamentary debates as any other type of interest group – a sign of prominence and likely influence.

Australia’s tax and transfer system affects each and every one of us. Unless our politicians and public servants actively seek out other voices, they won’t get a representative view. Governments should boost countervailing voices through more inclusive policy review processes and by supporting advocacy for under-represented groups. This would give politicians better information with which to adjudicate the public interest.

Rent-seeking has become a national sport. Because for many companies, money spent on lobbyists is likely to be a better investment than anything else.

We see the impacts everywhere, from housing, to banking, energy and superannuation.

It is not sustainable in the long term, bad for consumers, bad for competition and bad for the fabric of society.

Leith van Onselen

Comments are hidden for Membership Subscribers only.