Saturday, December 13, 2008

Business plays the patsy

What are business organisations for?  Do they exist so their chief executives can sit on government advisory boards and have afternoon cocktails at the Lodge?  Or is their purpose to forthrightly represent the interests of enterprises and employers?  If the answer is the latter, then lately the performance of the nation's business organisations has been none too brilliant.

Nothing in Canberra is more predictable (and, in a sad way, amusing) than seeing peak industry associations giving wholehearted support to Australian Labor Party policies only to later complain when things don't go as planned.  As yet no business organisation boss has admitted to their membership:  "Oops, I got it wrong, we've been done over -- maybe next time I won't be quite so eager to ingratiate myself with the government."

Politically, full credit must go to the Prime Minister and his ministers.  Labor has played the business lobby brilliantly.

And it hasn't been too bad at managing the other lobby groups either.  A week ago Julia Gillard as Education Minister gave a press conference flanked by representatives of Australia's Catholic and independent schools.  Gillard handed over $28 billion, and in return the schools endorsed a national curriculum that hasn't been written.  Not even the ACTU gives Labor that big a blank cheque.  On two of the big issues of the Rudd government's first year -- climate change and industrial relations -- business has either gone missing or been complicit in the making of bad policy.

First there's the emissions trading scheme.  Exactly how bad it will be we'll know next week when the government releases its white paper on the issue.  The fact that no one knows how the scheme will operate and what it will do to the economy didn't stop business organisations from welcoming Labor's ETS plans before the federal election.

For example, yesterday the Australian Industry Group suggested the ETS should be delayed until the economy recovered.  It acknowledged that in the current environment the last thing any company needed was a new regulatory burden and an extra cost impost.  This is not what Ai Group was saying six months ago.  In July it was still hoping for a 2010 starting date.

Industry associations, analysts, and for that matter most of the Australian media, have happily embraced a remarkable double standard.  In the wake of the global economic crisis they've all demanded greater clarity and transparency from financial markets.  Rightly or wrongly, the claim is that a reason for the near collapse of the world financial system was because no one could understand the financial instruments they were buying and selling.  Yet the very same people who are demanding the world financial system be made understandable and predictable are also calling for the introduction of an ETS.

An ETS is many things but it is most definitely not understandable and its impacts are far from predictable.

Then there's industrial relations.  The impression allowed to be created by business organisations was that even though they would have preferred the coalition's industrial relations policies, on balance they could live with the Labor alternative.  The problem was that business didn't actually know what the Labor alternative was.  When business found out it was too late.

Kevin Rudd and Gillard flattered business by saying they would consult on the new legislation.  They kept their promise and they consulted.  Their strategy worked.  Business has been kept quiet and quiescent for 12 months.  What the business organisations didn't appreciate (or didn't want to appreciate) was that a commitment to consult is not a commitment to do anything.  Business can talk all it likes to Labor, but it won't change Labor's resolve to introduce good faith negotiating requirements, to allow pattern bargaining, and to authorise union officials to have unprecedented access to individuals' private records.

The only thing that will change Labor's mind is political pressure.  However the path of applying political pressure is precisely the path that the business organisations have forsaken.  Labor's legislation is likely to pass the parliament early next year.  If business wants to mount a political campaign against the legislation it has only a few months to do so.  In any case, complaints from business organisations sound somewhat hollow because for a year they've been telling their members and the public not to worry.

2009 is going to be a great deal more difficult than 2008.  We can only hope business puts in a better performance.


No comments: