The attributes needed to run a successful business include intelligence, relevant knowledge, perspicacity, foresight, an eye for opportunity, willingness to take a calculated risk, skill in innovation, perseverance, and guts. Australian businessmen have these in spades. In simple terms, they are smart. Yet from what we as outsiders can see, they seem to be willing to accept the damaging rhetoric about our economy that Tony Abbott, Joe Hockey and the Coalition front bench serve up day after day, with scarcely a murmur of concern, with almost no query about its validity, with no protest about its applicability, with no reservations about its effect on our economy and on the businesses they run.
As detailed in Abbott and Hockey are endangering Australian business
, Abbott seems to be able to talk down the economy with impunity, thereby imperiling Australian businesses, without one word of condemnation from businessmen, without even a whisper of caution from them. Why is this so?
It is hard to believe that their silence is because they believe the rhetoric and accept the validity of the claims, as clearly many of them are preposterous and demonstrably untrue, the dire effects of the carbon tax being an obvious example. There must be other reasons.
It should not be surprising to anyone that businessmen who support entrepreneurship, free markets, competition, light regulation, minimal red and green tape, ‘flexible’ industrial policy, small government, and low taxes, find themselves attracted to Liberal policies that espouse these elements, although not necessarily following them in government. But that does not explain why they allow Abbott, Hockey, Robb and Cormann, the Coalition’s finance spokesmen, to continually talk down the economy, depress consumer confidence, imperil their businesses in the process, and put a brake on their own confidence, which is now lower, much lower than that of the consumers.
I shall attempt to tease out some explanations that I believe may be operating. Many businessmen are Coalition supporters
One explanation is that some businessmen are such rusted on Coalition supporters, such entrenched Labor antagonists, that their support for the Coalition is unconditional. An example that springs to mind is Marcus Padley of the Marcus Today Newsletter
, whose gloomy reports and prognostications about the stock market on ABC Radio every weekday are liberally sprinkled with overt anti-Government sentiment.
Unconditional support is the only explanation I can muster to explain how they can endorse the bumbling, foot-in-mouth, disingenuous Leader of the Coalition, with his overt ignorance of economics, his policy deficits, his shonky costings, and his policy ineptitude in the few areas he has already defined, his Direct Action Plan for climate change being a classic instance.
Some of course may not be unconditionally supportive, but because they accept the predictions of commentators on polls of voting intention that the Coalition is a shoo-in at the 2013 election, believe it is prudent for them to say nothing that would get them offside with what they expect to be the next government, from which they would be seeking favours, policies congenial to their business, and a leg-up when in strife. Perhaps they should pay more attention to polling trends that show a steady narrowing of the gap between the Coalition and Labor. Perhaps they should seriously contemplate the possibility of the Government being returned. If and when they do, they may be more inclined to call out Abbott and Co. when they make outrageous statements. Some businessmen are rent-seekers
Another explanation of the reluctance of some businessmen to criticize the Coalition is that they are rent-seekers who want the Government to ease their burden as we saw when the carbon tax and the MMRT were introduced. Wanting the taxes removed or reduced, advocates were out in numbers with advertisements on TV and in the papers condemning these initiatives. Mitch Hooke of the Minerals Council led the charge, soon joined by Gina Rinehart, Twiggy Forrest and Clive Palmer, the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Business Council of Australia and other employer organizations, all predicting economic disaster for businesses in the wake of the taxes. The carbon tax was about to disrupt, dislocate, and destroy businesses across the nation. As Tony Abbott opportunistically jumped in with a vow made in his own blood that these taxes would be repealed should they elect the Coalition to office, the rent-seekers rallied to his support.
No businessman wants to pay more tax, although some willingly do so for the common good. But there was little concern shown by the rent-seekers for the common good. They simply wanted the taxes removed, and spent millions in advertising to this end, and to hell with the rationale behind the taxes: to reduce pollution and spread the benefits of the mining boom. The spectre of the slaughter of the many geese that were laying the golden eggs was raised before the eyes of the electorate. Apprehension was engendered and scare campaigns mounted of massive job losses, exploding unemployment, and whole industries and towns wiped out.
The rent-seekers were smart. They knew full well that their campaign was disingenuous, but self-interest trumped the common good. Their colleagues in other areas of industry and commerce also knew that their campaign was self-serving, but did they raise a murmur? No. As Ross Gittins put it in his article: What business needs to learn about politics “…big business won't get far until it abandons its code of honour among thieves. That is, when one industry goes into battle with the government to resist a new impost or get itself a special concession, all the other industries keep mum, even though they know the first industry is merely on the make.”
That’s exactly what they did – kept mum. Referring to the MMRT, Gittins continues: “Big business looked the other way as the three big miners connived with the opposition to destroy the Rudd government. Its reward was to have its precious cut in company tax snatched away.”
The colleagues of the rent-seekers could have voiced their concern about one section of the economy seeking benefits at the expense of other sections and the common good. But they chose silence, and thereby gave tacit support to their colleagues and to the party that was promising repeal, the Coalition.
So here is another explanation of why businessmen seem to swallow the ‘talking down the economy’ rhetoric of Abbott/Hockey/Robb/Cormann without a protest, without a murmur, without so much as asking them to tone down the talk that is damaging their businesses day after day, week after week. They are part of the industrial/commercial club that sticks together, that exhibits the age-old ‘honour among thieves’. Unfortunately, it is the public’s rights and benefits that are being thieved. Indifferent relationships exist between business and government
Writing in The Australian
, John Durie
attributes the adverse attitude of some businessmen to PM Gillard and her Government as due to the business community coming to grips with a flat economy that is a tough grind. He noted that some businesspeople are still smarting from policy changes and feel they have borne the brunt of tax changes, including the latest plans to bring forward payments.
He went on to say: “Big business isn't perfect and government bitterness is understandable after watching the big miners in open revolt over the tax changes. The public attacks on the government have died down as the better operators understand no one likes being slagged in public, so if they want to deal with the government it is better to be more cordial. They just wish Gillard would respond on the same terms.”
Durie conceded that the Asian Century white paper was welcomed as it offered a potential bridge between the two sides after a rocky relationship, but at the Business Council's annual dinner last week, he asserts that: “Gillard missed a chance to engage with a broad cross-section of business, welfare groups and community leaders.”
He reported that: “Businesspeople say that in individual meetings Gillard is completely different, engaged and interested, but before big business audiences she speaks right over the top of them, apparently to a different audience…Just as she did last year, she used the occasion to lecture the audience rather than engage a genuinely open audience.”
Whether or not Durie is correct in laying the blame for this dissonance at the PM’s feet, it does seem that some businesspeople do. This is yet another explanation for the willingness of some to hold their tongue when Abbott and Co. are on their negative rampages, talking down the economy at the expense of business. Their antagonism to PM Gillard at the one time encourages them to be critical of her and her Government, while inhibiting them from being critical of the Coalition.
So there it is. Although it is very doubtful that businessmen really believe the rationale of Tony Abbott and his finance colleagues when they talk down the economy, they exhibit a regrettable reticence to pounce on them. Yet when that happens, people defer discretionary spending on their homes and cars, cut back on luxury items, use their clothes a little longer, shop online, eat out less often, take their own lunch to work, defer that holiday, pay off the credit card, reduce the mortgage, and save for the rainy day. And as they do, business suffers. Retail sales decline, restaurants languish, coffee/sandwich shops have fewer takers and some close, travel agents lose business, airlines have fewer flights. All of this distresses businesspeople, erodes profits, reduces dividends, diminishes stock prices, forces closures and bankrupts some, and results in personal dismay and depression. Yet, the business community stays mute.
A reasonable reaction would be to shout from the rooftops: “Shut your mouths Abbott, Hockey, Robb, Cormann, your scaremongering is frightening people; your doom and gloom is driving customers away, it’s killing our business, sending us broke, and driving shareholders to desperation as their pensions erode and their dreams of comfortable retirement evaporate”.
But they say nothing. Why oh why?
Several explanations for this extraordinary behaviour are offered: Many businessmen are Coalition supporters and won’t criticize their own. Others, believing that the Coalition will form the next government, out of self-interest refrain from disapproving their behaviour.
Some businessmen are rent-seekers and because they need the Coalition’s support, will not criticize. Honour among thieves inhibits other businessmen from entering the debate.
Indifferent relationships between business and the current government restrain some businessmen from criticizing the alternative government.
You may have other explanations for this astonishing unwillingness of businesspeople to insist that Abbott and Co. stop talking down our economy, the envy of the developed world, and stop wreaking havoc with their businesses.
What do you think?