The BCA President, Tony Shepherd, was at it again on Wednesday 17 April at the National Press Club attacking the Government for many failures – a lack of focus, the need for politicians to sacrifice their jobs for the national interest and that old perennial of his, reform of the labour market. His comments were loudly supported by the Australian Financial Review which now reports on behalf of the business sector rather than about business.
In my blog on March 14, (‘Productivity and Skills’ see below) I drew attention to the failure of the BCA to make its case on productivity and labor market reform. I also highlighted that whilst the BCA wanted to upskill the Australian workforce, it didn’t think that it should upskill itself, having in mind that there is hardly a senior executive or board member of BCA’s top 100 companies who can fluently speak an Asian language.
It is true that the Government has not been performing well in recent months. Most of the problems are self-inflicted.
There are policy problems ahead, but Tony Shepherd is wide of the mark in much of what he says.
- Our partisan mining industry would not agree, but only a few days ago Behre Dolbear, a century-old and well-respected mining advisory firm based in the US, ranked Australia as the top country in the world for mining investment and activity. As the top-ranked country Australia was ahead of Canada, Chile, Brazil, Mexico and the US in that order. On the seven criteria that Behre Dolbear used for its ranking, Australia ranked equal first on its ‘economic system’; equal second on its ‘political system’; top on ‘social issues’; top on least ‘delays’ in decision-making; equal top on least ‘corruption’; equal top on ‘currency stability’ and an also-ran on ‘tax regime’. Overall it was a strong endorsement of Australia as the best place in the world for mining activity. I wonder if Tony Shepherd has read it!
- Three separate rating agencies – Standard and Poors, Fitch Ratings, and Moody’s – have all ranked Australia in the top eight countries with a triple A rating. Fitch Ratings was particularly complimentary about Australia’s economic management, a strongly performing economy, low public debt, a floating exchange rate, liberal trade and labour markets and with Australian banks among the strongest in the world. There are certainly reservations about rating agencies but Australia could hardly do better than the ratings most recently achieved
- Under the Rudd/Gillard Governments we have had six years of uninterrupted economic growth even through the Global Financial Crisis.
- Some of Tony Shepherd’s own member companies have not been performing well. The giants BHP Biliton and Rio Tinto have been badly managed, with world record write-offs of failed investments. Has Tony Shepherd taken them aside and told them to lift their game? What has he said to his colleagues about executive salaries and the need for sacrifice in the national interest?
- Interestingly the IMF reported in January this year that the most wasteful Government spending in Australia came in the Howard years. It was not during the governments of Whitlam, Hawke, Keating, Rudd or Gillard. Has Tony Shepherd read the IMF report?
In Japan last week I heard from many people their admiration about the strength of the Australian economy, particularly compared to their own. What the Japanese couldn’t understand was how the Australian Government was in political trouble.
Last month Ken Henry criticized the quality of public debate in this country. I am sure Tony Shepherd’s contribution would not have changed his mind.
We could do with a lot more rigorous policy analysis by the BCA