It is time for government to get the suits back under control and manage the economy for the benefit of us all.
When my brain was switching to idle on my recent break, I thought of two central questions. First, for whose benefit is the economy being run – a handful of company executives at the top, or all the rest of us? Second, despite all the hand-wringing over our lack of productivity improvement, would it be so terrible if the economy stopped growing?
Then the whole Qantas affair reached boiling point. So we’ll save the economy’s growth for another day. You’ve probably heard as much as you want to know about Qantas and its departed chief executive Alan Joyce. But Qantas’ domination of our air travel industry makes its performance of great importance to our lives. And Qantas is just the latest and most egregious case of Big Business Behaving Badly.
We’ve seen all the misconduct revealed by the banking royal commission, with the Morrison government accepting all its recommendations before the 2019 election, then quietly dropping many of them afterwards.
We’ve seen consulting firm PwC caught abusing the trust of the Tax Office, with further inquiry revealing the huge sums governments are paying the big four accounting firms for underwhelming advice on myriad routine matters. We’ve seen Rio Tinto ‘‘accidentally’’ destroying a sacred site that stood in its way and, it seems, almost every big company ‘‘accidentally’’ paying their staff less than their legal entitlement.
Now, I’m a believer in the capitalist system – the ‘‘market economy’’ as economists prefer to call it. I accept that the ‘‘profit motive’’ is the best way to motivate an economy. And that the exploitation of economies of scale means we benefit from having big companies.
But that doesn’t mean companies can’t get too big, nor that all the jobs and income big businesses bring us mean governments should manage the economy to please the nation’s chief executives. It should go without argument that governments should manage the economy for the benefit of the many, not the few. The profit motive should be seen as just a means to the end of providing satisfying lives for all Australians, including the disabled and disadvantaged.
We allow the pursuit of profit only to the extent that the benefits to us come without unreasonable cost. Business serves us; we don’t serve it.
In other words, we need a fair bit of the benefit to ‘‘trickle down’’ from the bosses and shareholders at the top to the customers and workers at the bottom. That’s the unwritten social contract between us and big business. And for many years, enough of the benefit did trickle down. But in recent years the trickle down has become more trickle-like.
This is partly explained by the way the ‘‘micro-economic reform’’ of the Hawke-Keating government degenerated into ‘‘neoliberalism’’ – the belief that what’s good for BHP is good for Australia. This would have been encouraged by the way election campaigns have become an advertising arms race, with both sides of politics seeking donations from big business.
Another cause was explained by a former Reserve Bank governor, Ian Macfarlane, in his Boyer Lectures of 2006: ‘‘The combination of performance-based pay and short job tenure is becoming increasingly common throughout the business sector … It can have the effect of encouraging managers to chase short-term profits, even if long-term risks are being incurred, because if the risks eventuate, they will show up ‘on someone else’s shift’.’’
The upshot of neoliberalism’s assumption that business always knows best is to leave the nation’s chief executives – and their boardroom cheer squads – believing they’re part of a commercial Brahmin caste, fully entitled to be paid many multiples of what their fellow employees get, to retire with more bags of money than they can carry, and to have politicians never do anything that hampers their money-grubbing proclivities.
Their Brahminisation has reached the point where they think they can break the law with impunity. They’re confident that corporate and competition and consumer watchdogs won’t come after them – or won’t be able to afford the lawyers they can.
Chief executives for years have used multiple devices – casualisation, pseudo contracting, labour hire companies, franchising – to chisel away at workers’ wages. And that’s before you get to the ways they chisel their customers.
The fact is that the error and era of neoliberalism are over, but the Business Council and its members have yet to get the memo. They continue to claim cutting the rate of company tax would do wonders for the economy (not to mention their bonuses) and that the Albanese government’s efforts to protect employees would make their working arrangements impossibly ‘‘inflexible’’.
But the more Qantases and Alan Joyces we call out while they amass their millions, the more the public wakes up, and the more governments see we want them to get the suits back under control.
First published in The Sydney Morning Herald September 13, 2023