Corporate bullies

Feb 14, 2013

Public debate and the development of good policy are being steadily corrupted by the success of powerful lobby groups to quickly close down debate and force retreat by the government. This tactic is assisted by a timid government and a media that has little understanding of policy issues, and is only too prepared to recycle the handouts from powerful groups.

Last week we saw this bullying in full view. The government floated the suggestion that the concessions handed out to wealthy retirees in tax concessions by Peter Costello in 2007 should be reconsidered. The superannuation lobby went into immediate attack. Pauline Vamos, the CE of the Association of Superannuation Funds in Australia said that for people to have a really comfortable standard of living throughout their retirement, they should have at least $2.5 million as the balance in their superannuation account. Ian McAuley has estimated that this would give the retiree a tax-free pension of about $160,000 p.a. Such a retiree would normally not have a home mortgage and the cost of raising children and their education.  In the face of this nonsense by Pauline Vamos and others, the government quickly retreated and said that it had no intention of taxing any capital sums in superannuation. Tax avoidance won the day, quickly and comprehensively.

In the SMH last week, Ross Gittins wrote about the ‘four industries that rule Australia’ – superannuation funds, miners, bankers and the gambling industry.  I would have added the health industry.

In 2009, the miners ran a highly successful and cheap advertising campaign ($22 million) to defeat the Rudd Government’s resources super profits tax. They also helped to get rid of the Prime Minister! The industry saved itself an estimated $66 billion over five years. We have now been left with a wimp of a mining tax.

In 2011, under pressure from Independent Andrew Wilkie, the government undertook to introduce strong legislation to help addicted gamblers. But the licensed clubs and the gaming industry went to work and won the day.

Ross Gittins has pointed out that through acquisition the four major banks have increased their market share from 74% to 83%. They make record profits and continually trouser additional savings by not passing on fully to customers the cuts in official interest rates.  They ignore both the treasurer and the shadow treasurer. They have real power.

Then there is the health lobby – the AMA, private health insurance and the Pharmacy Guild who successfully restrict competition, protect restrictive work practices or secure increased government subsidies. The public debate is about what the government needs to do to buy off the specialists, the pharmacists and the private health funds.

The lesson is clear; the large and wealthy groups with their lobbying power can derail public debate and secure concessions for themselves at the expense of the public interest. Too often the government runs for cover at the first whiff of grapeshot.

There is a public register that lobbyists must complete. It is quite inadequate. As a starter, the public needs to know who the lobbyists and corporations are seeing, particularly ministers, parliamentarians and senior members of the public service, together with the nature of those discussions. That information should be updated weekly. It would be a small but important step in making transparent how corruption of good policy is occurring.

John Menadue

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