JOHN MENADUE. Here we go again- attacking unions and ‘red tape’.

With no policy agenda and with the economy sagging, the Morrison government(‘We are the good economic managers’) intends to take us back to what Tony Abbott and Joe Hockey offered us six years ago, an attack on the trade unions again and less red tape.

Six years ago Tony Abbott led off with a Royal Commission on the unions as a curtain-raiser for changes in industrial relations and work rules that would appeal to employers.  Despite the best efforts of the Abbott government to determine the outcome of the Royal Commission and discredit the unions and the ALP. It  failed. Julia Gillard and Bill Shorten got through largely unscathed.

Now the Morrison government sees John Setka of the CFMMEU as a god-given opportunity to indulge their business friends again and seize the opportunity to attack the trade union movement more generally. This is at a time when the scales have already been tilted heavily against trade unions and when the unions are  at their weakest for a hundred years.  One reason for the growing inequality in incomes and wealth is the declining influence of the trade unions.

To focus on red tape, Tony Abbott established a Commission of Audit headed by friendly business man Tony Shepherd. A key recommendation of this wasted effort was ‘reducing red tape’. As a result many regulations designed to to protect the public interest were removed or degraded. The Coalition wanted,more opportunities for powerful business interests to exploit their position.

Scott Morrison now  also talks about reducing ‘red tape’ to ‘clearing the arteries’ in the economy which will allow business to get on with its job.  He said ‘While reducing taxes has had a major impact in the US, it was actually  Trump’s commitment to cutting red tape and transforming the regulatory mind set of the bureaucracy that delivered the first wave of improvement in the economy’. Reducing red tape is really code for giving some employers an opportunity to rip off workers and the public even more.

So many in business today put their effort into lobbying  for government favours  like rolling back regulations instead of raising the productivity of their businesses.  They refuse to ‘stick to their knitting’. They are continually knocking on the government’s doors for more favours .

Whilst unions are heavily regulated corporate regulatory and supervisory failure are everywhere.

Just look at a few recent and glaring examples of failed or misplaced regulation.

  • In vocational employment we have seen widespread waste of public money and exploitation of vulnerable young people as a result of regulatory failure..
  • As Charles Livingstone, in this blog, has pointed out, Crown Casino, other casinos and club and betting interests are just too powerful to regulate. Fines for breach of regulations are miniscule.
  • The failure of  regulations and regulators in nursing homes has exposed our senior citizens to abuse and death.
  • Regulators failed to protect the Murray-Darling Basin from blatant water theft.
  • Dodgy entrepreneurs in child care received large payments for children they never cared for.
  • Fair Work Australia and other regulators have failed to protect mainly young people, particularly working holidaymakers and students who have been exploited by labour-hire companies. The Seven/Eleven chain has become a symbol of failed regulation in the labour field.
  • Live sheep exporters brazenly defy regulations to protect animals.
  • Land clearance regulations to protect vegetation are widely ignored.
  • Regulations to ensure that miners repair degraded land are seldom effective.
  • And then there are the banks  at the top of the list with their lying to clients, their deceit and greed.  Donation to major partied encouraged ministers and regulators to look the other way. The banks knew that the regulators would not seriously challenge them. They felt invulnerable
  • The Coalition has shown us how politics rather than policy determines its approach to regulation. It proposed Soviet style intervention to force investment in high cost and polluting coal fired electricity generation. And Angus Taylor still keeps his job!
  • Most recently in Sydney we have seen shonky developers  and builders in Mascot Towers and Opal Towers cutting loose at the expense of owners. Where were the regulations and the regulators?

Why has corporate regulation failed?

  • A major cause of failure amongst ministers and  regulators is the prevailing ideological view expressed by the Coalition and big business that only business can deliver prosperity and jobs for Australians. Business, therefore, deserves favourable treatment. The Liberal Party platform expressly states that ‘only businesses and individuals are the creators of wealth and employment’. In ingratiating her way into a new business career Julie Bishop now also tells us that ‘I’ve long believed the private sector is the key to lifting living standards and economic development’ . With this view it is not surprising that they believe that if businesses are to perform their role effectively, government and regulators must get out of the way.  Timid regulators who want to please read these  signs. Yet the evidence is clear that in our mixed economy there are key roles for both business and government,
  • Unlike the ACCC which has been a tough cop on the beat, ASIC and APRA, even with their considerable powers, have failed as effective regulators. Far from being tough watchdogs, APRA and ASIC became compliant puppy dogs who were  anxious to please. ASIC has power to launch criminal and civil prosecutions against corporations. But for 15 years it chose not to. Instead of prosecuting, offenders were obliged to sign ‘enforceable undertakings’ for serious breaches of regulations. No one went to goal.The regulators imposed fines that would not cause any big company to even blink. The CBA admitted to ‘unconscionable conduct’ in rigging the bank bill swap rate in 2012.  The penalty was a derisory $25 million. Only lengthy gaol sentences will deter many of our greedy and dishonest corporate cowboys . These are the people who kept telling us time and time again that it was the fault of a few ‘bad apples’ and in any even,t the problems had been fixed. But the problems continued and they continued to pick up outrageous salaries.
  • Any problems were invariably found to be attributable to the lower ranks and seldom the Board or CEO. The multi-million dollar bonuses, handshakes and golden-parachutes continued.
  • There were comfortable relationships between regulators and the regulated. Some of the key bank regulators on retirement from Treasury and the RBA moved across to well paid jobs with the banks. It was all a cosy bankers club.
  • Too much faith was placed in efficient markets, so light or even self-regulation was preferred. After all the regulators obviously felt that they were all members of the same trustworthy family.
  • The fundamental problem is timid regulators who want to please their ministers with their conservative political ideologies and the big end of town.

The ‘system ‘is loaded in favour of  powerful  vested interests.

So called ‘red tape’ is essential to protect the public and particularly the most vulnerable. ‘Green tape’ is vital to protect our planet and our environment

But now Scott Morrison in league with the powerful wants to give banks and other business mates such as the Property Council more space to act in anti social ways. We learned that they could not be trusted.

Tony Abbott’s and Joe Hockey’s attacks on unions and rolling back ‘red tape at the behest of the big end of town served Australia very badly. Scott Morrison wants to try it all again and give the greedy inside running once more. Will he ever learn?

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John Menadue is the publisher of Pearls & Irritations. He has had a distinguished career both in the private sector and in the Public Service.

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