The Old Alliance Of Liberals And Business Has Turned Uneasy

Written by:
21 July 2017
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On Wednesday, this newspaper’s chief political correspondent Phillip Coorey reported that at a private dinner in Sydney on Monday evening Prime Minister Malcolm Turnbull urged the leaders of big business to donate money to the Liberal Party and to do more to promote the government’s policy agenda.

Apparently a number of chief executives responded by questioning the PM as to precisely which parts of the government’s plans for higher taxes and more regulation he thought business should support.

Both sides have a point.

Chief executives have forgotten that, by and large, Coalition governments are better for their business, their shareholders, and their customers than Labor governments.

But Liberals should also realise that as government and government regulators get bigger and more powerful, the consequences for business leaders stepping beyond the bounds of consensus opinion increase exponentially.

For example, Treasurer Scott Morrison’s proposed “Banking Executive Accountability Regime” (quaintly called by the Treasury Department BEAR) gives the Australian Prudential Regulation Authority draconian powers to police corporate behaviour and intervene in internal management decisions.

The supposed justification for BEAR is that banks must conform “with community expectations”. One can speculate what might happen at some time in the future if ever APRA decided that the policy or political activity of a bank did not meet “community expectations”. In the years ahead it will be easier and simpler for bank bosses to not get involved in politics.

The imposition of new regulations like BEAR highlight the point the business bosses were making to the PM. At the moment, there’s not a great deal of the Turnbull government’s policy agenda that’s worthy of the support of big business – even if big business were inclined to give that support.

On the one hand the PM says he wants business to speak out, but when the banks ventured to say the Coalition’s bank tax was a bad idea the response was from the Treasurer was “cry me a river”.

The truth is that “multinational corporations” are no less a convenient whipping boy for Liberals as for Labor. The Turnbull government recently decided that it was appropriate use of taxpayer funds to insert in household letterboxes around Australia a brochure advertising its new Diverted Profits Tax and Multinational Anti-Avoidance Law. The brochure was headed “‘If a multinational corporation makes money in Australia, it’s only fair it pays tax in Australia”. The unstated assumption of the brochure is that multinationals don’t pay their fair share of tax, which is demonstrably false. The relevance of the law to most Australian households is zero. The only purpose of such taxpayer-funded advertising from a Coalition government is to reinforce the left-wing stereotype of multinational companies as selfish and greedy who don’t pay their taxes.

Yet on Monday night it was the bosses of these very same multinational companies from whom Malcolm Turnbull was seeking donations. So it should be no surprise that discussion over dinner between the PM and the CEO’s was described as “robust”.

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