Christopher Niesche: Unease reigns between Aussie Govt and business lobby

The failure of Malcolm Turnbull's government to raise GST above 10 per cent has caused friction with the business lobby. Photo / AAP
The failure of Malcolm Turnbull's government to raise GST above 10 per cent has caused friction with the business lobby. Photo / AAP

Australia's Liberal Party and the business community have been allies since the party was founded 70 years ago.

And so they should be.

The Liberals stand for smaller government, lower taxes and support for business, and its members are drawn mostly from for the private sector.

While the differences have narrowed over the years, Labor remains a different beast altogether. Labor is a creation of the trade union movement and that remains in its DNA.

It may have achieved many things for the workers and the underprivileged over the years, but if business is to pick sides, it won't be Labor.

Nonetheless, for the past few months, some Liberal figures have been at loggerheads with the country's main business lobby group, the Business Council of Australia.

"The BCA have failed to make any impact on the government or the public debate, these people have got no idea how to influence public opinion," said Michael Kroger, a businessman, a member of the Melbourne establishment and a Liberal Party powerbroker.

What brought the issue to a head was the failure of the Malcolm Turnbull government to raise the GST above the level of 10 per cent.

Like other leaders before him, Turnbull quickly backed away from the challenge fearing a backlash from the electorate.

Kroger went on: "The BCA has been failing for years to influence the public debate, so unless groups like the BCA can start getting out of their slumber and influencing the debate, it doesn't look like the government will be increasing the GST."

The BCA in turn, blamed the politicians, with its chief executive Jennifer Westacott saying tax reform "runs the risk of being the latest victim of Australia's dysfunctional political debate".

The BCA wants the GST increased from its current rate of 10 per cent so that other taxes can be cut. It is an idea some in the government would also like to pursue, but the government has been unable to move past the scare campaigns from Labor and the unions whenever the issue is raised.

Kroger and others in the Liberal party feel is could have lent its voice to this debate and come out in support of the government.

The animosity between business and the government only increased during the recent election, when the BCA was missing in action, according to some Liberals.

The election pitted a party offering huge company tax cuts against another party that was promising to wage a war no business.

Yet barely a peep was heard from the BCA.

Figures within the BCA hit back, arguing its role isn't as a cheer squad for the government and accusing the government of blaming others for its own pool election result.

But this raises the question of whether or not the BCA should be taking part in the debate - and if the answer is no, then there is the question of why the BCA exists at all.

The business council was formed in 1983 after a merger of other industry groups and its aim was to present the big business case for economic reform.

As University of NSW lecturer in politics Lindy Edwards has written in a recent article: "In the early days it eschewed direct lobbying on its members' interests. Instead it operated more like a think tank focused on lifting the quality of public debate. It invested in blue sky research and developing a rigorous case for opening up and deregulating the Australian economy."

The group lobbied for reforms that it believed would benefit the entire economy, obviously including business.

Bob Hawke and Paul Keating were faced with a moribund, highly-regulated and inward-looking economy when they came to power and set about modernising it, in the same way that David Lange and Sir Roger Douglas did in New Zealand.

The reforms have paid great dividends in subsequent years, but caused a lot of pain at the time, including for many established business interests.

Nonetheless, the BCA was a valuable ally for Hawke and Keating in advocating for the reforms, even when the reforms weren't immediately in their members' interests.

It's hard to imagine the business group playing such a role these days. Instead of advocating for policies that might benefit the nation as a whole, the BCA is focussed solely on the interests of its individual members.

Its sole purpose seems to be to persuade the government to change rules and regulations in favour of its members or to give its members business assistance of one sort or another.

The self-interested approach comes as Australians are more cynical than ever about big business and its ethical standards, according to a survey by the Australian Governance Institute.

The Australian business community needs a strong and credible advocate, one which can take part in and help make the case for economic reform with the government and the electorate.

The Business Council of Australia is currently failing at this.

- NZ Herald

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