Not one but three messages reverberated from the Abbott government’s cabinet decision yesterday to reject a request from iconic Australian fruit-processing company SPC Ardmona for $25 million assistance.*
Both Prime Minister Tony Abbott and Industry Minister Ian Macfarlane stated in no uncertain terms that the decision was a message for business that the days of government being a crutch for business were over. Labeled “an important marker” by Abbott and a “defining point” by Macfarlane, the rebuff signaled that industry restructuring should be led (and, by extension, resourced) by business alone.
Doing as much as possible to deflect any inferred responsibility for jobs lost through the decision, Abbott made a big play on the size, profitability and social conscience of SPC’s parent company, Coca-Cola Amatil. He expressed confidence that the multinational would do the right thing by the canning company and its workers.
And for the second time this week, the government also drew attention to the responsibility of companiesto strike wage agreements with unions that do not threaten their business’s sustainability over time. This is part of a strengthening government homily that companies must take more responsibility for their actions.
However, the big dose of tough love for the ever-demanding Australian business community will likely give little comfort to the recipients of the second message. Taken together, the Cadbury and SPC Ardmona decisions starkly tell voters one thing: some jobs are more equal than others.
Yesterday the Prime Minister rationalised the Coalition’s 2013 election campaign decision to support Cadbury with $16 million in assistance as development of “regional tourism infrastructure” and not simply propping up another struggling business. But at the time he seemed particularly focused on the continuing viability of Cadbury in Tasmania and the 200 jobs that the factory upgrade would add to state’s depressed economy.
The key to this apparent contradiction lies in votes – or more precisely seats in the federal parliament. The SPC Ardmona facility is nestled in the very safe Liberal seat of Murray, which Sharman Stone holds with a whopping two party preferred vote of 70.87 per cent. This healthy margin gives Stone some latitude to be a rebel at times, but it also means the Coalition can treat Murray’s voters with impunity without risking a backlash that bites. In fact the Abbott government could probably slay every first male child in the electorate and still retain the seat.
In contrast, the Cadbury factory is located in Andrew Wilkie’s Tasmanian seat of Denison, and is supplied by the dairy industry in the adjacent seat of Lyons. Not coincidentally, Liberal candidate Eric Hutchinson went on to take Lyons at the 2013 election from Labor’s big man Dick Adams with an almost 14 per cent (two party preferred) swing in his favour.
So the SPC Ardmona decision revealed that if you live in a marginal seat or one represented by a potentially influential independent MP, your job is important to the Coalition. Otherwise, not so much.
Finally, the decision not to protect the jobs of canners and, by extension, their fruit-producing suppliers, sent a decisive message to the Nationals: you can’t always get what you want.
Even though it remains perennially puzzling why this rural rump of agrarian socialists wields greater influence on Coalition decisions than its total vote or number of seats in parliament, they continue to do so. Most recently they were successful in convincing Treasurer Hockey to reject the $3.4 billion foreign takeover bid by US agriculture giant Archer Daniels Midland for local grain-handler GrainCorp. The “national interest” grounds on which he did so were spurious at best and sent a ripple of unease through the business community.
But now a similar public campaign in support of assistance for SPC Ardmona by Agriculture Minister (and deputy leader of the Nationals) Barnaby Joyce has failed. It may be that the Nationals expended their political capital on keeping the Yanks’ hands off our grain-handling infrastructure, or that any preparedness by the free traders in Cabinet to countenance further protectionist assistance for Australian businesses was consumed entirely by the GrainCorp decision. Perhaps it was simply because there are more marginal votes in the grain belts of rural Australia than in Murray.
Either way, the messages conveyed by yesterday’s SPC Ardmona decision may prove counterproductive for Tony Abbott. While he sees them as “an important marker” and a veritable line in the political sand, the message recipients may see them more as a challenge, an ultimatum and a call for retaliatory action.