Business lobby is full of false bravado

Business leaders may like to feel all-powerful by pressuring the Government for reform, but if there isn’t public support or political capital to back it up then they’re just shouting into the wind.

The Canberra lobbying world has a dirty little secret: business just doesn’t get politics, and the industry is built on that ignorance.

More often than not, the disconnect between business and political reality isn’t much of an issue. Lobbyists wheel their naïve clients through politicians’ offices and are paid handsomely for what is little more than glorified door-opening. In return, the business figures feel influential even though they’ve done little more than whinge to a marginally relevant MP.

Meanwhile the real lobbying work goes on elsewhere in Canberra, not in the shiny marble halls of Parliament House but in far less glamorous surrounds, where myriad departmental officials actually develop and implement policy for their political masters. Lobbyists who want to deliver real policy outcomes, rather than simply act as political matchmakers, focus their efforts at this level.

But because door-opening is a relatively easy and considerably lucrative business, lobbyists often do very little to dissuade their business clients from the delusion that a few words in a politician’s ear is all that’s needed to get a favourable policy.

This can lead to the business sector – particularly the big end of town – believing it can muscle in on a government’s agenda regardless of the political issues at stake.

A good example is the recent call by senior businessman Roger Corbett for a double dissolution electionto overcome the “obstructionist” Senate. One would think that as a member of the Reserve Bank board and chairman of Fairfax Media Corbett would have a workable grasp of our political system.

However, if he did, Corbett would know that a DD election would likely increase the fractured nature of the Senate. The reduced quota for election to the upper house could result in even more independent, micro and minor party candidates being elected. Not to mention, of course, that on current opinion poll ratings, an election at this time would also see the defeat of the Abbott Government altogether.

Even if we set aside Corbett’s politically impractical call as the wishful thinking of an overly enthusiastic Liberal Party member, there are significant other examples of the business community simply not coming to grips with political imperatives.

Take the blink-and-you-might-miss-it declaration from the “group of nine” business groups earlier this month, which essentially accused current political leaders of cowardice for backing off on economic reform, saying: “Past giants of economic reform did what was right for the long-term benefit of Australia and not because it was politically expedient – it rarely ever was.”

Like Corbett, the business leaders that put their names to the statement have either deliberately ignored or simply missed the point. It was at least partly at the business community’s behest that the Abbott Government’s first budget went in so hard on economic reform. But only the Government has had to shoulder the community’s opprobrium since for doing so.

Even now, as the Government continues to struggle in the opinion polls after delivering the most unpopular budget in recent history, business continues to push it for policy changes that would amount to nothing short of electoral suicide if adopted in the current political environment.

Top of their wish list is workplace relations reform, yet only a government comprised of madmen or fools would propose this at a time when the unions’ successful WorkChoices campaign is still relatively fresh in the minds of Australian voters.

The other key reform being sought by business is tax reform, namely a cut in the corporate tax rate. This is behind the business push for an increase or broadening of the GST, which would improve the Government’s budget bottom line and consequently make a corporate tax cut more palatable to the broader community.

One of the principal business lobby groups, the Business Council of Australia, has even gone so far as to commission market research from Liberal Party pollster Crosby Textor, suggesting that the 94 per cent of respondents who agree the nation needs a “better plan” for its long-term future means voters “accept the need for change”.

Even if that were true, the same research found 62 per cent “do not trust government to manage tax reform well enough to create a better system overall”.

This is the political reality that business must face: there is no point pressuring the Government to prosecute difficult reforms when the community either fears, distrusts or holds the Government in contempt.

As Crosby Textor co-founder Mark Textor explained in an interview over the weekend, political leaders like NSW Premier Mike Baird and NZ prime minister John Key are successful because they pass three threshold tests of trust with voters: Do I trust this person at his word? Can he do what he says in this political system? And, if this thing he wants to do goes wrong, is this person of a character that would care if someone slips through the cracks?

And in the absence of that trust? Textor says it needs to be co-opted from an unexpected but credible third party, such as when the Australian Council of Social Services backed the Howard Government’s campaign for the GST.

Reform-minded business leaders need to accept that it is pointless – if not counterproductive – to pressure a government to implement change that will result in electoral defeat. Even if such a government chose unpopular policy purity over political expediency, it’s likely a new incoming government would simply overturn the change to garner public support.

Calling Government MPs cowards for backing away from reform is not telling them anything they didn’t already know, but it’s still as useless as shouting into the wind. Business must accept that reform needs a level of trust in government that is currently missing, and that new coalitions of interest, involving sections of the community outside of business, must be formed to re-establish that trust.

It may make business leaders feel important and influential to berate the Government and grandstand for the media. But like lobbyists opening politicians’ doors for a living, doing so is nothing more than a pointless and hollow charade.

Baird victory not necessarily good news for Abbott

Much has been made in the past 48 hours of Mike Baird’s likeability. Federal Social Services Minister Scott Morrison said yesterday the NSW Premier was “popular but not a populist”, noting also that he had a “winning smile and that incredible natural charm, which only a few people are blessed with”.

Many others have made a similar distinction. Considerable attention has also been given to Baird’s risky decision to be up front with the voters of New South Wales about his plans to privatise the state’s electricity infrastructure.

According to much of the commentary, Baird has shown his Liberal colleagues how to successfully sell reform. In the words of Scott Morrison, this involves not just the selling of change, but also the benefits of change.

It’s no coincidence that the need to “sell the benefits of change” has become a mantra chanted by leadership agitators at the federal level. The incantation was evoked not only by Morrison in recent days but also by Foreign Minister Julie Bishop in response to Baird’s re-election.

But to infer that Baird essentially charmed his way back into government despite an unpopular privatisation agenda would be to misunderstand the NSW election result. It wasn’t Baird’s popularity or charm to which voters responded; it was his integrity.

Integrity is defined as the quality of being honest and having strong moral principles. Like authenticity, it’s hard to fake. According to three captioned pictures that reportedly hang on his office wall, Baird’s driving principles are integrity, passion and results.

So it was in accordance with those principles that the neophyte premier promised to restore integrity to the government when Baird replaced the former NSW Premier Barry O’Farrell last year.

Baird delivered on that promise, overseeing the resignations of 10 Liberal MPs from the party after they were exposed by ICAC to have accepted illegal donations, declining to run Liberal candidates in the by-elections brought about by the resignations of sacked Liberals as an act of “atonement”, and driving reforms to clean up political donations in the state. As a result, Baird is now a politician that people trust.

Even Baird’s opponent, Labor leader Luke Foley, recognised in his concession speech on election nightthat Baird embodies that elusive quality, calling the re-elected premier an “honourable man”.

It may well be that NSW voters re-elected Baird because he successfully communicated the benefits of his privatisation agenda. That’s certainly what his reform-minded colleagues at the federal level are counting on. But it is more likely the state’s electors decided to go with Baird because they trust him to do the right thing for the state, even when it comes to an unpopular policy like selling-off or leasing state-owned assets.

This is what is really meant when it is said that Baird’s election strategy was based on that of John Howard when the former PM took the GST to an election in 1998. In contrast to Baird, Howard was never popular in the traditional sense, although he achieved the second highest approval rating ever as prime minister (67 per cent in May 1996). But in those days, before the Tampa and Work Choices, there were enough voters who nevertheless trusted the relatively unpopular Howard to do right by the nation to see him re-elected at the GST election, albeit with less than 50 per cent of the vote but enough seats to retain government.

Based on last weekend’s election, Baird’s trust factor is far superior to Howard’s, having won 55 per cent of the two-party vote with 48 per cent of people supporting the privatisation proposal, up from only 23 per cent in February. A Newspoll in late February found 75 per cent of NSW voters would describe Baird as trustworthy.

Consequently, the Foreign Minister Julie Bishop was only partly right when she claimed the take-out message from the NSW election was “people are ready for reform as long as it’s explained to them”. As she separately recognised, trust was also a key factor.

Considered from this perspective, the NSW election result is not particularly good news for the PM. It would be fair to say Abbott has minimal integrity in the eyes of Australian voters, given his track record in breaking promises and telling little white lies, such as “we have fixed the budget”.

Unsurprisingly, the most recent Newspoll to measure perceptions of the federal leaders’ attributes, conducted in February, found only 43 per cent consider the PM to be trustworthy. While no similar measure is available for another of the government’s key salespeople, Joe Hockey, a recent poll found only 27 per cent approve of the job he is doing as Treasurer.

Now the NSW poll is out of the way, federal Liberal MPs will again turn their minds to their own election prospects, as well as the government’s fractured reputation for sound economic management. This reputation must be repaired if the Coalition is to retain incumbency.

As the PM said in his congratulatory statement to Baird, the NSW premier is a man of integrity who “stayed the course in the face of a concerted scare campaign by Labor”. In contrast, Abbott is the man who has wilted in the face of opposition, dropping or abandoning $27 billion of budget measures, and who has shown little integrity in ditching $3 billion worth of unpopular reforms in the past six weeks simply to shore up his embattled leadership.

In considering what to do next, Liberal MPs will give further scrutiny not only to the PM but also the Treasurer.

In doing so, three things will quickly become apparent. Neither man retains an appetite for the required economic reforms, the skill to communicate the worth of reform, nor the perceived integrity to secure voters’ trust to implement the reforms.

The real question is whether there is anyone at all in the Liberal Party, man or woman, who can fit this bill.