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Australia needs to back business

Opinion Piece

Date : 08 March 2019

Author: The Hon. Josh Frydenberg MP

Publication: Australian Financial Review

Earlier this week, Bill Shorten declared the next election to be a ‘‘referendum on wages”.

The problem for him and over 10 million Australian wage earners is that the Labor Party’s policies will drive wages down and lead to fewer jobs.

Not a day goes by without the Opposition Leader whacking business and using inflammatory rhetoric. ‘‘Why does corporate Australia, the big end of town, think that the next quarter’s profits are . . . more important than Australian national security,” Shorten said, in an indication of how low he would go.

This kind of rhetoric has given a green light to others. Tanya Plibersek seeks to stoke envy by criticising ‘‘rich companies” while Bernie Sanders acolyte and Labor Party president Wayne Swan said ‘‘our task is to tear down neoliberalism”.

One would think the alternative treasurer, Chris Bowen, would be brave enough to counsel his colleagues and stem the business bashing. But he hasn’t.

Instead, he doubles down and warns business that ‘‘in this environment, where populism is on the rise . . . they should not expect their decisions to go without comment”. All this while he bizarrely brags about having the top CEOs’ numbers on speed-dial and doing ‘‘a very substantial number” of board lunches. He can’t be serious.

However, the sustained Labor attack on business is not just rhetorical. In the key policy areas of industrial relations, trade and tax, there is a chasm of difference between the two parties.

Labor has floated reintroducing pattern bargaining as one of a suite of ACTU-inspired industrial relations policies. Qantas chief executive Alan Joyce is one of many to sound the alarm, saying such practices would have inhibited the establishment of Jetstar and the creation of 10,000 jobs. With 38,000 small business suppliers, Joyce speaks with authority not just for his employees but for tens of thousands of others.

Labor’s commitment to abolishing the Australian Building Construction Commission and the Registered Organisations Commission will also usher in a period of higher costs, increasing industrial disputation as union militancy goes unchecked. This undermines the improved workplace environment we have seen under the Coalition, where the number of working days lost to industrial disputes has decreased by more than 40 per cent compared to under Labor.

Shorten’s reckless disregard for authority and the decisions of independent umpires can also be seen with penalty rates. In a classic example of Olympic-level hypocrisy, he set up the body he now wants to ignore, forgetting he said at the time the body was established ‘‘that it carries on the tradition of an independent industrial umpire for our great nation”. It doesn’t matter what the issue is, Shorten will always side with the union, admitting ‘‘as Labor leader, I still think like an organiser”.

Despite union membership being in freefall, a Labor government would give union bosses the keys to every business and a seat at every top table. Unions are demanding they get seats on corporate and government boards, with Swan even admitting ‘‘I do regret I didn’t put a worker on the Reserve Bank board”.

Now a can of worms is being opened by militant unions, pressing industry superannuation funds to ignore legal duties to members and instead influence management decisions of publicly listed companies. Rather than being attuned to the chill this has sent through business corridors, Labor is emphatically backing the aggressive move.

Union influence over Labor doesn’t stop at our shores. In a week in which the Morrison government signed a historic FTA with Indonesia, Labor cast doubt over the willingness of this and future agreements. Union officials will be given an effective veto in negotiations, as previously signed deals get revisited.

Shorten’s criticism of the China FTA as a ‘‘dud deal” and unwillingness to fight for the Trans-Pacific Partnership, calling it ‘‘dead in the water”, is indicative of his true instincts on trade.

In contrast, the Coalition has increased the coverage of free trade agreements from 26 per cent of our two-way trade when we came to government, to over 70 per cent today.

With $200 billion proposed in new taxes, it doesn’t matter what the question is, Labor’s answer is always higher taxes, even walking away from a previous commitment to a tax to GDP cap. These taxes will have a suffocating impact on business, and thus jobs and wages.

The $55 billion retiree tax will incentivise over a million Australians to divest Australian equities and reallocate their asset portfolio. This will impair capital formation. Not to mention those who, with a significant loss of income, will be forced onto the pension.

Labor’s $32 billion housing tax will deter new housing builds, costing jobs. A 50 per cent increase in capital gains tax will also punish aspiration and risktaking, and give Australia a CGT rate substantially higher than our peers.

Again, Shorten’s hypocrisy shines through. Once upon a time he championed cutting company taxes, as a means to ‘‘more jobs and higher wages”. Now he advocates the opposite, imposing higher taxes on economic activity, seeing Australian companies as an easy target.

In contrast, the Coalition knows that business, big and small, plays a critical and positive role in our economy and society. The government sets the rules, but it is business that takes the risk, borrows capital, employs workers and pays wages.

Business needs stability and certainty, and an operating environment that is internationally competitive. This requires government to be disciplined in its fiscal management, committed to lower taxes, more trade, co-operative workplaces, and targeted infrastructure spending.

All of which the Coalition is delivering, and remains committed to going forward.

The choice couldn’t be clearer at the next election.

Josh Frydenberg is the federal Treasurer.

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