How business lobbyists block reform
There are a lot of people moving office in Canberra, thanks to the election. But not all of them are politicians. There is a parallel changing of the guard among the lobbyists - a change that will have far more effect on what happens to us in the next three years than most people realise.
As has been reported by Matthew Knott, of Crikey, Liberal-aligned lobbying firms - full of former politicians and staffers - are expanding their presence, while Labor-aligned firms are downsizing.
These people are selling access and influence with the side of politics that happens to be in power.
Since businesses pay big money for the assistance of these people - many of them seeking to cash in on their former lives in politics - we must assume it makes a difference, that businesses represented by someone of the same persuasion as the government get a more sympathetic hearing.
If so, the formal lobbying process plays a bigger part in our governance than it suits the politicians to admit or the media to keep us informed about. Lobbyists prefer to practise their dark art without the glare of publicity and, for the most part, the other players respect their privacy. Most obliging of them.
Of course, there are two classes of lobbyists in Canberra: the firms of influence-pedlars we've been discussing, but also the national peak bodies representing business in general, particular industries, small business and even many non-government organisations.
The peak bodies' lobbying efforts - while they no doubt have their private, let's-not-talk-about-it side - are a lot more overt, with the outfits issuing an unending stream of press releases and submissions, and their spokespeople seeking airtime for their reactions to a Reserve Bank decision to raise interest rates, the budget, the election of a new government, or an absolutely crippling rise in the minimum wage.
My guess is that, when the peak bodies are engaged in a major campaign, they quietly enlist additional assistance from the professional lobbyists.
Much of the time the peak bodies are lobbying for their own "reforms": a cut in the rate of company tax, changes to Labor's Fair Work Act, a cut in the top rate of income tax and increase in indirect taxes, and so forth.
But I think they're at their most effective - and most insistent - when they're trying to block or seriously modify some change initiated by the government. Consider the chequered history of the departed Labor government.
We could start with the business lobbyers' success in getting Labor's original emissions trading scheme watered down and, for all we know, the success of some in egging on the Coalition's climate-change deniers, who persuaded the parties to ignore the "mandate" Labor had to introduce such a scheme. So much for mandates.
But the most spectacular blocking effort must surely be the success of three of the world's most profitable mining companies - acting under the cover of the Minerals Council of Australia - in knocking off the original resource super profits tax and getting it replaced by the badly designed minerals resource rent tax, which the Coalition is about to abolish not long before it starts raising significant amounts of revenue.
Labor's handling of the mining tax was abysmal, but much of the big miners' success (which also came at the expense of the small miners) is owed to Tony Abbott's willingness to oppose the tax for reasons of short-term political gain.
Non-mining businesses have yet to twig that the miners' success will come at their expense. With the miners soon to be so undertaxed, the scope for a further cut in company tax has gone. It's called opportunity cost.
More recently, we have the success of the financial services lobby in winning a multi-year exemption from further reforms to superannuation (achieved, it's said, because of the lobby's threat to launch an election advertising campaign against whichever side of politics failed to give it the exemption it was demanding).
This is not to mention the success of the medicos in getting a delay in the clampdown on abuse of the self-education tax deduction and the success of the novated leasing industry in getting Abbott to preserve the company car tax rort.
If you saw this sorry saga as a testament to Labor's political ineptitude you wouldn't be wrong. But there's another lesson to be learnt: the more business looks the other way while particular industries frustrate governments' efforts to reform the tax system, the less likely it becomes that business in general will get the changes it's seeking.
Tax reform doesn't grow on trees.
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