Lobby groups pulling strings in halls of power

The freeze on super tax changes is just one example of how big business is able to influence policy, writes Gareth Hutchens.

The freeze on super tax changes is just one example of how big business is able to influence policy, writes Gareth Hutchens.

A couple of months ago, the superannuation industry was gearing up for a multimillion dollar campaign timed to land before the federal election.

Filming had almost started, the ad spots were about to be booked, the slogan was ready to go. The campaign, the result of a rare bout of co-operation between industry and retail super funds, would push for a moratorium on changes to superannuation after years of inquiries and reforms.

Its message? "Hands off Super".

But as it turns out, it may be the campaign people will never see - because it won't be needed. After urging from the two major superannuation sector lobby groups - the Industry Super Network (ISN) and the Financial Services Council (FSC) - and at least some of the 32 other groups that spruik for the industry, Prime Minister Kevin Rudd announced a freeze on changes to taxation in super. The opposition had already promised the same.

It was a victory for the industry and an illustration of how much clout its representatives hold in Canberra. It was also confirmation the government remains wary of provoking the lobby groups, more than three years after a potent $20 million campaign led by the Minerals Council of Australia helped to kill both the resource super profit tax and the first Rudd prime ministership.

FSC chief executive John Brogden says the super campaign is waiting should it be needed again.

"It was the first time anywhere in the financial services industry anybody's threatened to run an advertising campaign, like the miners against the government, to tell them to leave super alone," Brogden says.

"It will go in the vault and we will consider going back to an advertising campaign if this government or the next government ... starts tinkering with super again."

Australia's political parties are now two weeks into the election campaign, furiously working and travelling across the country spouting sound-bites and rolling out policies. But for the nation's business lobby groups - the Business Council of Australia (BCA), the Minerals Council, Australian Industry Group and their peers - it is a time of sitting and waiting, to see if the hard lobbying work of recent months and weeks has paid off.

From the polished and well-financed BCA to the relatively young and less experienced ISN, the big groups had spent months refining their policy statements and shoring up political relationships, wielding all the policy muscle they had.

They knew the politicians would be too busy once the election was called, so anyone trying to meet with a politician during the campaign would have left things too late.

"For the good political lobbying groups, they will have already done their work," says Kate Carnell, former ACT chief minister and former head of the powerful Food and Grocery Council, now at non-profit Beyond Blue.

"They've known that there was an election on. They would have ensured that they had their pitches to the major parties in place a long time before now. They would have got the undertakings of the major parties to support stuff that they wanted."

A senior official at a prominent business group says: "For us, it's almost a downtime in a way. We sort of focus on getting ready for what we want to do in the immediate post-election."

For some of the groups, a change in government could mean a radical change in fortunes. The Australian Chamber of Commerce and Industry (ACCI), for example, is reported to have had a frosty relationship with Labor but is on better terms with Opposition Leader Tony Abbott. The ISN, with its union links, has enjoyed close relationships with federal Labor for six years. However, opposition superannuation spokesman Mathias Cormann is a noted critic of industry funds and their board structures.

Treasury sources confirm that groups linked to the superannuation and auto-manufacturing sectors have enjoyed good access under Labor - "because those are where the interests of unions and business align".

And despite its reportedly strained relationship with the Gillard government, the BCA has had immediate access to Treasury in the form of a secondment program. After the mining tax debacle, a program was launched where a Treasury employee , on leave without pay, would spend a year working inside the BCA.

When Rudd returned to the prime ministership in June, he and Treasurer Chris Bowen were quickly in touch with the business lobby groups. It was an attempt to show the new Rudd government would work to repair Labor's battered relationship with business.

But with the opposition having led the polls for some time, some of the groups have sniffed the political wind and adjusted accordingly. When Heather Ridout retired as AiGroup chief executive in late 2011, the board chose former diplomat and journalist Innes Willox to succeed her.

Willox boasted impeccable credentials - with senior roles in the public and private sector in Australia and overseas - and it didn't hurt that he was a former adviser to Liberal foreign minister Alexander Downer

ACCI chief executive Peter Anderson is also a former Howard government adviser, while Brogden and Carnell are former politicians.

This revolving door phenomenon - where former politicians and political aides enter the world of PR and lobbying - has alarmed some, including former Greens leader Bob Brown.

"I don't think we should be able to lobby our colleagues as a consequence of being here," he said in a 2011 interview with The Conversation. "It is becoming more and more difficult to go and have a coffee in our own parliamentary coffee shop ... without being buttonholed," he said.

It's not unusual to find a reshuffling of lobby group leadership before, and after, a change of government. If you ask a lobbyist why this election is important, you will be told diplomatically that all elections are important.

But they will also admit things are actually different this time around: no matter who wins the election on September 7, they want an end to minority government, which has forced the groups to work at a furious pace for the past three years.

The FSC, whose sector has endured multiple inquiries and major changes in recent years, including the Future of Financial Advice legislation and My Super reforms, maintained weekly contact with the government and opposition over the past three years, and "sometimes, when Parliament was sitting, on a daily basis," Brogden says.

"From my perspective, a hung parliament for another three years, if that were the outcome of this election, it would be a disaster for business in Australia," he says.

One complaint with the minority government was that it had shifted power to the independents who could introduce an amendment to a bill at the last minute, potentially threatening months of hard work. This was mentioned by several members of business lobby groups.

Australia's lobby industry has changed and grown dramatically in recent decades.

In The Lucky Country, Donald Horne's 1964 critique of Australian society, the main "pressure groups" still had their roots in Australian agriculture. Wheat farmers still dominated through the Wheat Board; the sugar lobby flexed its muscles through the Colonial Sugar Refining Company; politicians kept an eye on the wool growers. The Returned Servicemen's League and the Catholic Church were also worth a mention.

Today, it is the business lobby groups that command attention, and there are more of them than ever before.

It shows how much globalisation has changed things: removing capital controls, slashing tariffs, deregulating the financial industry, and creating a political power shift away from farmers towards big finance, big supermarkets and multinational corporations.

New ways to lobby emerge, and new groups pop up as the need arises. The Australian Breakfast Cereal Industry Association, for example, was formed in the 1990s to lobby for cereal makers to be able to add vitamins and minerals to their products. It dissolved once that battle was won.

In 2006, people were shocked by revelations that members of a group called the Australian Industry Greenhouse Network, set up to represent the country's carbon lobby, boasted to former Liberal adviser Guy Pearse they had so much influence in Canberra that they wrote federal government policy.

Just this week, a group cobbled together at the last minute by the automotive industry released an ad campaign attacking proposed changes to the fringe benefits tax regime. They had no time to prepare, given the announcements were made with little consultation.

Manufacturing Australia was established in late 2011. It is a chief executive-led group like the BCA, but it represents only nine companies.

How effective are the groups? This varies. Manufacturing Australia has already had some success; it had a hand in the formation of the federal government's anti-dumping agency. The main issue it is pushing now is cheap domestic energy supplies.

A group spokesman says it was formed because its members felt their views were not being "wholly represented by another number of larger industry groups".

"We don't want to point the finger at any one group because our companies are members of those groups too, but we're not such a broad church. We focus on a few issues chiefly concerning manufacturers."

Alliances come and go. The industry and retail super funds may be working together now, but this follows years of acrimony.

Late last year, Council of Small Business of Australia chief executive Peter Strong phoned the BCA's Jennifer Westacott to suggest they start talking - something they had rarely done - believing they could achieve more if they worked together.

"We decided to have a theme for the first six months of this year, and the theme being Big and Small Working Together," he says.

But there's always a risk of upsetting another group when new alliances form, because turf is vigorously defended. The move by the Council of Small Business and the BCA to work together did not go unnoticed by the ACCI.

"They like to see themselves as representing big and small businesses, I don't think they like anyone else doing it," an insider says.

The oldest of the business lobbies have existed for more than half a century. The Australian Bankers' Association, for example, was established in the late 1940s to oppose the Chifley government's proposal to nationalise the banking system.

ACCI's roots go back 170 years to the early chambers of commerce founded in the 19th century. A more recent ancestor was the Confederation of of Australian Industry, formed in 1977, which led the fight against compulsory super in the 1980s and 1990s.

The BCA was formed in 1983. Based in Melbourne with offices in Sydney and Canberra, its invitation-only members include the chief executives of 100 of the largest corporations operating in Australia: the big four banks, global investment banks such as Goldman Sachs, JPMorgan, Deutsche Bank and UBS, foreign energy companies such as ExxonMobil and Shell, BHP Billiton and Rio Tinto, as well as Microsoft, News Limited, McDonald's, Wesfarmers and Woolworths.

The younger groups include ISN, which is just seven years old. "Six or so years ago, industry super funds had no real presence in Canberra," ISN director David Whiteley says. "When we first went to see ministers and shadow ministers, the response we got back was, 'Look, we occasionally see someone from industry super but by and large we only know about you from your television advertising, and because the retail funds come here and complain about you.' So we realised that we had a responsibility to make sure that politicians and policymakers could hear our views directly."

If the response to the super industry's threat of a campaign is any guide, the policymakers can hear them loud and clear.


Business Council of Australia

CEO: Jennifer Westacott

The heavyweight of the business lobby circuit. Membership is made up of the chief executives of the top 100 of Australia's biggest companies. It is also open to smaller members, including investment banks and law firms. Because the membership base is diverse, the BCA focuses on macroeconomic issues — tax, industrial relations and red tape.

Australian Bankers' Association

CEO: Steve Munchenburg

Made up of 25 local and international banks, although the driving force for policy remains the big four. The ABA became prominent when it was stating the case for the industry's higher funding costs. Much of its background work has been attempting to push back on some of local interpretation of new banking rules being rolled out globally.

Australian Industry Group

CEO: Innes Willox

Claims it represents the interests of more than 60,000 businesses. Traditionally it was the lobby for "heavy industry" such as manufacturers and engineers, but it has more recently broadened its membership base. It urged more active policy measures when the Australian dollar was trading above US100¢.

Minerals Council of Australia

CEO: Mitchell Hooke

MCA rose to prominence during the mining boom when its cashed-up members flexed their muscles in opposition to the Rudd government's proposed resource super profits tax. More recent campaigns depicting friendly miners and farmers working together over coal seam gas have failed to capture the public's imagination.

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