PM's top adviser trapped in a time warp

When Prime Minister Tony Abbott chose Maurice Newman as chairman of his business advisory council - to give senior politicians "dependable and fearless advice" - he picked a businessman whose views appear to be trapped in a time warp.
By · 13 Nov 2013
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13 Nov 2013
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When Prime Minister Tony Abbott chose Maurice Newman as chairman of his business advisory council - to give senior politicians "dependable and fearless advice" - he picked a businessman whose views appear to be trapped in a time warp.

The size of the time warp became clear on Monday night when Newman gave a speech that not only resulted in a key member of the Abbott ministry, Christopher Pyne, trying to distance the government from some of his views, but created some confusion about Abbott's true intentions.

In a nutshell, Newman said Australia's average weekly wages were too high, there was a need for workplace reform and he questioned the adoption of the Gonski education reforms and national disability insurance scheme as "reckless", given the size of the country's debt.

He also called for a review of Australia's competition laws, suggesting they should be diluted rather than beefed up to enable big companies to merge to get the "necessary critical mass in a small domestic market without running up against trade practices issues".

He warned that if we "are not ultimately to become a branch economy, the opportunity for Australian companies to become national champions at home must be considered by rebalancing the interests of consumers and businesses. To do otherwise is to encourage companies to shift to more friendly domiciles, sell to foreigners, or, if all else fails, to close their doors".

It is tough talk and it puts a different spin on the Abbott government's commitment to undertake a root-and-branch review of competition legislation, with particular reference to grocery retail and banks. And it comes as the Australian Competition and Consumer Commission investigates supermarket chains Coles and Woolworths over allegations of misuse of market power when dealing with suppliers.

It is also against a backdrop of small businesses increasingly complaining it is becoming more difficult to work with the bigger businesses they have to deal with. In some instances, they say they are being treated unfairly or unconscionably.

Given there are more than 2 million small businesses registered in Australia, employing more than 5 million people, it is a concern the Abbott government and Newman should pay some attention to, given the long-term effects on employment and society at large if too many fall over.

While Newman's comments can be seen as a flashback to another era, they are not the views of all business leaders. Indeed, it was ASX chairman David Gonski who developed the education reforms that Newman believes should not have been adopted on the basis they were "reckless" given the ballooning budget deficit.

"Labor's commitments to its Better Schools plan, and the national disability insurance scheme, which alone [would] come to $22.5 billion in 2019-20, were made in the clear knowledge of a budget already under serious and continuing pressure. Worthy though the causes may be, in the circumstances, it was reckless," Newman said.

What Newman fails to understand is that a better-educated society improves productivity and creates a stronger economy in the long run.

Westpac senior executive Brian Hartzer gave a more enlightening speech on Tuesday that addressed similar concerns about the country's future, but was more forward looking about what can be done rather than criticising previous government policies.

Hartzer argues for boosting productivity, increasing the size of the workforce and lifting debt to pay for some much-needed infrastructure. He said the country also needed a more "enlightened" attitude to immigration. "I recognise this is a politically charged topic. But if we are to grow, compete successfully and reach our national potential, we simply must increase the size of our skilled workforce," he said. "So it should be the objective of business, policy makers, organised labour and the media to remove barriers to work."

Hartzer mentioned the role of women in the workforce and the need to encourage more women back to work to improve productivity and economic growth.

There are many ways to boost the economy and the standard of living without resorting to wage cuts or ignoring sound education policies and national disability schemes.
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