The folly of Shorten's knee-jerk attack

The appointment of Tony Shepherd, chairman of both Transfield Services and the BCA, to head up the Abbott government’s Commission of Audit is causing much excitement among the left and the right.

In government circles, Shepherd is an obvious choice for not only his business acumen, but some impressive work at the BCA during his tenure: specifically the policy document ‘Enduring prosperity for all Australians’, which was by far the most comprehensive and sensible blueprint for Australia released before the federal election.

Neither major party’s policy platforms came close to it in terms of a coherent vision for the nation. Tony Abbott promised fiscal austerity and lashings of spending on paid-parental leave, defence and infrastructure (Hurry up Hockey, and hold the riesling, October 24). Kevin Rudd’s dramatic unravelling of the Gillard platform promised, well, whatever the Twitterverse wanted.

The BCA’s vision was so balanced that it even won high praise from the other side of town. Peter Strong, executive director of the Council of Small Business of Australia, expressed strong support for the plan.

The BCA, routinely dismissed as representing ‘the big end of town’, acknowledged “tensions” with and interdependence with Strong’s small-business constituency.

It said: “Small businesses contributed about a third to overall sales and profits, medium businesses a quarter and large businesses just over 40 per cent. In a competitive market, businesses compete for customers and business with the aim of generating profits and wealth. There are differences and tensions between businesses of varying sizes but the success of one sector need not be at the expense of the other.”

This Shepherd guy might actually know what he’s talking about.

Labor and left-leaning thinkers, such as Richard Denniss at the Australia Institute, have been quick to criticise Shepherd's appointment. Denniss told the Fairfax papers: “It's like getting Greenpeace to do an audit of environment policy”. Opposition Leader Bill Shorten said the government had “outsourced their policy making to big business lobby groups”.

For Shorten, this is a mistake. There is much in the BCA’s plan for Australia with which he can agree. Under the heading of ‘A strong society and improving living standards’, the BCA called for:

– Maintaining a reasonable distribution of wealth and income in relative terms globally (as measured by the Gini coefficient) through fostering greater workforce participation, low unemployment, higher skills and more job opportunities

– Making significant progress in addressing entrenched disadvantage by improving opportunities for participation in work and retention of a strong and sustainable safety net

– Improving opportunities for participation in work and in the community to ensure a greater sharing of wealth

– Closing the gap in opportunities for Indigenous Australians.

Shorten should give due credit to the BCA for attempting to be more than a “big business lobby group”. A more nuanced response to the appointment is called for; one that highlights the parts of the BCA’s agenda that Shepherd should take to the commission. For instance, the BCA wants to raise unemployment benefits.

There is no doubt that the federal budget is broken, and either cutting spending or overhauling the tax system – including a possible broadening or increase in the GST – are the two ways to do it.

Shorten, and Labor more generally, have all but dug in on the GST. This is a position that works politically, but may not be in the nation’s best interests.

If Shorten also rails against any cuts decided on by the “big business lobby”, he will be left with little to try an influence from opposition.

The BCA doesn’t like the mining tax, or the loss of tax concessions for R&D or mining exploration. And on the carbon tax, it wants the price of carbon to fall to the going rate abroad.

A smarter line for Labor to take would be to outflank Abbott and get in early with the things it would do to balance the books and get Australia working. Shorten should be working feverishly to offer Australians a new version of the Kelty/Hawke/Keating Accords that achieved so much in reforming the Australian economy.

Sniping from the sidelines while Abbott makes some of the required reforms won’t cut it.

Both sides should probably take a close look at new polling data from the US, where 60 per cent of voters are so sick of the standoff over the Obamacare policy that they’d like to see all members of Congress booted out – including the candidates they voted for – at the next election.

If the next wave of Australian economic reform descends into a “big business vs the people” farce, perhaps Australian voters will wish the same.