Business leaders from Australia's major banks, telcos and resources companies spoke today of their reticence to criticise the Federal ALP Government for fear of 'retaliation' from Canberra.
In a forum organised by The Australian newspaper, which was unashamedly pro-business and pro-conservative in its coverage of the last Federal Election, executives spoke of significant pressure from politicians to remain silent over key issues affecting the economy.
"I am amazed at how thin-skinned some politicians are," said Michael Chaney, chairman at National Australia Bank and Woodside Petroleum.
"There is an obligation on the business community to speak out on issues in the national interest. People look to business and academia for leadership."
Incredibly, Chaney said, there have been threats made against people that have spoken out by "the same people that would extol the virtues of freedom of speech."
Wesfarmers and Boral chairman Bob Every said there had been a "reluctance" for business leaders to speak out, preferring industry associations bear the risk instead.
Telstra chairman Catherine Livingstone told the audience that retaliation against public comment was "prevalent" and "has been for some time."
Livingstone was chairman of Telstra when the ALP Government threatened to deny the telco access to future mobile spectrum auctions if the company did not play ball on splitting into retail and wholesale arms.
Livingstone said the Federal Government needed to be more willing to engage with the business community to achieve better national outcomes.
Politicians could not be expected to be "across the complexities of an enterprise as large as this country" without seeking consultation with the business sector, she said.
Her peers were in strong agreement, particularly in reference to former Prime Minister Kevin Rudd's surprise plan for a resources super profit tax.
Livingstone recommended the business community be involved in policy consultations in advance, that the policy-creating capacity of the public service be boosted (in terms of sheer numbers), and that the Government generally adopt "a more consultative model."
These comments were set against an opening speech by The Australian's CEO Richard Freudenstein, who set the scene with commentary that the Australian business community once "looked for clear direction from Government" but now has to help guide the Government, especially on areas such as the National Broadband Network and a potential carbon tax.
Calls for reform
The business leaders put tax reform - including a full review of the Henry Tax Report - at the top of their agenda for what they hoped the Gillard Government would achieve.
Several expressed doubts the Gillard Government would achieve a great deal of reform (or as Livingstone preferred to say, 'adaptation') whilst holding a minority Government.
"I fear we will get more populist decisions and stagnation," said John Morschel, chairman of ANZ Bank.
"I always lament the amount of compromise politicians make," agreed Chaney. "The chances for bold reform are low."
Every called for "strong leadership", which was missing in action during the recent Federal Election. "I hate to see the agenda being run by minorities," he said.
Mixed views on NBN
The majority of the speakers called for a business case to be made for the ALP Government's National Broadband Network rollout plan.
Every said the $43 billion NBN plan should be weighed up against thirty years of under-investment in roads, rail, water and other national infrastructure. "I don't know where [the NBN] would rank in priority," he said.
Even if higher broadband speeds delivered productivity increases, "the lack of a business case is creating doubt in people's minds about that expenditure," said Morschel.
Chaney said that the $25 million McKinsey Implementation Study was not sufficient to make a case for the investment.
"There were some assumptions made in there - assumptions they may have been told to make - that are unrealistic," he said.
"The only thing that gives me pause is, I think there is the potential for benefits from the technology that we didn't anticipate," Chaney said.
Livingstone, who chairs a telco still negotiating with the Federal Government over its potential involvement in the NBN, was more reserved.
"The business case is a matter for the Government," she said. Big business "already uses fibre, predominantly", she added; the real gains from an NBN would need to be made in the small business sector.
Price on carbon 'inevitable'
Surprisingly, most business leaders expressed an air of inevitability over a price on carbon.
Every said a price was "inevitable during this term of parliament."
He said the business community was already factoring the price in. "Any investment decisions I look at can only be passed if there is a price on carbon factored in," he said.
His colleagues concurred, and said the price of carbon is already being felt in petrol and electricity prices.
But several expressed concerns that any adverse impact on "energy-intensive trade export industries" would need to be "recognised" and the companies "protected".
Chaney said Australia shouldn't be "ahead of the pack" and should not move on a price until the world's "major emitters are on board."
Business leaders spoke of 3-4 percent economic growth in Australia if China's economy holds up. But they also warned of downward pressure on prices of resources and the adverse impact of a higher Australian dollar for exporters.
Livingstone expressed concern as to where "the next wave of growth will come from," but said it would most likely involve "resource efficient technologies."
Mirroring recent commentary from the Australian Information Industry Association, she expressed hopes that Australia would not be "left behind" in developing these technologies.