In The Lobby

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-By John Boley

Government is not getting worse but it faces increasing and more varied pressures. So says Peter Anderson, chief executive of the Australian Chamber of Commerce & Industry (ACCI). Talking to Business in Focus at a time when the Labor leadership spill was brewing and Queensland was in election mode, he said he thought the “instinct” of politicians to make durable decisions to support a strong economy in dialogue with the business community is still in place. But the pollies are affected by short-termism.

“Governments are under more pressure from more voices.” But, “government is pushed and pulled by a larger number of groups [than before] and there is a trend based around the short term of our political cycle and media cycle. Both of those tend to push governments toward shorter-term, populist decision making rather than longer-term decision making that might be unpopular at the start but still produce good outcomes.”

This trend presents a challenge to the business community, “because some of the things we advocate involve some pain, some restructure in the short term – for example tax reform – but they add to the long-term good of the community and the economy.”

The ACCI is Australia’s largest and most representative business association, speaking at national and international levels on behalf of State and Territory Chambers of Commerce and Industry and national industry associations from all sectors of the economy. These associations constitute ACCI’s national member network and give it the “mandate and authority to be the essential connection between industry, governments, regulators and influential policy forums which affect doing business at home and abroad.”

It’s been around a long time – more than 170 years, in fact, since its inception as a business movement – and since 1992 has been a unified voice following a merger with the Confederation of Australian Industry. Peter underlines that the ACCI’s position on any given issue is arrived at through a “very robust internal process of discussion and decision-making involving our members and member organisations. We have a series of standing policy committees and we also have a series of ad hoc working parties, all of which involve our members. They are dealing with a wide range of current issues on which the ACCI needs to form a view, whether it is the way in which the federal budget should be structured – whether we should return to surplus or not in 2012 – our views on the Carbon Tax, whether we support a reduction in the corporate tax rate or the income tax rate or proposals to the Henry Review or how superannuation should be changed, whether we believe the fair work law should be amended and how and what are the priorities.

“All of those issues [and more] are dealt with by a range of internal committee processes. The big decisions that have to ultimately be made, particularly where they are contested, come before our general council which meets three times a year and will ultimately resolve, usually by consensus, a policy position.” Significantly, this procedure obviates the possibility of a position that favours a single sector or a single business interest. “It genuinely comes up with a position that reflects the broad and consensus view of the business community and its organisations.”

This is of immense value when ACCI is talking to Ministers. But, “we do need to keep reminding them. People, relationships and staff change, advisers change and journalists change. You need to continuously remind people close to decision making and people who help form public opinion of the robustness of our processes, that anything that Peter Anderson as chief executive says is not Peter Anderson waking up one morning thinking that this is the view that we should hold. It is a view that has been developed through a proper representative process inside our organisation and it is Australia’s largest and most representative business association because it brings together multiple sectors and businesses of all sizes.”

On 1 January 2012 ACCI launched its “10 Point Reform Agenda for Jobs and Growth,” reflecting the collective views, perceptions and concerns of Australian business. A listing of its lobbying priorities is easily viewed on its website (http://acci.asn.au/Our-Agenda). But Peter unhesitatingly picks wages as one of the ‘biggies’.

“There is no question that wages, and the cost of doing business, is a critical issue and has many dimensions. Labour costs are vital, not just in terms of the direct costs but productivity. There is a whole skills dimension which is allied to wages. Businesses pay wages but they also want good productivity and that requires investment in skills. One of the issues on wages has not just been the fact that wage growth has exceeded productivity growth; it has also actually exceeded our increases in the cost of living. We have added a range of on-costs in recent years which have basically meant that an Australian business has to add about 30 per cent to the wages paid in order to employ somebody” – items such as superannuation, workers compensation premiums, paid leave obligations, overtime rates and shift rates, “some of which have come back into our industrial system with these new fair work laws. So being an employer has become a very expensive exercise; it involves certain risks but it also can involve a lot of reward. We need to make sure that employing people in Australia is sustainable and productive.”

It is important to “try and minimise unfair costs or unbalanced costs imposed on employers and to make sure that some of those costs do not apply in such a broad brush way that they assume that all businesses are at the same capacity. Because some businesses can certainly afford the wage costs that are imposed by our regulatory system, but with others it is a struggle. That is a challenge to policy makers.” The uneven economy has really accentuated this problem, says Peter. “There are strong winners in industry at the moment and there are some strong losers. Yet much of our policy, [e.g. interest rates or wages] has tended to be applied with a broad brush. They are very blunt tools. So it is a big challenge for us to try and bring about what I would describe as some decentralisation to wage setting in Australia, so that our economy-wide decisions are not so excessive that they prevent some local decisions being made that would modify the impact and remediate some of the adverse impacts.”

Reskilling people throughout their working life and dealing with the important issues of an ageing workforce are “very real business issues and we have to make sure that there is both private and public investment in some of those tasks.” Government does spend a lot of money in this area but “some of it is not well spent. Decisions have to be made: do you put large amounts of money into business and industries that are declining and going through structural change like manufacturing, or do you put large amounts of money into the growth industries like service industries and their skill requirements, areas where there will be skills shortages?” These are not easy decisions for the pollies. “We have to help them make it.”

How would ACCI rate the incumbent government’s performance? Not an easy question, Peter admits, because there are many different dimensions. “I think that there has been a willingness by government to consult, particularly after the mess of the mining tax. Some lessons were learned from that but there has also been a very unhelpful series of decisions that have been quite harsh on the private sector.” Decisions that are difficult to understand, he says, given that government acknowledges publicly that the private sector is under significant pressure and structural change, “and yet we have had major re-regulation of the labour market, we’ve got new superannuation levies coming in, we’ve got additional costs associated with doing business at the very time that business is trying to deal with this uneven economy.

“I think that the government would rate 6 or 7 out of 10 on its consultation, but probably only 5 out of 10 on its private sector decision making.”

Peter calls on business in general to come and join relevant associations, and not simply as a means of generating more membership dues. “Your readers need to be aware that the business associations in Australia are very active. They do a large amount of work in complex spaces, much of it behind the scenes. But they do provide services that are of value to business people and I think that while business people may not want to join organisations for the sake of it, if we expect governments to make decisions that work effectively for the private sector then being part of a business association and accessing the services and being part of the lobbying strength is ultimately in your long-term interests. If we want governments to think long-term we have to think long-term as business owners as well, and that means supporting your industry associations and your chambers of commerce.”

Making Sense of Management

Management is the art, or science, of getting things done through people. Sounds fairly straightforward – except for the fact that people are not robots waiting to do our bidding. People have their own minds, motivations, and goals. So how do managers keep operations – and the people behind them – running as planned?

October 19, 2018, 6:27 AM AEDT