Archive for July, 2016

Hanging on

Right now we’re all just hanging on.

The Coalition and Labor are hanging on to see what the federal election postal vote count delivers. Liberal sources claim that the outcome will be 77 seats for the Coalition in the House of Representatives.

The political vultures of the commentariat are hanging on to see if the Liberal party splits over the campaign debacle. My guess is it won’t because that route is suicidal.

The business community, and not least the resources and energy sector, is hanging on to see whether there is any prospect of sensible, durable policymaking in the next Parliament. My short answer: no.

Extraordinarily, with the vote count not near completion, thoughts are turning to the next federal election – which notionally will be for the House and half the Senate. When? You can speculate all you like but this is almost impossible to pick. If the Parliament proves wholly unwieldy, it could be as early as next year – but this assumes that the Coalition, if re-elected, cannot find sufficient support among the new fringe-dwellers to hobble along in to at least 2018.

The problem for business goes beyond the obvious parliamentary instability issue.

As a commentator in “The Australian Financial Review” points out today, it seems Labor currently sees political mileage in being anti-business.

Certainly, the energy sector has not seen much to comfort it in Labor attitudes at federal, State and Territory levels in the past year or two.

Looking around at present, one remembers Emperor Hirohito’s surrender speech 70 years ago with its line that the situation has developed “not necessarily to our advantage.”

How business picks itself up from here and progresses its agenda is quite a question. What the agenda should be in the light of the tilting of the playing field is a substantial question in itself.

Just before the poll the Australian Petroleum Production & Exploration Association urged the community to “vote for progress, not protest,” arguing that a vote for independent candidates and minor parties opposing responsible development of gas “is a vote for insecurity and higher energy costs for families and businesses.”

The Minerals Council CEO, Brendan Pearson, wrote a newspaper op-ed observing that one of the few things on which Turnbull and Shorten agreed is the need for a new plan to manage the economy after the resources boom.

The MCA and APPEA then joined forces in another statement urging appreciation that the boom “is far from over,” that, by some benchmarks, it is only just beginning as the country receives the benefit of $400 billion in investment in terms of export revenue and long-term, highly-paid jobs, sustaining a large supply chain in services and manufacturing.

“We have resources, infrastructure and expertise” is the thrust of their message but, as this election makes so clear, today’s politicking does not focus on policies needed to sustain investment, wealth creation and economic growth in the knowledge that, without them, social benefits and good environmental management are almost impossible to deliver.

Australia’s political culture, the associations’ argument goes, seems incapable of rational discussion about much-needed economic reform.

This should be joined, I think, to comment on the ABC’s Q&A program last night by the editor-at-large of “The Australian,” Paul Kelly.

Our society, Kelly observed, is becoming more fragmented and consensus about fundamental ideas and values is “disintegrating in a way we haven’t seen for a long period of time.” Since the late 1970s, I’d suggest, and it took all the 1980s and well in to the 1990s to recreate a wider new consensus – only to see it collapse again in the past 8-9 years.

Turnbull’s attempt to sell a positive message has failed to cut through in areas of economic transition and pressure, Kelly added – such as Tasmania, northern and regional Queensland, Western Sydney and South Australia.

There was also comment from Holly Ransom, entrepreneur and youth advocate, who told Q&A’s audience that today’s community view is that globalization has not improved our quality of life.

“I think we’ve all been caught off guard by the degree of unrest in the community,” she added.

Being caught off guard would seem to be clearly true for the Coalition in 2016 – but perception and reality are not the same thing; both mainstream politicians and business leaders surely can do a lot more to persuade the community that, overall and over time, globalization is a better bet than protectionism and subsidies.

It’s true, as commentator Jennifer Hewett said in “The Australian Financial Review” in mid-June, that “the politics and economics of energy (keep getting) more complicated.” The key question is what can and will the resources sector, with $400 billion of skin in the game, contribute from here forward to digging us out of this winter of our discontent?

And what will the business community at large do? Hand-wringing (or bed-wetting) is not a strategy.