We're interested in solutions – not personal invective
8 September 2017
This opinion article by Jennifer Westacott was published in The Australian Financial Review on 8 September 2017.
When readers of The Australian Financial Review turn to the opinion pages, they expect an intellectually honest discussion about how to make Australia the best place on Earth to live, work, learn and invest in.
However, Thursday's column by the Australia Institute's Richard Denniss was anything but that. It made no serious attempt to analyse the pressing policy challenges facing our nation, nor did it offer any solutions as to the way forward.
The columnist, a former adviser to the Australian Greens, instead launched a polemic against the Business Council on the basis of politically expedient half-truths and personal invective.
As Australians face the big challenges of this century – including technological disruption, demographic pressures and environmental sustainability – we desperately need to raise the level and tone of debate in this country.
The stakes are huge. The Australian economy isn't an ideological laboratory, but a community of 24.6 million people who depend on strong, successful businesses to deliver employment, products, and tax revenue to underpin government services.
Those people deserve better from their intelligentsia than facile ideas and back-of-the envelope analysis designed to support their predetermined conclusions.
The gas debate is a case in point. Denniss claimed that higher gas prices were a direct consequence of energy companies moving to export Australian liquefied natural gas abroad, as Origin Energy did under the stewardship of Grant King, now president of the Business Council.
However, a holistic analysis would also point out that Australia's east coast gas supplies have really opened up only as a consequence of that increased demand, with Australia producing 2600 petajoules of natural gas in 2014-15, up from 1600 a decade earlier.
The boom in exploration, production and exports has also delivered thousands of well-paying jobs for Australians, helped to revitalise regional communities and provided steady revenue for farmers that withstand the boom-and-bust cycles of agriculture.
The gas shortage has been made substantially worse by state governments, egged on by activist groups such as the Australia Institute, imposing unscientific bans on new gas development – a problem explicitly identified in the recent Finkel review. Ironically, thanks to misguided climate activists, for the first time in 15 years we're back to talking about prospects for new conventional coal-fired stations.
Opponents of the gas industry have now joined the anti-vaxxers and climate change deniers in a world where scientific advice is ridiculed and alarmists are venerated as truth-tellers. State governments should heed calls to repeal these bans.
Criticisms of Grant are also unfounded. As the Financial Review editorialised on Monday, his tenure at Origin was a success, turning a $700 million collection of second-tier energy assets into a $13 billion company.This newspaper rightly warned that, in the populist search for scapegoats, activists risk penalising businesspeople who take calculated risks to grow their companies.
And as the Financial Review's Angela Macdonald-Smith reported, from Origin's listing until mid-2016, total shareholder returns were about 650 per cent, more than double the ASX100 index. Market capitalisation grew more than 14-fold, customers more than trebled and generation capacity expanded 20-fold.
Denniss also criticised the business community for supporting the government's plan to reduce the company tax rate, which the Australia Institute claims will not contribute to job creation or economic growth.
Treasury estimates the government's tax plan will permanently increase Australia's GDP 1 percentage point – equivalent to $17 billion a year in today's terms. Two-thirds of the benefit is expected to fall to workers through higher real wages.
Higher corporate taxes deter businesses from making new investment, and the Coalition's Enterprise Tax Plan remains the only option on the table to boost new business investment, which, despite some recent gains, remains at its lowest level as a share of GDP since 1993-94.
The business sector employs five out of six working Australians, contributes more than 80 per cent of economic output and accounts for the bulk of tax revenue. There can be no doubt that, whatever we want to achieve as a country, a thriving business sector will be at the heart of it.
When readers see the Australia Institute quoted in the press, they would be forgiven for placing it in the pantheon of think-tanks such as the Lowy Institute or Grattan Institute. However, its commentary emanates from the ideological fringe.
It is something of a refuge for Greens in exile, with its senior staff overwhelmingly former advisers or campaigners for the Greens.
Let me be clear: I do not criticise people for having worked in politics, nor do I doubt they have Australia's best interests at heart. However, their approach is consistently undermined by a deep hostility towards business.
By contrast, the Business Council collaborates with a broad range of businesses, politicians, unions and the community sector to advance whatever common goals we can identify.
I'm often asked why we continue to play the ball, rather than the man, when our critics don't hesitate to engage in personal attacks.
My answer is that we're interested in constructive solutions that draw on our members' experience of the real economy. We're willing to engage in a contest of ideas, not one of personalities.
Jennifer Westacott is chief executive of the Business Council of Australia