Business Council of Australia
A climate of anxiety about the operations of one part of the economy, in this case the banks, is exactly the wrong context for governments to be making important decisions on regulation.
Consumers have genuine concerns about industry practices which need to be addressed, but before imposing more red tape that will have a big impact on the whole economy – and could backfire on us all – it’s important to step back and look at the big picture.
That broader perspective will help us make the right decisions for the long term, but it won’t happen if politicians decide to ride populist, anti-business rhetoric that is really in no one’s best interest.
Sound, carefully-considered regulation has to strike the right balance.
It has to take account of the needs of businesses to be competitive and it has to meet the community’s expectation that business will act properly.
The big picture tells us that superannuation has made us all shareholders in virtually all of Australia’s major companies.
As such, we all reap the benefits when these companies are strong. We all have a stake in their success, and rights and responsibilities in keeping them viable. In the last four years, banks have paid more than $55 billion in dividends to ordinary shareholders.
In general, Australia’s regulatory regime has stood us in good stead compared with other countries, especially through the global financial crisis.
At the time, business supported the government’s efforts and played its own role in facing what were daunting challenges by reducing staff hours instead of laying people off.
Last year, when many overseas banks had to be bailed out by taxpayers, Australia’s retail banks paid $8 billion in tax – revenue governments are using to provide us with the services we need. Almost 10,000 Australians started new jobs in banks, taking their total number of employees to around 150,000.
None of this is to say that large businesses don’t need to listen and respond to community concerns.
Despite Australia weathering the global financial crisis, it depleted consumers’ confidence. Longstanding institutions, largely overseas but some in Australia too, went under because of poor management and greed – the word cannot be avoided.
Business leaders must be, and are, mindful of community concerns that stem from these failures. We need to rebuild trust and earn back reputation.
Again, if our political leaders choose to stir up anxiety rather than addressing it in a considered, consultative way, we will not achieve an outcome that is in Australia’s long-term national interest.