This opinion article by Chief Executive Jennifer Westacott was published in The Weekend Australian on Saturday 3 December 2016.
Is Australia next?
People are now legitimately asking this following the year’s seismic political shifts
in the United States and Britain.
Although the complex forces at play in both countries remain unclear, both decisions reflected a
rejection of the establishment – mainstream politicians, big business, commentators – and a failure
to make middle-class and low-income people feel better off. Both nations were deeply divided and
lacking a sense of shared prosperity.
Some commentators argue that our own election result and rising support for minor parties
suggests we will follow the Trump and Brexit path. However, I believe Australia is a very different
Britain’s national character – informed by aristocracy, class hierarchy and colonialism - never made
it a good fit with the European Union. Americans, like Australians, forged their own identity. But
where they emphasised freedom, our society was built around fairness.
The US was deeply divided from its outset. Its civil war ended slavery but left a weakened South
and ingrained discrimination. Our nearest comparison, the Eureka Stockade and great industrial
strikes of the 19th century, presented a choice: to adopt England’s hierarchical class structure, or
recognise and defend workers. By choosing the latter, Australia defined itself by fairness.
The issues that divide Americans – race, geography, economics – nurtured its anti-establishment
backlash. While Australia may have inequality problems and pockets of entrenched disadvantage,
we do not share these divisions.
Australia’s different value system and societal structure – evidenced by Medicare, mass education
and the welfare safety net – are our greatest protection against division.
Our quarter-century of economic growth – underpinned by reforming governments in the 1980s and
1990s, and our mining boom – has largely been shared around the country, further reflecting our
Average real income growth for Australia’s poorest households exceeds that of the highest-income
households in most OECD countries. In the US, the top one per cent of earners snared 85 per cent
of the growth between 2009 and 2013.
The global financial crisis inflicted immense hardship on many, particularly in the US and Europe,
who felt those responsible for the turmoil escaped without punishment. They felt the establishment
destroyed their lives, stole their homes, yet continued their privileged existence.
Even if we lack the antecedents to adopt America’s example, it doesn’t mean we can be
complacent or arrogant about the future. We must protect our capacity to grow while ensuring that
everyone enjoys better quality of life, a sense of fulfilment and purpose, freedom of choice and new
Our economic success has been undergirded by business investment and innovations that have
brought costs down. Opening our economy to global trade encouraged competition while delivering
greater consumer choice and lower prices. Opening our door to skilled migrants brought new ideas
and a more productive labour market. This is how the average Australian's real income per capita
has doubled over the last 40 years.
Growth is needed for a social safety net, for people to have increased spending power, an educated
populace and empowered individuals with more choice than ever before. However, there’s no point
quoting statistics at people to convince them they’re better off. We need to listen to them with
empathy and understanding – not arrogance, blame and denigration.
People typically look to their leaders and institutions for comfort. But one of our biggest challenges
right now is that people have lost faith in our politicians, religious leaders, businesspeople and civil
Although we are not divided in the same way as the US and Britain, minor parties on both sides of
the political spectrum are gaining support with populist policies. This drift cuts across city and
country, low and high income groups, left, right and centre. People think governments have run out
of ideas and credibility. They have certainly run out of money to throw around.
Big business contributed to this growing distrust of institutions through the behaviours in some firms
ahead of the Global Financial Crisis. We cannot walk away from that fact. This combination of
people feeling worse off, decreased trust in institutions and questioning of the tools of economic
growth, is our essential dilemma.
My fear for the country is that if we walk away from the very things that have protected us, we’ll
actually fail the people who need us the most. We need a new global mindset and a better
approach to leadership across our institutions.
Leaders must tell the truth about the futility of trying to protect jobs and industries in a global marketplace. We must open up, not shut down trade. We should embrace digital technologies with the aim of producing goods and services in new and
different ways. Skills and capabilities should be as valued as goods and services.
The formula for prosperity is simple to describe, but not simple to achieve. At its core are successful
businesses that invest and innovate to drive economic growth. Growth leads to more, better and
higher-paying jobs and the capacity to achieve social goals.
We need incentives to drive global competitiveness so businesses can continue to deliver 80 per
cent of economic output. A world class education and skills system ensures people are resilient to
global forces of change. Flexible and creative workplaces improve productivity and create better
jobs and higher wages. Stronger budgets ensure the government is capable of caring for our
citizens each year.
Better leadership must be grounded in a deep understanding of global trends and how people feel
about it. Leaders must show how technological change leads to progress, give a sense of vision
and purpose, and step through how we are going to respond. This hinges on a commitment to the
Australian values of fairness, honesty, compassion, respect, responsibility and courage. Leaders
also need intellect, empathy and aspiration.
Old mindsets that start with protectionism and isolation will be our undoing. It is greatly unfair to
spread false promises that anti-business, populist policies hurt nobody - its victims are the poorest
people with minimal choices, not the most affluent.
I don’t believe we will head down the path of the United States. But I also don’t believe we can
afford to risk it, for the sake of short-term populism.