Directors Report - Building Common Ground with a Minority Government - Graham Bradley - Business Council of Australia President

Recently I attended the Australian German Association (AGA) luncheon with Graham Bradley – President of the Business Council of Australia.
Graham has a lot of insights for business leaders. Graham has been a partner with McKinsey and Company. From there, Graham’s career has included national managing partner at Blake Dawson and Managing Director of Perpetual Limited before being elected as President for the Business Council of Australia. Graham is also Chairman of HSBC Bank Australia, and Stockland Corporation
Graham’s subject of discussion for the luncheon was:
Building Common Ground with a Minority Government.
Firstly, Graham explained about The Business Council of Australia, an organisation which represents over 120 of the largest employers in Australia - representing over 50% of exports and more than 30% of Australia’s GDP
Their membership is united in the need for a strong and productive economy that considers the impact of a regulatory regime on our economy.
Graham shared the similarities with Australian and German economies…
- Both Australia Germany have federal women leaders in minority governments that are emerging strongly from the GFC
- We both have a low national debt and unemployment
- Both economies advocate free trade
- Another very interesting similarity is our dependence on China
Looking at the Differences between Australia and German economies…
- Germany has a strong trade surplus. Despite 50 year high terms of trade, Australia remains an importer
- Australia has a strong currency whilst Germany is tied to the weakened Euro
- Australia’s interest rates are strong whilst Germany’s are weak
- Australia has a free floating currency whilst Germany is tied to the Euro
- Australia has a growing population whilst Germany has a stagnant population
- Australia has a resource based economy whilst Germany is a manufacturing based economy
Some issues affecting both our economies are similar.
1) China – with global imbalances, how does China lead beyond recession
2) US and Europe deficits
3) Strengthening banks without credit squeezing globally
4) How do we achieve energy security (Carbon Emissions)
5) Population Policy
The BCA have looked at several things they want the coming government to do to lift productivity, and support a stronger economy and community prosperity and they have been encouraging the government to focus on a few priorities.
The reality is, that with the Rudd majority government there was a lot of discussion, though these priorities were not put into practice.
The key areas of priority for reform in our minority government leadership are:
1) Gather community support behind future changes
2) Focus on a consultative government
3) Both parties need to look for common ground
It will be a disaster for Australia if we don’t take advantage of the opportunities we now have to react to the 5 key issues explained above now that we have a minority government.
So what are the 5 priorities that The Business Council of Australia sees as most important?
1) Give us a National Infrastructure Plan
Currently Australia is behind other countries with a growing population
A cost benefit analysis is required.
Infrastructure Australia can help with providing solutions, given the poor planning to date, particularly with State governments.
BCA recommend an audit of infrastructure priorities and recommend Infrastructure Australia as the best for doing that – independently.
Our future infrastructure needs with future population growth will require private economy investment to build this investment in our infrastructure.
2) Energy Security Policy
Future energy needs and costs for power uncertainty still exists.
If you look at Germany – nuclear power is key
Australian’s need to know more about where energy is going to come from and what are the costs.
3) Tax Reform – Development of a Common Ground
Graham suggests that BCA are critical of some elements of the Henry report but it remains a good starting point for a long-term comprehensive tax reform agenda.
An increase in GST is recommended in replacement for a reduction in other taxes that don’t disproportionately favour wealthy people. To date neither government party are committed and the BCA recommends the Tax Summit forum in June 2011 should put all options on the table to find solutions.
BCA responses to government have suggested an increase in GST and reduction in personal and corporate tax rates. These changes will require a process. With no process there will be no common ground.
4) Refocus Council of Australian Governments (COAG) – with common ground
COAG has become the dumping ground for every policy. With 80 ministerial councils and 82 priorities.
What’s more important is that the hard decisions do not get traction.
The BCA recommend COAG are re-focussed, particularly in the areas of competition reforms to energy and transport, business regulation, infrastructure, education and e-health.
5) Independent Office of Budget Integrity.
An independent group with a mandate on their own initiative to review government spending periodically is recommended.
Looking at the ‘Sacred Cows’ of funding should be embedded in review. Particularly considering 80% of budget spend is based on previous commitments.
All spending requires independent reviews
Whether all these 5 priorities come into place is to be determined.
One thing is for sure, in a minority government where both parties and their political partners are living in a fragility of government, the BCA are seeing more interest in working together with business.
I won’t go into the answers that were privy to people attending the luncheon during question time. To experience these discussions – attend future AGA events. Given the exclusive attendants – questions and answers always provide the best information to complement their presentations – under ‘Chatham House Rules’.
If you like this article you are also likely to enjoy:
A Luncheon with Dr Bob Every - Chairman of Wesfarmers and Boral
A Luncheon with Bill Evans - Chief Economist for Westpac
A Luncheon with Professor Roy Green - Dean - Business UTS

Another Directors Report by Grant Crossley





























