Skip to content

A country is not a business

April 19, 2013

By Barry Tucker

A country is not a business. I said that. I Googled it and found a lot of people and institutions say the same thing. Of course, you will find others who say the opposite.

Here’s the result of a Google search on: Running a country is not like running a business: http://bit.ly/13s7foH

I won’t go into the economic technicalities of the thing. I can’t anyway. I gave up on Economics 101 due to my impatience at not finding any references to human beans. That was some time in the mid 1980s. If I’m right, human behaviour has only fairly recently started to be taken into account as a factor in economics. Who would have thunk it? Human beans make money and spend money but they probably are not an economic factor — yeah, right!

In Australia, recently, we have had a heated discussion about the likely failure of the federal Labor government to produce a Budget surplus this year. Banks produce surpluses. Labor governments provide services and pay down the debt, if they’re allowed to. Some say Labor has never done it and probably never will. I think former Labor Treasurer, Prime Minister and millionaire Paul Keating did it, but he was always good with numbers. And then the ’89-’93 recession kicked in.

So, Australia has a debt of around $260 billion at present. We also have a cosy relationship with the world’s biggest consumer of raw materials, China, and every country on the planet is jealous of our triple AAA rating. By contrast, the world’s biggest economy, the USA, has a debt of around $US16 trillion, it gets bigger every day, and the country is on the verge of civil war.

What’s our problem? Our present level of debt is not a problem. Federal Labor’s tendency to go on spending and announcing one giant expensive policy after another is a problem. It’s a political problem because in the game of politics it gives the Liberal National Party (LNP) Opposition another free kick. As if Labor needs another kick in the head in the lead-up to the federal election on September 14.

The failure to produce a surplus and the national debt become problems when the Opposition makes political capital out of them. The debt itself is not a problem but what the LNP will do about it if it gets into government is a problem. To get an idea of what will happen look at what IS happening under the State LNP government in Queensland and, to a lesser extent, in New South Wales and Victoria. It’s curious that three of the wealthiest States are experiencing a slash and burn policy to “fix” the Budgetary problems “created by their previous Labor governments”. In my lifetime, it was always so.

Some evidence and discussion is emerging to the effect that slash and burn politics have been responsible for beginning the slide into recession. I can’t wait to see the worldwide graph on that one. I’m prepared to believe it at this early stage. If you start sacking thousands of people you scare the beegeezus out of everyone else; they start hoarding their money; small businesses feel the pinch and the economy heads for the downpipe.

Every three years or so the people of Australia turn out en mass and make a decision about who will run the joint for the next three years. Then the political analysts get stuck in and decipher the results for us. Usually, they decide that the voters were clued up and knew exactly what they wanted — even to the point of electing to have a log jam in the Senate to prevent the ruling mob from running amok. Pretty damn clever really for a bunch of people who say they’re not interested in politics.

The problem with politics in Australia is not that too many people take too little interest most of the time. The problem is this cursed Duopoly: Labor’s progressive socialists in the red corner and the Liberal conservatives in the blue corner. Labor seeks to govern for all the people (tending to take care of the poor and downtrodden, usually at the expense of the wealthy, industry and business) while the LNP Coalition tends to govern for the wealthy business class (usually at the expense of everyone else). I know that’s a gross over-simplification but this is a brief blog, not a political text book.

In order for one mob to tip the other out of office they generally have to produce a better set of policies or, increasingly, a more appealing team of pollies — people who look good on camera and who can produce snappy sound bites. That has been the case until the LNP leader, Tony Abbott, scored a draw in the 2010 election but lost the negotiations with the Independents — interestingly, on the question of “trust”.

Until the extraordinary early release of this year’s election date, Mr Abbott had been trying to win government by destroying the government — typically by attacking the character of the Prime Minister, Julia Gillard, her former Speaker, Peter Slipper, and a former backbencher, Craig Thomson. Those were not financial matters, but they were part of Mr Abbott’s bid to get control of the Treasury benches (another term for government).

Carbon pricing (the “toxic carbon tax”) and its effect on electricity bills, government spending (compensation) and the Budget bottom line are financial matters. In these cases, Mr Abbott blatantly and arrogantly lied (and got away with it). His deliberate distortion of the effect of carbon pricing on electricity bills was also part of his campaign to destroy the government.

Taken together, the character attacks, the lies and the distortions tell us a lot about Mr Abbott’s character. Add to that the recent switcheroo from nasty attack dog to nice Mr Abbott in the white shirt and blue tie and you have an almost complete picture of author David Marr’s “political animal”.

You also have a picture of the chosen leader to represent Big business, industry, trade, commerce, small business and the wealthy class. The reason for the news media bias that many are complaining about is that the leaders of business and industry want one of their own installed as the head of government. The news media was indignant about the Right-wing ordered overthrow of former Prime Minister Kevin Rudd — and rightly so. However, the news media has had plenty of time to get over it. After all, the recent coups against the former Victorian LNP Premier and the former LCP Northern Territory Chief Minister were over and forgotten within 48 hours.

I started writing this after I was reminded of an interview I had with one of Australia’s leading businessmen, in the franchising industry. When I walked into the foyer of his office I was confronted with several men glaring at me with absolute menace and contempt — a deliberate and I think contrived attempt to intimidate me, a complete stranger. I thought I had stumbled into some Mafia HQ. On another occasion I had been casually chatting with a leading industrialist and his associate when the industrialist (a friend) suddenly realised he hadn’t introduced us. At this point the associate changed his demeanour, glared at me, looked me up and down with contempt, and grunted.

Those examples stick in the mind, obviously, but they are not typical of the mind-set of every “business person”. The industrialist is a great guy, a man of the people who has built an empire out of his backyard and a dozen chooks. But it is true that businesses are built and run by hard men and women. I’ve heard it said that it doesn’t take brains to make money or build a business, it takes balls. It’s also said that business is warfare, there are no prisoners and there’s plenty of collateral damage. During the loans churning era of the mid-’90s I met a senior bank executive who said he was prepared to hire and “burn” as many newly graduated economists as it took for him to reach his personal goals, including early retirement. Nice.

So, in a few months we will find out if the people who aren’t interested in politics have decided to let the accountants run the place while they balance the books again or if they will give Labor more time to sort itself out and settle down to running the country for all of the people.

Advertisements

Comments are closed.

%d bloggers like this: