Liberal Business

Towards the end of the Coalition’s 13 years in the wilderness, Michael Kroger gave a thoughtful analysis of why we’d failed. He made the point that almost every Labor MP had been a political professional before entering parliament while most Coalition MPs came to politics after a career in the professions or in small business. After years of addressing union meetings, doing deals, and writing press releases, national politics "came naturally" to Labor MPs in ways it simply did not to people for whom it was a "second career".

The Kroger thesis was rightly influential at the time but the ALP’s political performance has declined since then (at least at the federal level) even though its domination by an "apparatchik" political caste has further increased. Today, more than 50 per cent of the federal front bench are former trade union officials. Except for a couple of barristers taking union briefs, every Labor member of the House of Representatives was a union official, political staffer or public sector employee before entering parliament. What’s more, federal Labor has 9 "hereditary peers" (MPs whose fathers were in parliament), four "noble families" (where siblings have sat in federal or state parliament) and at least five "royal couples" (where spouses and former spouses have sat in parliament) making it, on one view, more in-bred than the House of Lords.

By contrast, the Coalition counts people whose former occupations were shearer, crocodile shooter, meat-worker and cane-cutter (as well as the expected run of ex-lawyers, farmers, and presidents of local chambers of commerce) among its MPs (some 50 per cent of whom have business backgrounds). Because the Coalition has no homogenising equivalent of the union movement, its members can be individualistic and even awkwardly outspoken – but also far more representative of the Australian people at large. In different political circumstances, and under better political leadership, the factors Kroger identified as a weakness have actually become one of the Coalition’s strengths because there’s nothing that forces us to see unions (or any other group) as "more equal" than everyone else.

Edmund Burke famously described a political party as people working for the common interest according to a particular principle on which they all agree. As the name implies, the Liberal Party’s animating principle is freedom. As its name implies, the ALP’s underlying unity does not come from commitment to a philosophical principle so much as commitment to the interests of the labor movement. Historically, the Coalition has won strong support from farmers, professionals and small business people. Historically, the ALP has employed the rhetoric of equality to bolster its appeal. Even so, there’s a sense in which the Coalition (or at least its dominant Liberal component) has been motivated by an ideal while Labor is concerned with an interest.

Business, particularly small business, finds its natural political home in the Coalition because the Coalition shares many of its fundamental values. The Coalition has an intellectual or instinctive constituency rather than a sectional one – but that has not prevented consistent support from those parts of the Australian community which share its attitudes and values. Business doesn’t "own" the Coalition because it has been clear-headed enough to accept that political parties should not be bought. This political magnanimity has given business the freedom to work with Labor governments and to criticise Liberal governments in ways in which unions have never been able to work with the Coalition and criticise their own side. Business has generally understood that the national interest is bigger than any sectional interest – even its own.

At times, a misdirected sense of good citizenship has led business leaders to cooperate in "tripartite" structures – only to discover that in any threesome involving business, unions and Labor governments, its critics have the numbers. Small businesses and Burke’s "little platoons" which are at the heart of civil society are invariably forgotten when the corporate state concludes its deals. And unions are not what they were. After helping to civilise capitalism and to establish the dignity of work, they are now more interested in protecting their own institutional prerogatives than in a better deal for workers – which helps to explain, outside industries with a "claytons" closed shop, why workers have deserted them in droves.

Business has generally been comfortable with the Coalition on three grounds: Practically, the political dynamic means that Labor governments have invariably supported (while Coalition governments have often resisted) union demands. Intellectually, Coalition governments generally resist change for change’s sake in favour of the stability in which productive business tends to thrive. And instinctively, Coalition governments have an ingrained preference for private and community-driven initiatives over government action based on the assumption that "Canberra knows best".

For its part, the Coalition intuitively assents to the hard-won business truths: that you can’t give what you haven’t got, can’t keep what you haven’t earned, and can’t distribute wealth without creating it first. There’s a sense in which people who invent new products, design new processes and create new employment are the best philanthropists because they are helping to create the sense of shared endeavour and common purpose which constitutes the basic social fabric of every healthy community. As individuals, members of the Coalition stand ready to help anyone in need but our sympathies are most engaged by people who want no more than a fair go and who face life’s vicissitudes with the grit and stoicism that was once part of the Australian national character. We understand that some problems can’t be solved this side of eternity and that many "solutions" are more trouble than they’re worth.

The Coalition rejoices in people’s individual and collective success. We want people to have the freedom to do well – and we don’t mind if some do better than others as long as everyone has a fair go. Our support for capitalism owes far more to experience than ideology because, for us, it describes what happens when people have the freedom to use their property and their talents as they choose. There’s a sense in which capitalism is just a fancy word for freedom – that freedom of possession which should complement freedom of persons. The role of government is to ensure that people are genuinely free and not to insulate people completely from the consequences of free choice.

There is a natural affinity between conservatism and liberalism because freedom cannot exist without a framework of order, stability and fairness. Indeed, what’s most distinctive in the long history of the English-speaking branch of western civilisation is the evolving relationship between freedom and authority and the manner in which, as Macauley put it, "freedom broadens slowly down from precedent to precedent". In our culture, there is little tension between the liberal and the conservative political traditions both of which have a long and honoured lineage. In our culture, the "voice of poetry in the conversation of mankind" has always resonated with the lilt of freedom.

Work for the Dole is tackling the "something for nothing" culture responsible for much of the resentment corroding Australian communities. People on modest incomes resent paying high taxes to support people who, they think, could be making more of a contribution to the community. And unemployed people understandably resent feeling excluded and living on benefits which never seem enough. As a society, we can’t guarantee jobs but we should be able to ensure that everyone has something useful to do. Work for the Dole is about ensuring that people pull their weight and giving Australians more confidence that everyone has a place in the bigger team.

Industrial relations reform means giving people the sort of freedom in the workplace that is taken for granted in most other aspects of life. For too long, it was impossible to make a workplace bargain without a union as a partner to the deal – either doing the negotiating or setting detailed limits on what people could do. The Government’s Workplace Relations Act has made it possible for the first time to conclude legal contracts of employment completely independent of industrial awards provided the benefits are not inferior to them. Under Labor, pay rises without productivity increases meant higher inflation, higher interest rates and higher unemployment. Under the Accord, basic award wages actually fell 5 per cent in real terms over 13 years. Since 1996, more freedom has helped to deliver 800,000 new jobs and a 9 per cent pay increase to basic award employees.

Tax reform is the clearest possible sign of the Howard Government’s determination to do what’s right rather than what’s politically popular. The GST is not the product of ideology but of necessity – which is a perfectly acceptable conservative justification. The burden of taxation had to shift from income to spending if 50 per cent marginal tax rates for modest income earners (and even higher effective rates for people caught in both the tax and welfare system) were ever to come down. Both sides of politics now accept that the GST is necessary. The difference is that the Coalition believes that the dividend of tax reform should be income tax cuts while Labor believes that tax reform justifies higher spending and a bigger (and more unionised) public sector.

Since 1996, the overall tax take has remained more or less steady as percentage of GDP despite the introduction of the New Tax System. Importantly, government spending has fallen from 25.9 per cent of GDP in 1995 to 23.3 per cent now to almost exactly balance taxes raised – and this 2.6 per cent reduction in the income gap constitutes a $15 billion turnaround in public finances.

Despite a media tendency to revel in bad news and pander to the "poor little me" syndrome, the Government seems to have fostered a greater sense of national unity and pride. The liberation of East Timor removed a quarter-century-old sense of shame and repaid a debt of honour. Australia’s military involvement was minor compared to that in two world wars – yet it was the first time Australia had assembled and led an international military force. No-one told us what to do and no-one held our hand. The UN sanctioned the operation because Australia persuaded the international community that it was necessary to stand up for the common decency of mankind.

The Government’s readiness to assert Australia’s national interests and values, is starting to dissolve the widespread feeling (particularly among more conservative people) that "nothing makes sense any more". Far from damaging our standing in other countries, the Tampa affair has demonstrated that we are sick of being a soft touch and having our decency exploited by people smugglers. The Australian people seem to understand better than "opinion formers" that it’s impossible to preserve national sovereignty with a defacto immigration policy: "if you can get here, you can stay here". As for the "blame Australia" brigade, trying to be compassionate with other people’s money and other people’s rights looks more like moral vanity than Christian charity.

In important respects, this has been a conservative government as well as a liberal one. There are good "liberal" arguments, for instance, for giving parents more choice about their children’s schooling and mothers more choice about whether they go back to work. Still, this encouragement of religious schools and recognition of stay-at-home mums is also an acknowledgment of enduring social values. The liberal argument for over-turning the Northern Territory’s euthanasia law was that human beings should never be treated as disposable commodities. But for many, the chief problem was the Territory’s cavalier disregard of our culture’s most powerful moral and ethical commitment to the sanctity of life.

This Government has been more mindful than its Coalition predecessors that we are the Australian custodians of the conservative as well as the liberal political tradition. We respect values other than our own and will do our best to accommodate interests outside our natural constituency but, as Ronald Reagan once said to the Conservative Political Action Conference: we will never forget how important it is to "dance with the one that brung ya".