Knowing who your friends are.

Some of life’s lessons can only be learned the hard way, the knowledge can only come from experience, which is sometimes very painful. It can be hard to watch someone you care about putting themselves through the sort of experience that leads to these insights, wishing you could simply make them understand the reality that was before them, but knowing that they’d have to figure it out for themselves. This is exactly how it has felt to be a supporter of the ALP while they’ve attempted to introduce a new tax on mining, the Federal ALP has learnt who their friends are, sadly for them it isn’t a long list.

Oh sure, it must have felt wonderful for the last couple of years having Heather Ridout nodding on cue every time that the PM made an announcement, and I have no doubt that you all loved reading her press releases that contradicted the opposition as they were busy behaving like a bunch of injured seagulls fighting over a chip as they attempted to decide on a leader, but you should have known it couldn’t last forever. As soon as you introduced policies that might harm the bottom line of corporate Australia they showed you where they stood, and it wasn’t by your side.

The naivety displayed by Rudd and Swan was almost touching as they put together a policy which not only improved the way the Australian people are compensated for the mineral wealth that our nation holds, but also had some very positive changes for the broader business community. The ALP knew they would face a fight with the big miners, but did they really believe that they’d receive support or plaudits from the rest of the business community? Did Kevin Rudd and Wayne Swan really believe that small mining companies, who received some incredibly generous terms from the RSPT, would defend the new policy and risk upsetting the larger miners who they will one day hope to attract as joint venture partners or sell out to?

The stark reality is that corporate Australia doesn’t like the ALP. They’ll tolerate a Labor government and they’ll even cozy up to it while the Liberals are going through one of their periods of opposition induced self immolation, but it never lasts. Did the whiz kids running the ALP machine believe that all of the donations before the 2007 election were a sign that the business community were looking to forge a new partnership with the ALP? They should have known better if they did, the corporate world knows which side its bread is buttered on and was just hoping to play nice in the hope of not having to face any real reform.

Rudd has been criticised, especially in the wake of today’s agreement, for being too confrontational with the mining companies, I say that’s bollocks. If anything Rudd wasn’t confrontational enough. If the RSPT had been a basic 40% tax on profits beyond the bond rate, with no sweeteners at all, today’s deal may have ended up looking like the original Rudd proposal. There’s no point for the ALP to try to play nice with corporate Australia because their efforts will never be appreciated and they will never receive any support when the going gets tough. If you want proof of that you need look no further than the gaggle of industry groups who today came out whinging about elements of the reform policy which have had to be scrapped to allow the miners to have their way. Not one of these organisations has been heard from supporting the RSPT, they sat on the sidelines rather than helping to secure something in their own interest, and now they bleat about the fact that they’re not getting all that they thought that they would.

The question that needs to be asked is whether Prime Minister Gillard and her cabinet will learn this lesson? The ALP need to start behaving like a real Labour government and place the good of ordinary citizens first, because it’s become brutally clear that the corporate sector will not lift a finger to support this government. What makes the whole affair even more disappointing is that the government already had a template about how to deal with big business in the shape of Stephen Conroy. The way that Conroy effectively sidelined Telstra via the National Broadband Network was brilliant, he played hardball and looks to be on track to achieve the reform of Telstra that is so sorely needed. Compare that to the antics of Sol Trujilo and Phil Burgess when dealing with the previous government and you realise how effective Conroy has been.

This same lesson is playing out again with News Limited. The News Limited tabloids tentatively jumped on the Kevin 07 bandwagon because they don’t like backing a loser, but the honeymoon lasted until about December 2007 before they started going feral. The ALP needs to treat News Limited like the hostile organisation that it is and deny it the sort of access, and government advertising, that it craves.

It’s time for the ALP to remember its roots, to sell their policies based on what they will do for the Australian people, and prepare for the onslaught from self interested lobby groups who will never be truly satisfied while we have a Labor government. It’s time for the ALP to remember who its friends are.

8 thoughts on “Knowing who your friends are.

  1. Well said.
    It was an easy policy to sell if they had the balls to confront big mining head on.
    I think the advertising campaign really did scare them.
    But the ALP need to remember that even though they have given the mining companies what they want, they still will not have their support. Especially not in an election year.

  2. I respectfully disagree, to a point.

    The days of an ALP Government being worker/union friendly and a Coalition government being business friendly are long gone.

    It’s not that the corporate world favours one flavour of government over another – in fact they see all governments as being anti-corporate to an extent.

    The business world believes that government does not understand it and is only interested in regulating and taxing it.

    Business cannot be considered the natural friend of any government.

  3. Thanks for this post, Dave. It had to be said.

    Kevin Rudd did say “reform is hard” and I think all governments are finding it harder and harder to make genuine changes to established structures. But the way the ALP has gone about both the CPRS and RSPT reforms exposes them as pretty amateurish. At least the RSPT saga was quick.

    To me there were two standout failings this time round – They built no support base for reform before launching into it. It is axiomatic that Loosers will always scream louder than Winners in any reform process regardless of net benefits to the community or the economy. A lot of groundwork is needed to ensure you have a broad and supportive constituency before taking on vested interests. Taking on cashed-up rent seekers is always tough, but to do so without some support in other sectors (and even in their own sector) is like pushing the proverbial uphill with a pointed stick.

    The second mistake was their timing – something this government has been generally poor at anyway. Sitting on the Henry Review for six months and then coming out with the RSPT six months from an election was, frankly, stupid. Rudd was always negotiating from a position of weakness.

    Gillard appears, for now, to have pulled this out of the fire and there are a few good aspects to the compromise. I just hope they develop some reform smarts – or get it from somewhere – during their second term.

  4. Dealing with the likes of Telstra is reserve grade stuff compared to tackling the big league. To start with the Government is still a major shareholder. The reality is, in my opinion, that the ALP MUST recognise it cannot take the corporate giants head-on and hope to stay in power. Not much point having friends if you’re in opposition. Hawke new this too. So did Keating. They managed to satisfy the corporate world while still delivering on reform.

  5. Spock, I shared your frustration at all of the lobby groups crying poor about the things that they’d lost in the new MRRT deal, but I think that the ALP should have seen this crap coming. Rudd and Swan were naive, I only hope Gillard is more pragmatic.

    Dragonista, I think that there’s no doubt that most of the business community prefer the Liberal Party’s anti-worker stance to the ALP, no matter how weak their union links have become in reality over the past decade.

    Aubrey, I think that if Gillard wants to achieve anything of lasting significance she needs to go hard and fast as soon and the new senate is installed and ram through whatever she can. That’ll take a lot of buttering up the Greens, but that may not be a bad thing.

    Ray, if rolling Telstra was so easy the Libs would have been able to manage them, the realty is very different. Conroy’s decision to change the NBN to a fibre to the home network was brilliant and I believe that in 15 to 20 years will come to be seen as one of the most significant government decisions in decades.

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