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Some Advice for Malcolm Turnbull

In the past I was foolish enough to write a number of essays purporting to give Tony Abbott some advice as to how he should do his job better when he was Prime Minister. It was, as you know, a waste of time. Despite these setbacks I find I cannot resist the opportunity to offer a little friendly advice to Malcolm Turnbull. (Yes, I know. I am a slow learner and an idealistic fool!)

It is impossible to cover all the issues in one short essay. So on this occasion I will try to confine my comments to a few headline items, viz.:

  • The national debt,
  • Trade Unions,
  • Industry policy, and
  • The Federation.

But first let me make some overarching comments.

Malcolm, you have adopted a more consultative style than Tony but you suffer from the perception that, whilst it is admirable to “leave everything on the table” and “not rule anything in or out” you are not very decisive. I applaud you for not ruling out options and encouraging debate but sooner or later you must put together a set of policies that you and your colleagues are prepared to stand behind, promote and legislate for. Good processes are important but in the end you must lead by articulating a coherent set of policies that we, the voters, can relate to. It is then imperative that you and your colleagues can clearly explain the rationale behind these policies in simple language to the electorate. Mouthing motherhood statements about excitement, agility and innovation is no substitute for well-reasoned policies supported by a convincing narrative frequently and consistently delivered by you and your colleagues. The urgency for such an approach has now escalated with the threat of an imminent double dissolution.

Now some of these policies, if they are to make a difference, will disadvantage some folk. There is no way to avoid this and the only defence of such policies is to be upright and honest, taking reasonable steps to manage the disadvantaged. But if you are to be a good Prime Minister you must be reconciled to the fact that you will not be loved by everybody! Do what is necessary to promote the national interest and not be too concerned with the opprobrium that might result with disaffected minorities.

Finally when you decide what really matters, don’t expect to achieve it in a day. We are essentially a conservative society and worthwhile change might often take some time to achieve. When you know what needs to be done, be resolute. It is time that some Australian stood up to be counted for meaningful change and bunkered down for the long term rather than always succumbing to populist demands.

Well now, what about the debt? In international terms Australia’s debt is comparatively small. Our problem is that the policies of neither the government nor the opposition seem likely to reduce the debt in the next decade or more.

It is hard to believe now that before Kevin Rudd became Prime Minister we had no net debt and a series of budget surpluses. The Rudd Labor Government blew all that with its stimulus spending in response to the Global Financial Crisis. Now Keynesians would argue this was a necessary step to avoid recession in Australia. In retrospect most would admit the spending was excessive and poorly directed so that the spending produced few lasting benefits to Australian society. We could debate this ad nauseum, but putting it aside we are still faced with the problem that Government spending has been maintained at the so-called stimulus level even after the threat of recession has passed. So what was initially portrayed as additional spending to stimulate the economy has now become accepted as normal. A refusal by both the Government and the opposition to seriously address this issue means that we are doomed to deficits and increasing national debt for decades. Is this the legacy we want to leave future generations – the prospect that they will have to pay for our profligacy?

One can understand why Labor Governments like to spend big. Increasing the size of the public sector inevitably increases union membership. But one wonders why Liberal Governments should be trapped into a strategy that puts more resources into the public sector at the expense of private enterprise.

It is also a truism that a benefit once granted seems to automatically then become a right so that reducing benefits becomes increasingly difficult.

It is a cause of great concern that recent reports suggest well over 50% of the Australian population are either dependant on the Government for employment or have as their main income welfare payments. No wonder reducing the public sector is so difficult!

Come on Malcolm – it is time to muscle up and do something about the burgeoning public sector! You know as well as anybody that wealth is not created by Government. Government can facilitate or impede wealth creation in the private sector but other than that it’s only role is wealth redistribution. We need governments to get out of the way of private enterprise and look to ensure that with minimal interference business does not unduly take advantage of employees and customers.

Well, let us now have a look at Trade Unions.

I spent a lot of my life as an executive dealing with unions. And let me state at the outset there is definitely a place in our society for unions. I have seen many examples of where exploitative employers have taken advantage of employees. Such employees are relatively powerless in the scheme of things and having a union stand beside them when they have unduly been taken advantage of is a good thing.

But it seems to me that protecting the rights of the relatively powerless has become a secondary consideration for many unions. Much of their efforts appear to be directed towards enhancing the power of their particular fiefdoms, advancing political agendas that have little to do with their membership by expanding their influence within the Labor party and thwarting the genuine business interests of employers. Whilst their tactics are often illegal or at best dubious, they seem immune to the law. The police often turn a blind eye to their misdemeanours which often involve coercion, blackmail and similar thuggery which also seems to draw little attention from competition regulators when their activities are clearly anti-competitive. Their cause is often aided and abetted by large employers who effectively bribe the unions to ensure industrial peace.

Whatever you believe the motivation for the Heydon Royal Commission, it cannot be denied that it has uncovered and made public hundreds of instances of illegal behaviour which must not now be ignored. The Labor Party has tried to avoid criticism of the unlawful union activity by questioning the integrity of the Royal Commission and in particular, the Royal Commissioner.

In previous essays I have pointed out the pressing need to improve the productivity of Australian industry. To my mind, a key element of this is thwarting the power of unions to unlawfully impede business activity.

The conspiracy between Labor and unions to unjustly interfere in business is vividly exemplified by the formation of the Road Safety Remuneration Tribunal. Under the guise of a safety initiative Julia Gillard and the TWU conspired to compel owner drivers in small trucking businesses to pay exorbitant wages which would have seen many of these businesses fold. The objective was to force truck drivers to work for the major trucking companies who are, of course, unionised and have cosy relations with the TWU.

The Coalition in Government has been slow to address this issue. They have tried to excuse their tardiness by the hostility they face in the Senate. They need always to take a stance in support of small business whether they can deliver on it or not. That needs to be part of their political positioning.

So Malcolm I was disappointed that you initially only seemed to want to put off the date of implementation of the RSRT’s determination rather than act to abolish this offensive body. Now that you seem assured of crossbench support you have changed your tune. I think it is always important that you stand by your principles whether you get support for them or not. You now have allowed the generally unprincipled crossbenchers to lead the push that you and your Government needed to prosecute.

But even more importantly the Coalition must now make good on its promises to restore the Australian Building and Construction Commission and pass the Registered Organisations Act. There are many other overdue interventions in the Australian industrial relations scene, but these would be a good start!

Now a few words about Industry policy. Please don’t try to outbid the opposition in a rush to support failed enterprises.

Right now, you are trying to deal with the fall-out of the closure of Queensland Nickel and the parlous position of Arrium Steel.

Queensland Nickel is a basket case all of Clive Palmer’s own making. By all means provide support to the retrenched workforce by ensuring their entitlements are paid. And by all means pursue Clive Palmer for restitution of all such payments. It is unlikely, despite the protestations of Bob Katter, that the plant can be restored to profitablilty without a major increase in the price of nickel.

With Arrium I am very wary of creating artificial markets for its products in the government sector. Such a relationship will shelter Arrium from the realities of the market which will either make it more vulnerable or more probably set the scene for its long term dependence of the public purse.

A review of successive government’s dalliance with the automobile industry should caution against government intervention.

QNI and Arrium are exemplars of large unionised plants. Because of the strength of the unions in such workplaces very generous wages and conditions apply and workplace flexibly is thwarted. This is not helpful when competing in global markets.

When considering manufacturing industry the government would do well to reflect on the cost of energy. When most of Australia’s metal processing facilities were commissioned, Australia was one of the world’s lowest cost energy nations. This is no longer the case.

In trying to sustain some manufacturing industry in Australia the government should also give consideration to coastal shipping costs. Shipping freight rates around Australia’s coastline are, largely as a result of the successful militancy of the MUA, prohibitively exorbitant. This state of affairs might produce pockets lined with gold for members of the Maritime Union but it inhibits industrial growth and leads to less than optimal levels of employment for other workers. There was a recent story in the papers of a Perth brickmaker who could import bricks from Spain for much less cost than he could ship them to Sydney.

Just let me suggest a couple of tips for you in considering industry policy.

Firstly, whether you like it or not manufacturing is largely the province of developing countries. Just look at the history of the development of the economies of countries like Japan, South Korea and other South East Asian countries. Their economies developed on the back of their manufacturing industries. Then as they became more wealthy, their wages increased and the manufacturing baton was passed on to countries with lower wages. If, as you suggest (and most would support) that you wish Australia to be a high wages economy you can’t get there by doing basic manufacturing. It is possible to support some manufacturing in niche areas or where we have special skill or intellectual property. But any push to take us back to the sixties as a manufacturing country (which is certainly the ambition of many unions) is doomed to failure.

Secondly, if you are serious about creating or supporting Australian industry you need to promote an integrated package that:

  • Encourages workplace flexibility and competitive wages,
  • Ensures our education system delivers people to industry with appropriate skills sets,
  • Minimises energy costs (which are compromised by increasing our renewable energy generation),
  • Makes sure freight imposts on industry are kept at reasonable levels (which have been compromised by the MUA in respect to coastal shipping and the TWU with respect to road freight), and
  • Ensures infrastructure shortfalls and bottlenecks are addressed.

There, that should be a piece of cake! Or perhaps not. As one of your Liberal predecessors said, “Life wasn’t meant to be easy!”

Finally let’s look at the issues regarding the Federation of Australian States.

Most of us agree that Australia is over-governed. Three levels of government seem superfluous for a nation with such a comparatively low population. But I guess our dilemma is that that population is strewn over a huge geographical area and parochial interests call out for regional representation.

Nevertheless, even from my idealistic point of view, I see little likelihood of removing a tier of government.

But a more pressing problem with the Federation is the so-called issue of “fiscal imbalance”. This arises because the States are very dependent on Federal funding for their finances. Much of the expenditure of the States centres on education and health, both of which are burgeoning.

Every year the States go to the Federal Government to plead for the funding they believe they need to meet their aspirations for funding. Unfortunately it is always easy to spend other people’s money. Because the States don’t have to plead their case with taxpayers for a large amount of their spending, there is little incentive for them to be frugal.

So Malcolm, even though it looked like a “thought bubble”, and you did little preparatory work to promote it, I believe your proposal to give the States the taxation powers they need to raise all their own revenue is commendable. Of course, most premiers didn’t like the thought that they might have to plead directly to taxpayers for what they believed was their required funding – they would rather the Commonwealth do those hard yards.

I think it would be an eminently sensible thing for States to have the capacity to raise all their own revenue and to have to argue the case to their constituencies for the money they believe they need to provide the services their electors demand.

I am sure this would bring a greater discipline to the spending of the State Governments.

Remember what I said early on about being there for the long term. Even with the grafted on conservatism of the voting public, I believe this is an issue you must continue to pursue. And surely you have the intellectual horsepower to counter Bill Shorten’s accusation about double taxation when it is nothing of the sort!

Well Malcolm, you came to us as Prime Minister with a lot of unfortunate public expectations. It was unrealistic that you could meet all these. It is time now for the rubber to meet the road and prosecute your case for a further term of government. We wish you well, but you really need to lift your game. I can’t bear the thought of a Bill Shorten primeminestership with the CFMEU, MUA and the AWU pulling the strings.

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  1. 2 Comment(s)

  2.   By diane tinkler on Apr 17, 2016 | Reply

    I really hope he reads this, Ted

  3.   By Brad Carter on Apr 18, 2016 | Reply

    Hi Ted
    This is sound advice and intuitive as was the advice for Tony and it now poses more questions in my mind about the effectiveness of the system of government that we have particularly at Federal and State levels. Are we starting to see a trend that regardless of the elected government or its leader, we have a situation where it is now almost impossible for any government govern effectively and introduce new sensible policy and legislation while retaining the confidence of the electors to stay in power? The public are unforgiving and the media seem hell bent on discrediting leadership for no other reason than media sensationalism. If our system of government is failing, how do we change it or are we heading towards anarchy?
    Brad

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