Re-Building Trust
I’m excited to be back in the resources sector. I’ve lived in the Hunter Region all of my life. I know better than most how important the mining sector is to the Australian economy and I’ll continue to champion its cause.
Each morning and afternoon the Hunter’s roads are clogged with vehicles ferrying hi-vis clad passengers to and from their workplaces. Coal mining has brought a level of wealth to the Hunter Valley – and many other regions – we could only have otherwise dreamed of.
In other provinces, our minerals and petroleum products have done the same. By any measure, that wealth has been built on the back of resources exports.
Last week the Prime Minister addressed the Queensland Resources Council. He began by telling those gathered what a great bloke he is and then proceeded to say how important the resources sector is; as if we didn’t already know. The latter I mean, not the former.
Then after attempting a gag about goat’s cheese-loving consumers, he talked a little about his February 2019 Recourses Statement, which is more a series of statements of the obvious than a policy document. Be wary of a Government which after 6 years in office, delivers a 5-point action plan.
But that wasn’t the key point of the Prime Minister’s speech, he was just warming-up his audience for the crescendo – what he believes to be the biggest threat to the mining sector; radical protestors and activist shareholders.
Now, I share the business community’s concern over the rise and rise of activism. But it’s not our biggest threat; and shouting-back louder with juvenile name-calling like our Prime Minister is prone to do, will not fix the problem. It needs a far more considered and sophisticated response than that.
Of course, Scott Morrison loves a strawman and loves to hop into other government jurisdictions when it’s politically convenient for him to do so.
When, horrifically, people were planting needles in strawberries – and despite the fact that state jurisdictions were already responding with increased penalties and posting rewards for information leading to arrests – Scott Morrison moved quickly to insert new definitions into the Commonwealth Criminal Code and to increase penalties for like offences from 10 years to 15 years. Predictably, the new law has never been used.
When so-called “vegan protestors” where trespassing on farms – and despite the fact that state governments were already acting to increase penalties for trespass – Scott Morrison jumped in with an amendment to telecommunications laws to make it unlawful under Commonwealth law, to use a carriage service to organise a trespass. Again, and unsurprisingly, it’s a law which has never been invoked. Both of these Federal Government interventions came almost overnight.
Interestingly, despite a significant degree of posturing, we’ve seen no action from our Prime Minister on issues like the reluctance of state governments to get more gas out of the ground, the activism of the NSW Government’s Independent Planning Commission, or indeed, the activities of anti-coal protestors.
On this last point, our Prime Minister created the largest straw man of all last week by conjuring up the spectre of businesses everywhere boycotting other businesses engaged in fossil fuels industries. He indicated his Government won’t be rushing in to respond – thank goodness for that – but rather, he and Attorney General Christian Porter he said; “will do the homework”.
The use of Secondary Boycott laws to stop corporations from making decisions they see as being important to their social licence, or decisions made in response to the views of their shareholders, sounds nuts. And it probably is.
But his comments were clearly directed at business-to-business transactions, not coal protestors. For some reason, the Prime Minister has one view about farm protests, but despite his bravado last week, is less concerned about coal protests.
But the key point is this; we live in a rapidly changing and increasingly sophisticated world in which social media platforms are giving a louder voice to each and every individual.
Sophisticated challenges require sophisticated responses. Selective legislative fiat won’t cut it. We should have learned that by now, the Prime Minister should have learned that by now.
But Scott Morrison’s speech last week should not have been surprising. Each time he faces a crowd or a camera his main objective is to sound as much as he can like Donald Trump. He even, whenever the opportunity arises – dons the baseball cap.
When President Trump doesn’t want to respond to inconvenient questions, he says they are based on “fake news”.
When our Prime Minister doesn’t like a question he dismisses it as an “in the Canberra Bubble” question.
Trump seeks to cultivate patriotic fervour with the phrase; “let’s make America great again”.
Scott Morrison’s equivalent is; “how good is Australia”.
But to paraphrase the late United States Senator Lloyd Bentsen in his 1988 Presidential debate with Republican Candidate Dan Quayle, “Scott, you’re no Donald Trump”.
Like him or not – love or hate his policies – Donald Trump is a change-agent. He’s constantly challenging the orthodoxy and the political settlement. And during the 2016 election campaign that’s exactly what he promised to do.
During the 2019 election campaign here Scott Morrison by contrast, promised to change nothing. It’s one promise he has kept.
I believe it’s Scott Morrison’s view that a Government which does nothing doesn’t make mistakes. But in a world most marked by disruption, it’s a strategy not without political risk for him.
But it’s poses significant economic risk for all of us.
Our Country can’t afford to mark-time while the rest of the world moves adapts to change. Disruption is all around us; change driven by technological advances and innovation. Change driven by the emergence of new and powerful economies. And change driven by evolving community attitudes and preferences.
How well governments respond to change will be a key measure of their success.
Hawke and Keating responded to the sclerotic economy they inherited by opening-up our economy, by integrating us into the global economy, by removing outdated policies and practices, and reforming an unfair, distorting and inefficient taxation system.
John Howard boldly extended taxation to the services sector as the patterns of consumption changed and moved more towards services.
When Kevin Rudd had the barrel of the GFC gun poked in his face, he went early, he went hard, and he went families. It stands in stark contrast to Scott Morrison’s response to the current drought which could well become our next economic emergency.
I ask you to ask yourselves; what has been Scott Morrison’s big economic reform project? Remember, he was first appointed Treasurer in September of 2015, more than four years ago.
He’s threatened business with plenty of big sticks and Labor with plenty of big political wedges, but at a time when almost all of our economic indicators are sounding a siren call, we have no economic plan beyond the promise of a Budget surplus: Scott Morrison’s Holy Grail. However, he has no plan to lift economic growth, productivity, or household purchasing power.
No one is saying reform is easy, indeed it has never been harder, not here, and in no Western democracy.
But it’s all been largely self-inflicted both here and elsewhere. Instead of building trust at a time the electorate is being bombarded with often conflicting information – both real and fake – political leaders have been responding not with leadership, but with populism.
Confucius is said to have observed; the ability to rule rests on the foundations of weapons, food and trust. In Australia today, he would have added water.
When you assess all the challenges of our current political landscape one issue stands out above all others; a trust deficit.
- Trust in our politicians;
- Trust in our political institutions;
- Trust in our global institutions; and even,
- Trust in our science and our scientists.
No sector in our economy would benefit more from a re-building of trust in our polity and our institutions than the resources sector. Because no sector is more exposed to global markets, populist policy positions which create sovereign risk, and rising community concern about the state of our natural environment.
Prolonged political disagreement over issues like climate change, gas extraction and the trajectory of global demand for steaming and coking coal have fuelled misinformation and undermined trust.
When senior government ministers challenge the science of climate change, they do us all harm. When the Prime Minister says he will meet his Paris commitment “in a canter” when we all know that not to be true, he undermines trust.
When our Prime Minister – lacking anything else to say – attacks the global institutions and the rules-based frameworks we’ve relied upon to build our substantial wealth, he undermines community trust in them to our collective detriment. If our Prime Minister doesn’t trust the WTO, why should we expect the punters to?
When progressive activists overstate the environmental impacts of extractive industries – contrary to the science our regulatory authorities rely upon – trust is further undermined.
Just yesterday, a Coalition backbencher chairing a House of Representatives Committee hearing accused a CSIRO scientist of being “too activist”. What?
Never before has our Country been so in need of some strong leadership. Anthony Albanese showed some last week with a values speech which set-out his priorities, talked about job creation, and tried to re-shape the climate debate by directing the conversation through the prism of opportunity as well as challenge.
He showed leadership too, when he reached out to Scott Morrison with a bi-partisan hand in the hope of doing something meaningful for our drought-ravaged farmers and dry rural communities.
I recently reached out to Scott Morrison too – as Labor had done before – seeking an end to the climate and energy wars, a settlement which would drive investment and jobs, and take the heat out of energy prices.
Of course, to rebuild trust our politicians must dial-back the rhetoric and allow us all to put faith in, and express confidence in the science, expert advice and non-partisan bureaucrats. These are also the things our mining and oil and gas sectors need, to build investor confidence and to create jobs.
Let me leave you with another thought from Confucius: “a superior man is modest in his speech, but succeeds in his actions”.
I hope our Prime Minister is listening.
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