The head of the Business Council of Australia, Catherine Livingstone, has called for politicians to restore confidence in government process and chastised leaders for claiming election mandates for “disruptive policy reversals”.
In a wide-ranging speech which called for a 10-year policy plan, Livingstone said the electorate’s loss of confidence in the “governance model” needed to be addressed before any major policies areas could be discussed.
“This loss of reputation and trust in our governance model has profound implications for our democracy,” Livingstone told the National Press Club on Wednesday.
“We are already experiencing the first order effects: one-term governments, minority governments, poll-to-poll decision making and disruptive policy reversals, with newly elected governments claiming as ostensible mandates what is actually an expression of underlying cynicism and frustration.”
On coming to power in 2013, Tony Abbott claimed a mandate to remove the carbon tax and emissions trading scheme.
She said governments of the day needed to give evidence of “respect for process, particularly the cabinet process” as well as community consultations for policy changes.
Livingstone, who is the chairwoman of Telstra and has chaired the CSIRO, also urged non-government members to engage in constructive debates.
“No one has given the opposition, minor parties and independents the mandate to obstruct,” she said.
Two weeks before the Coalition’s second budget, Livingstone said discussions around expenditure and the intergenerational report did not address the context for the changing economy, “the extraordinary disruption that is now upon us”.
She said such disruption was evident because previous assumptions no longer held, for example debates around secular stagnation, countries issuing bonds at negative interest rates and weak investment in spite of very low interest rates.
Livingstone posited that at the heart of disruption of economies was “mass connectivity” which was fragmenting supply chains and disrupting business models.
She used examples of new businesses like Uber, Airtasker and AirBnB, which have allowed people to earn money in different ways but have also removed income security and long-term spending commitments. In the US, 40% of the workforce or 53 million people freelance through such business models, she said.
“While we are debating the minimum wage and penalty rates, jobs are moving to Airtasker or being replaced by machines,” she said.
Other examples of the changing global environment included growing momentum in the “sharing economy” and advances in artificial intelligence which allows machines to learn.
As a result of these changes, Livingstone said Australia could not necessarily rely on old tenets of improving productivity and participation as well as increasing population to drive economic growth.
For example, Australia’s population has grown fastest among Organisation for Economic Cooperation and Development economies (at 25% since 2000). But in contrast to past business leaders, Livingstone said increasing the population could be a “drag” on growth unless the government addressed infrastructure planning, design and liveability issues, housing affordability and environment preservation.
“If these aspects are not integral to a discussion of population policy, an increasing population may result in a net cost and hence drag on growth,” she said.
“[Productivity, participation and population] are an example of how our lack of nuance, lack of sophistication, lack of granularity and lack of context in policy design are letting us down. Nothing short of a philosophical and mindset shift is required.”
She outlined the policy challenges in health, education and ageing and urged governments, oppositions and all sectors of the community to agree on a philosophical approach to avoid “damaging and costly policy reversals”. Livingstone called on politicians to include the whole community in the debate.
“Instead of dealing in hollow assertions of certainty, this leadership must admit to doubt while providing hope,” she said. “Don’t try and second-guess what the reactions going to be.”
