In her new book, Lindy Edwards takes a deep dive into seven of Australia’s most iconic political battles to reveal how corporations exert influence to ensure decisions fall in their favour, and where the opportunities might be to resist.
In 2012 the federal treasurer Wayne Swan took the startling step of publicly declaring
“the rising power of vested interests is undermining our equality and threatening our democracy”. He argued “a handful of vested interests that have pocketed a disproportionate share of the nation’s economic success now feel they have a right to shape Australia’s future to satisfy their own self-interest”.
At the time some were quick to dismiss it as the rhetorical posturing of a Labor government that had mishandled major reforms. But in recent years there has been a growing chorus of senior public servants echoing the concern.
Allan Fels, the Howard-era head of the Australian Competition and Consumer Commission (ACCC), has argued the policy process is being captured by vested interests like never before. Former head of the Treasury, Martin Parkinson, slammed business lobbyists
for arguing “take money from the citizenry at large and give it to me”. Ross Garnaut, a long-time economic adviser to governments, argued the problem has become “diabolical
There are also good reasons to believe this may be a growing problem. Economic power has become much more concentrated over the last 30 years. The ACCC reports that the ASX top 100 companies’ share of GDP has increased from 27% in 1993 to 47% in 2015.
Even amongst the top 100 companies, wealth is concentrated at the top. Wesfarmers income was almost $67 billion in 2018, while few companies outside the top 20 made it over the $10 billion threshold.
At the same time economic power has become more concentrated, the corporations have also professionalised their approach to political lobbying. Business lobbying was described as fragmented, haphazard and unprofessional in the 1980s, but it has become a recognised career and there are now an estimated 5,000 professional lobbyists in Canberra.
I set out to test the evidence and see whether it was as bad as it looks, by examining clashes between government and nine of the 10 largest companies on the Australian stock exchange over a 10-year period. I looked at clashes with the miners, the banks, Coles and Woolworths, Telstra and News Corp, as well as unfair contract laws and big business’ treatment of small business.
These policy battles appear quite disparate at first. Yet, at their heart, they each come down to the same core phenomenon. In most cases the sector is dominated by between one and four big companies that dominate supply chains made up of tens of thousands of people.
A lot of the corporations’ business strategies are focused on redistributing wealth along their supply chains and into their own hands. In each of these case studies the corporations were battling with government over laws that shape where profits sit in the supply chain.
The struggle over these types of laws is shaping up as one of the most critical battles of the modern age. The wealth of the 1% has grown disproportionately over the last 30 years due to the powerful scraping of wealth out of chains in this way.
The question is whether our democracy is strong enough to insist on a distribution of wealth along the chains that serves a greater public interest.
Discussions of corporate power can blur into conspiracy theories where faceless figures behind the scenes are calling the shots. In following how the issue unfolded, it becomes clear that it is not possible for anyone to exercise such control. The case studies reveal the complex swirl of countervailing forces, random events, and a hundred hands on every decision.
Yet some players bring so many resources and such influence that their odds of triumphing are higher no matter which turn the dance takes.
This is an edited extract from Dr Lindy Edwards’ Corporate Power in Australia: Do The 1% Rule? available now from Monash University Press. Dr Edwards is a political scientist at the University of New South Wales. She is also the author of How to Argue with an Economist: Re-opening Political Debate in Australia from Cambridge Uni Press.