How business can lead fight against populism

10 March

By Luke Sayers, Chief Executive Officer, this article appeared in the Australian Financial Review - 9 March 2017

The Australian economic miracle rolls on.

In April it's likely that the anniversary of our 26th year without recession will tick over, putting us into the record books as the country with the longest economic expansion in history.

It's a record that supports the Prime Minister's mantra about there "never being a better time", and while converting this optimism into policy has been challenging, it's welcome encouragement for Australia's business sector to get on with the task of innovating to drive growth. It's a theme I'm hopeful the Prime Minister will return to at The Australian Financial Review Business Summit on Thursday.

Our economic record is all the more remarkable when you consider the economic and political turmoil of the last decade; the financial crisis, the end of the resources boom, domestic political uncertainty and the rise of anti-business and anti-globalisation forces globally.

Australia's success in navigating these challenges can be attributed in equal parts to good luck and good management and as we look ahead it's worth considering the role business can play in maintaining our record run.

Economists argue that sustained growth comes from the "three Ps" of population, productivity and participation. I would argue that there's a fourth and fifth "P" on which all this rests; politics and populism.

The political upheaval sweeping Britain, the US, Europe and nascently here in Australia is being driven by fear of immigration, globalisation, and a sense that the world is changing too quickly.

This fear has manifested as a lack of trust in institutions like government, business and the media.

According to Edelman's recent trust barometer, trust in key institutions in Australian society is at its lowest level. Despite having never had it so good at a headline economic level, individual fears about unemployment housing costs and personal debt are driving feelings of pessimism.

Against this backdrop, or perhaps in spite of it many in business are frustrated by what they see as a lack of progress in crucial areas like tax and industrial relations reform. Yet with trust at a low ebb, the ability for legislators to advocate for reform, let alone achieve it is incredibly difficult.

This frustration also ignores the role business has to play in the trust agenda, and a fundamental truth of conducting business today; that is, that business needs a mandate from society to grow.

It is nearly a year to the day since the Financial Review brought Australia's business and policy elite together to discuss risk arid growth, and what could be done to encourage businesses to take more of the former to stimulate the latter.

As the same group gathers this week to consider questions around growth, we would do well to consider the question "growth for who?”.

For growth to be sustainable it must be inclusive.

Corporate Australia faces a public mat has grown weary of tales of corporate greed and misdemeanour. For business to achieve the reforms it is seeking, it must meaningfully address these issues.

It also needs to do a better job of advocating the important role commerce plays in society, and highlighting how we all benefit from a strong and prosperous business sector.

Yet our advocacy efforts must be tailored to suit the mood of the day. The same Edelman survey that traced the decline of trust also shows that chief executives are perceived as some of the least credible spokesmen on business issues.

The most credible? Employees. The lesson is that people want an authentic message, and they want to hear it from people like them. However to assume this is a communications issue alone - a failure of message transmission - misses the point

Business needs to walk the talk.

We're not suggesting that doing the right thing should be used as a bargaining chip for getting crucial reforms across the line. But if business demonstrates that it is listening and changing, it may find a more sympathetic ear when it speaks.

A more sophisticated approach to advocacy coupled with action that matches the rhetoric will ensure corporate Australia is a constructive contributor to the campaign for reform, and the fight against populism.

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