21 May 2024
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Business strikes back at Albanese government

Peter Switzer
8 April 2024

Ahead of a major speech by Treasurer Jim Chalmers on business merger reforms and before next month’s Budget, at a time when calls to break up the market dominance of the likes of Woolworths and Coles, business leaders are hitting out at the Albanese Government with what they call its anti-business policies.

Interestingly, The Australian reports that the PM told a small business conference last week that his Government was “pro-business.” This was at odds with the Business Council of Australia’s view that policy plays over the past two years were anti-business and potential job killers.

The Australian has been given the inside information that the Treasurer’s speech and the recommendations from former Labor minister Craig Emerson on a food and grocery code of conduct, “does not support a forced divestiture power to address market power issues in the supermarket industry”.

It’s expected that there’ll be rules for:

  1. Supermarkets with annual revenues exceeding $5 billion, which will affect Coles, Woolworths, Aldi and Metcash.
  2. Penalties of up to $10 million, 10% of a company’s annual turnover or three-times the benefit it gained from breaching rules.
  3. New merger rules, which the Government believes big business will welcome.

These forced changes on business come as the Business Council says the Government has rammed through policy changes that have hit the likes of BHP, Rio Tinto, Qantas, Woolworths, Coles, Woodside and Santos. Changes to industrial relations, wages, energy pricing and competition have all hit the bottom lines of big business and they’re threatening profits and ultimately jobs.

The BCA chief executive Bran Black told The Australian that corporate Australia “has ­become the national punching bag … we are dangerously close to making it taboo to run a business well and turn a profit. Large businesses employ more than four million Australians – almost one-in-three workers. Those jobs matter. When you squeeze an employer, it is harder for them to operate, and at the end of the day jobs aren’t as safe,” Mr Black says.

He also pointed out that the private sector employs 80% of workers and pays $153 billion in company tax and that shouldn’t be forgotten.

What will be interesting out of Dr Emerson’s food and grocery review will be how exploitative our supermarkets are when they say they only make less than 3 cents in the dollar on what they sell at the checkout.

Meanwhile, the new rules on mergers are expected to not spook business and they come as the ACCC reported that an estimated 1,000-1,500 mergers happen annually but only 330 were reported to the regulator under the existing voluntary merger regime. And what is surprising is that around half of mergers are made by the largest 1% of businesses, who you would’ve expected to be more committed to following the merger disclosure rules.

The tone of these reforms announced this week will be critical to how business treats the Albanese Government ahead of next year’s election. Taking on big businesses that are often accused of price gouging at a time when the cost of living is the number one political issue, makes political sense. However, if big business starts cutting jobs as a consequence of these reforms, then the PM could have a new political problem for next year’s poll, that of too many Australians/voters on the dole queue.

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