Commonwealth Bank chief executive Ralph Norris said last week Australia looked like it did not have ''a particularly business-friendly environment''. He's right. And business has only itself to blame.
Most of this country's corporate leaders have been complicit in the expansion and politicisation of government control over business.
When it comes to dealing with government, most company bosses prefer co-operation to opposition. Executives pay lip service to the ideas of free markets but they will embrace greater government control of their business if it gives them a commercial advantage, or if they perceive it will increase their personal social prestige. Most bosses of large public companies in Australia don't peer beyond the doors of their own boardroom. When they do venture outside, it's often to talk about how government regulation should apply to every other industry except their own.
The story of business support for climate change is a nice example of the double standard that applies when it comes to regulation.
The banks enthusiastically supported Kevin Rudd's carbon pollution reduction scheme. They were quite willing to have manufacturing and resources subjected to the 374 pages of legislation of the emissions trading scheme. An ETS would have heralded unprecedented bureaucratic regulation of the activities of manufacturing and resources companies, and would have sent some companies broke.
One of Rudd's justifications for an ETS was that the community ''demanded action'' on climate change.
Today the banks face regulation of their own. The community demands regulation to control huge bank profits and excessive executive salaries. It's just like the sort of action the community was demanding on climate change.
The kind of financial regulation being talked about in Canberra would herald unprecedented bureaucratic regulation of the activities of banks -- just like the sort of regulation manufacturing and resource companies would have met under an ETS. Now the banks have to explain why they think government should do what the community wants on climate change, but not on banking regulation. Following public opinion can set dangerous precedents.
Banking was one of the first sectors to embrace the idea of corporate social responsibility. Corporate social responsibility recognises and elevates the rights of stakeholders; that is, those who don't own the company but who are in some way affected by its operations.
Taken to its logical conclusion, the application of corporate social responsibility involves companies adhering not only to legislation as passed by the Parliament, but also abiding by the opinion of the community. Which is not very different to the suggestion of shadow treasurer Joe Hockey that there be a social compact between the government, the community, and the banks. Treasurer Wayne Swan has labelled the notion as dangerous, but it is simply an extension of what the banks are already doing.
Part of the motivation for business adopting corporate social responsibility was to fend off more regulation. It was a good idea in theory, but it hasn't turned out that way.
The bank bashing both sides of politics have engaged in is bad. But when you look at what's actually happened, it's not much. There have been a new nasty headlines, the banks have suffered some ''political jawboning'' (Norris), and they face the prospect of yet another parliamentary inquiry. That's nothing compared with what's happened to Telstra, which was told it would be cut in half unless it complied with the whim of the Labor Government and co-operated on the broadband network. The business community stayed mute and Telstra succumbed. Telstra is big and unpopular. No one wanted to be seen to be defending it, and no one wanted to upset the government. No one is defending the banks, either.
Ralph Norris is correct. Political attacks on the banks, on top of the resource super profits tax debacle, have harmed Australia in the eyes of international investors. A potential international investor would be confounded by politicians assaulting banking and mining -- two sectors that were key to the country's economic resilience during the global financial crisis. And bank profits as measured by return on equity aren't extraordinary.
But in the end, much of the time, politicians do as much, or as little, as they can get away with. In recent years Australia's business leaders have allowed politicians to get away with far too much. Business must take its share of responsibility for what's happened.
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