The decision by the federal government to imprison executives who engage in collusion and price-fixing is the latest in a long line of attacks on business. And what is alarming is that this recent assault isn't from trade unions or the Labor Party it is by a federal coalition government.
Certainly collusion and price-fixing should be punished, for it is anti-competitive and imposes costs on other businesses and consumers. The appropriate way to deal with such behaviour is by applying financial penalties and prohibiting the culprits from working in the industry.
A maximum jail term of five years is not appropriate because incarceration should be the last resort, used only in extreme circumstances.
Absent from the little debate that there has been so far about the proposal is a justification as to why this new sanction is needed. Also missing is an explanation as to why the creation of some cartels should lead to jail, while other cartels are positively encouraged.
The prohibition on, for example, supermarkets selling pharmaceuticals produces cartel-like results that to many people are not very different from the outcomes of Amcor's alleged deeds in the cardboard-box market.
The supposed conduct of one enterprise does not justify as drastic a remedy as jail. There are more than 1.3 million businesses in Australia and it can be assumed that 99 per cent of those businesses don't engage in cartel activities, yet every one of them could be affected by these proposals.
Suggesting that small business could be exempted from some of the anti-cartel provisions is little consolation. A bad law is a bad law, and applying a bad law to some people and not others doesn't make the law any less bad, it only makes a bad law worse.
The proposed exclusion for small business from the provisions of the unfair dismissal legislation is another instance of how it has become commonplace to ignore the rule of law and the idea that laws should apply to all equally.
By ignoring the flawed principle behind the unfair dismissal legislation and simply opting to exempt small business, the coalition has shirked its obligations to both big business and to all of those who are now jobless who could be employed by a big business if the legislation were repealed entirely.
This is a conservative federal government led by a conservative prime minister. A conservative solution to the problem of cartels would have been first to test the limits of the existing law, and then if necessary introduce as minimal change as possible. Instead, we've got a radical solution with unknown consequences.
While the coalition has made a virtue out of its cautious approach to matters where radical reform is needed such as personal income tax, in this area it has shown no such restraint.
The government is again demonstrating its tendency to regulate first and ask questions second. Don Mercer, the chairman of Orica, recently perfectly summed up this approach applied to financial services when he said rules were being introduced because regulators "felt they needed to be seen to be doing something".
Leaving aside the merits of the policy, there is the broader issue of the message being sent by an announcement that cartel operators will be sent to prison.
By claiming that such a drastic policy is necessary to control companies and implying that executives will respond only to the threat of jail, the government is reinforcing the popular opinion that everyone engaged in commerce is a potential corporate crook.
The efforts of state ALP governments to introduce corporate manslaughter have had a similar effect. The high-profile collapses of the 1980s and recent scandals such as HIH and James Hardie have fostered a distrust of business, especially "big business", but it is the task of the coalition, as the side of politics supposedly committed to free enterprise, to defend the role of the corporation.
The business community itself has done almost nothing to protect itself. Individual firms have embraced corporate social responsibility to maintain their own brand name, but they have lost the will to resist the anti-corporate tirades of their opponents.
The first instance of cartel behaviour in this country is recorded to have happened in Sydney in the 1790s. Officers of the NSW Corps entered into "combination bonds" and they agreed not "to underbuy nor undersell the one from the other" when trading alcohol, food, and clothing.
At the moment, big business in Australia is held in about the same regard as the Rum Corps. To change that perception, big business must start convincing the community that its role is a valuable one and there's no better place to start than with the present federal government.
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