Almost immediately, the conversation about business started to change. Having extracted great political mileage out of bashing the banks for years – including introducing a special bank levy as Treasurer – Morrison led the praise for the sector’s forbearance.
And having repeatedly looked for ways to introduce more competition for the big banks, Morrison and Frydenberg praised the big four’s enormous balance sheets and impregnable capital positions. Bigger was suddenly better once again. The banks’ forbearance will hit earnings, likely for years. But the decision by the major banks – and so many companies across the economy – to deliberately put the community ahead of profits has helped to highlight the varied roles business plays.
Such as the role of essential service provider. The toilet paper panic was farcical, but it also put the frequently criticised grocery duopoly in a different light. For many, the supermarket became the heart of the local community in a way it hasn’t been in decades.
Another role that became clearer was that of business as a customer and supplier to other businesses. The decision by many, perhaps most prominently BHP, Rio Tinto and Fortescue Metals Group, to pay small suppliers as quickly as possible and keep cash flowing through the economy was a reminder that even giant multinationals support local businesses.
The iron ore miners, and their counterparts in the gold sector, also reminded the nation of the role of business as taxpayer – with prices at multi-year highs, they are pouring money into government coffers. BHP chief Mike Henry didn’t make our list of the 10 most powerful figures, in large part because he’s only been in the role since January. Rio Tinto’s destruction of the Juukan Gorge caves blew its former CEO Jean-Sebastien Jacques into the far outer orbit of contenders. Fortescue Metals Group takes two slots, however, in Andrew Forrest and CEO Elizabeth Gaines.
As the pandemic pushed workers into home offices and around kitchen tables, employers and employees were forced to reassess their relationship. In a recession, a job is more than a job – it’s how households stay afloat. While hard-hit sectors such as travel, tourism and oil and gas had little choice but to cut staff, most companies have tried to hang on to their workers, doing their bit to help build the fabled bridge from one side of the crisis to the other.
With so many unknowns – the availability of a vaccine, how long and deep the recession will be, when borders will reopen – it’s difficult to predict how the business community’s approach to the pandemic might change.
Will the Team Australia approach taken so far – protect jobs, support customers and focus less on short-term profitability – remain in place? Hard-nosed decisions will be required as the recession deepens.
With a two-year recovery likely, a middle ground will need to be found.
So how will corporate Australia use the power and influence that has been restored to it? The crisis was only weeks old when the business lobby started making calls for the government to emerge from the pandemic with significant economic reforms to kick-start the recovery.
Leaders such as Wesfarmers’ Scott and Fortescue Metals’ Gaines have been vocal about the need for changes in areas such as industrial relations, tax, red tape and investment incentives.
“Unless we do something, unless there is some catalyst, some broader stimulus that is focused on creating jobs, stimulating investment, then I think we need to be concerned,” Scott said in June.
But provided corporate Australia focuses its efforts in the right areas – jobs and investment for example, and not protecting directors from class actions as lobby groups seem keen to do – then it will have the chance to spend its replenished political capital.
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