The Business of Government | Australian Greens

The Business of Government

Responsible economic management is important. But at what cost if we stop providing public services to our most vulnerable citizens?

By Fergus Halliday
Tuesday, March 21, 2017

Even if we contort ourselves enough to discount the uncomfortably close ties between big corporations and certain major political parties, modern Australian politics is rife with the language of business.

Within the halls of Parliament, the mercantile are treated like Olympic athletes. They ​spend political capital like currency. T​hey ​m​ake ​deals with minor parties like an oligopoly. Even the Federal Budget can’t help but be delivered like an earnings report — a fiscal report card where a surplus sits as a shallow stand-in for profit and revenue growth.

It should come as little surprise then that, from​ ​Donald Trump​ to​ ​Malcolm Turnbull,​ the assertion is often made that the deft management skills required to run a successful business are interchangeable with those required to run a government. While this common wisdom might be an appealing idea, the reality is a little bit more messy. Good government requires a measured understanding of far more than just finance and it’s time we all got wise to that.

In fact, it only takes a cursory examination of the traditional economic definition of an entrepreneur (​someone capable of effectively managing risk, labor, capital and land in order to generate profit​) to highlight the disparity in the skills involved versus those needed for public service.

People not profits

Do we want government to be managed as a for-profit business?

If you’re running a business, you’re out to enrich yourself, any shareholders and (to varying degrees) serve the needs of your customers. In a razor-sharp contrast, governments have to try and serve the interests of both the people who voted for them and those who didn’t in equal amounts of good faith.

A business mindset is ill-equipped to produce good outcomes in such conditions. Where market failure can represent an opportunity in the private sector, it’s often a money sink in the public one. After all, a business only aims to meet the demands of opportunities that’ll provide an able return on investment. The irony here is that the investor-entrepreneur relationship could very easily and effectively be leveraged towards social change through shareholder activism. If shareholders take corporate responsibility seriously enough to exercise the powers granted to them by the 2001 Corporations Act, they could prove an unprecedented and unexpected weapon against lobbyists.

In its simplest form, the government takes taxes from those it governs and uses it to implement policies and services on their behalf. Fiscal sustainability and economic responsibility are important but irrelevant if the government doesn’t provide the real-world everyday things it’s obligated to provide like hospitals, schools, and social security.

By the public, for the public

A lot of important public services can’t or fundamentally shouldn’t be monetised.

The whole premise of a public good is that it’s paid for collectively “by the public, for the public”. Monetising on top of that muddies the waters. Effective governments make peace with that fact and work to offset it by investing in productivity and efficiency gains in areas where those gains can be made.

Underfunding health or education (usually to pave the way for privatisation) is representative of a government that treats vital long-term investments like short term accounts on a balance sheet to be cleaned up in time for the next election. In other words, a government with a business mindset. It’s also likely related to the rise of directly creating jobs as a priority for governments. While deft economic management is obviously a crucial part of modern government, direct efforts to assist in job creation beyond that shouldn’t be treated as more important than providing fundamental public services.

A government obsessed with micromanaging its unemployment rate is inevitably going to devolve a complex situation into a numbers game and lose sight of the bigger picture. If your sole focus is increasing employment, it’s only a matter of time before other necessary investments in public transport, environmental sustainability, or housing affordability seem less vital.

Valuing what matters

Let’s be cle​ar: getting the budget into the green is worth almost ​nothing if we slash at the education, health and social security systems that allow the majority of people to live long enough to experience the (minimal) economic benefits of that surplus.

The idea that any society should be judged by the way it treats its poorest citizens has never been more relevant.

We can’t allow the notion that wealth is a synonym for success to be used as a shield for the power hungry. Knowing how to balance your books or skirt lax tax laws might help someone individually prosper, but bringing that same winners and losers approach to government is only going to set us back as we try to move forward. And with climate change, mass automation and unprecedented inequality looming, it's a setback we can't afford.

Fergus Halliday is from the Blue Mountains Greens.

Image by Robert Couse-Baker, CC-BY-2.0