Victorian government

Victorian Parliament: 18 days to clarity or nine to calamity

The Victorian Parliament has 18 more sitting days before it is prorogued to end one of its most dysfunctional periods of government.

The Victorian Parliament’s last sitting day of October 16 will then see the government move into the mandatory six weeks purdah period before the designated election on November 29.

Three sitting weeks in June and August, or nine days, will be without the disruptive suspended independent member Geoff Shaw who has been principally the instigator of this dysfunctional period.

He holds the balance of power and is set to return on September 2 when parliament resumes for two weeks in September and the final week of sitting starting on October 14.

It will be during this period that the parliament will either be able to deal with many of the infrastructure bills and other regulatory and legislative matters that the Coalition government wants signed off, or Victoria faces another destabilising period.

The State does not need the latter.  Politicians and their Party administrations need to ensure that they are there for the advancement of the State, not for personal headlines or egos that appeal to minorities and don’t make a significant contribution to the development of the State, or go towards achieving a vision for the State.

This is also the period in which private sector needs to put its cases to all political parties to get them either incorporated into election policies or have them addressed before the purdah period.

In the health sector, the government is looking at outsourcing many of its functions to the private sector, in the agriculture sector they are looking to expand trade into Asia as well as enhance local processing, in the mining sector they want to highlight the significance to the State to the future opportunities, including a direction on future onshore exploration, in the manufacturing sector they are looking at every opportunity to attract new industries and grow jobs.

Transport, health, education, law and order are key functionary elements that the community expect, but they are not visionary. They are necessities that governments must ensure they plan and manage well.  This is not to say that the parties could not turn education or health (medical research and best practice) into a vision for the state with a bit of thought!

However, the window for the private sector to act is narrowing. They must act now!

All parties will be running functions to meet with Leaders, Ministers, Shadow Ministers and candidates.  All are important to you in the information process, but you must ensure that your case addresses the current policies of all the parties, or seek to influence these policies.

If you are going down this path and want expertise counsel, talk with us. Experience and knowledge are the basis of our practice.

Robert Masters

Corporate reputation – good news can travel fast (if you work at it)

When it comes to corporate reputation, good news can travel fast, but we all know the news media likes a bad news story. It’s even better if bad news can raise the spectre of doom and destruction, be it physical or economic.

If the news media can keep its audience worried about an issue, chances are the audience will come back to find out more.  When an audience is hungry for a story, the media makes a buck.

The wall-to-wall coverage of actual or feared job losses at Holden, Toyota, SPC Ardmona and Qantas reflects the reality that bad news is big news.

In all of the wailing, gnashing of teeth and rending of garments, with political players staking out positions, one simple fact is forgotten: economies change.

From SMH Economic Editor Ross Gittins in his March 5 comment: “Most people have no idea how much turnover there is in the jobs market. Every month tens of thousands of people leave their jobs and a similar or bigger number take up new jobs. The economy is in a continuous state of flux.”

The economy is an active and living process. To focus on the bad news story overlooks the job gains that take place as part of normal economic renewal.

So what to do if your company has good news to announce?

The risk to corporate reputation from job losses ensures that significant resources are allocated to managing such announcements. However, companies often let good news slip out without the degree of thought and planning that is attached to the not so good news.

In the current political and economic environment, governments of all levels and persuasions are looking for good news stories, particularly if jobs are attached. What may seem relatively unremarkable in corporate terms could hold significant positive news implications.

Allowing for the engagement of appropriate resources to maximise the good news value of any major initiative or expansion should be on the agenda of all corporate communicators.

With bad news, the best that can be done is to minimise the damage. With good news, the worst that can be done is to ignore it.

Working hard on your next good news announcement will ensure your name appears in the news for the right reasons and buys the public good will that can come in handy when things may not be so bright.



Lobbying – knowing what case to put to whom

Recently RMKA assisted one of our clients in lobbying policy makers to rectify a commercially detrimental departmental ruling that destroyed a business case for niche high-value local manufacture.

The client had taken the appropriate legal measures to challenge a departmental ruling but had been caught in a technical detail dead-end. To the point where even the legal advisors suggested that a revised policy direction should be sought.

RMKA reframed the matter in clear policy terms with all of the positive and negative implications outlined in language that had public and electoral resonance.  We then engaged with politicians who had a natural stake in a successful outcome and gained their support to take the matter to the appropriate Minister for policy direction.

The result was that the relevant government department was given instructions to work with the client to resolve the matter and to get the local manufacturing case back on track.

The point illustrated is that on occasions it may be more advantageous to present a policy argument to those charged with a broader public interest rather than to further pursue a narrow legal argument.  The trick is to know how to put the policy case forward and to whom to put it.

That’s why, be it a legal or policy argument to be made, the appropriate professionals should be engaged.

RMKA has over 30 years of experience in working with government and is listed on the Australian Government Register of Lobbyists and the Victorian Government Professional Lobbyists Register.


Australian Flag

Joe Hockey and the GrainCorp Prohibition

Federal Treasurer Joe Hockey has been universally flagellated for prohibiting the acquisition of GrainCorp by US-based Archer Daniels Midland (ADM) Company.

The criticism is grossly unfair. It is also politically and commercially myopic.

Australia is a huge country with substantial resources and  a small population. Sometimes we need to protect strategically placed companies and industries. We shouldn’t resile from that even if it offends the sensibilities of a bunch of doctrinaire economists or point-scoring politicians or the vested interests at the top end of town.

It’s not as though this problem is unique to Australia. If, for example, some of our largest banks were to put a consortium together to bid for the Bank of China does anybody seriously think the Chinese Government would entertain that sort of deal?

There have been precedents for the GrainCorp prohibition. In 2001, then Federal Treasurer Peter Costello stopped Shell from taking control of Woodside.

The boot was on the other foot in 2010 when the Canadian Government stopped BHP Billiton from taking control of the Potash Corporation of Saskatchewan, the world’s largest fertiliser manufacturer.

Claims that the GrainCorp prohibition sends adverse messages to potential overseas investments ring hollow when one looks back at the Shell-Woodside prohibition. Since then, there has been a tsunami of foreign capital into Australia. A prominent participant in that wave of foreign investment has been Shell itself.

The truth is, foreign investors owe us nothing. Our interests are not necessarily aligned. They work to different agendas and very different timeframes.

As an example of the timeframe issue, it is not uncommon for foreign oil companies to find a commercially viable natural gas field in Australian waters and then decide not to bother developing it for many years because it suits their global scheduling program.

This is clearly contrary to Australia’s interests: we would want the gas field developed and commercialised as quickly as possible. Our only defence against this conflict is to put a time limit on the tenure of the leases; so use it or lose it.

As for different agendas, quite some years ago, the Australian subsidiary of a substantial British-based chemicals group split from its UK parent. One of the key reasons was said to be conflicting agendas. The Australian subsidiary apparently wanted to expand into Asia but it was over-ruled by the British parent which had decided to tackle Asia in a different way.

Dealing specifically with GrainCorp, there is a widely held view that GrainCorp needs access to substantial funds to carry out expansion and development programs. This is an entirely separate issue from the acquisition itself. There are many alternative ways for GrainCorp to gain access to broader funding. That can be fixed within Australia with no help from ADM.

In addition, ADM has a range of other options available to it for involving itself in the Australian grain industry. For example, it could joint venture with GrainCorp (and other companies) on a range of business opportunities.

There is no doubt that, to reach its full potential, the Australian agribusiness sector needs massive investment and a lot of that funding will have to come from overseas. But allowing foreign interests to take over strategically placed Australian companies and assets may not be the only nor the best way to address the problem.

Waving the ADM acquisition through would have given the US group access to perhaps the most vertically integrated agribusiness in Australia. It would have controlled most of Australia’s grain storage and handling facilities and all but two of the bulk port terminals in the eastern states.

It would also have obtained substantial interests in Australian flourmilling, oilseed processing and refining, and malt production.

And what of ADM itself? If a foreign company wants to take over a strategically positioned Australian company, then its own credentials and track record should be closely scrutinised.

In fact, ADM has had what one observer described as a “troubled history of price-fixing”. If there is substance to this claim, that could have represented a major risk for the Australian grain industry – not today, but several years down the track after any acquisition.

Companies that are in a position to dominate markets eventually succumb to the temptation to raise process and extract monopoly rents.

And when that happens, what do we do?

Joe Hockey may well have been right. Foreign investors might not like knockbacks like Woodside and GrainCorp, but as long as they know the rules they will keep investing in Australia.