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Disruption The new normal

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How to stay on top of politics that can impact your business

In a global political environment that is veering towards the highly unpredictable, government relations and keeping track of the political players with the potential to impact your business has never been more important, or challenging.

2015 and 2016 will be remembered as years of seismic change and upheaval to the comfortable traditional political orthodoxy of the Western world. Brexit, Trump, the rise of the right in Europe, failed plebiscites or referenda in Greece, Italy and Colombia, a belligerent populist in the Philippines, the list goes on.

Here at home, a first-term Coalition Government that was expected to romp home in a double dissolution election was lucky to survive. At a State level, we are becoming accustomed to one-term governments.

Much has been, and will continue to be, written about the root causes of this disruption to the previously somewhat predictable course of politics. However, for businesses with exposure to State or Federal Government policies and regulatory actions, the key challenge is to stay both on top of and in touch with the key players on all sides of politics and what drives them.

In such volatile times, it is insufficient to be cosy with one side or another in a dominantly two party system. Equal attention needs to be paid to both major parties, and now to the minor players who are increasingly carrying critical influence. Further, if the right levers are to be used when policy or regulatory proposals present a business threat, there needs to be an understanding of the competing agenda within the parties.

For many businesses, political observation and developing relationships within the political sphere are not core functions. Given the almost frantic modern pace of political change, even some political commentators struggle to remain fully abreast of the sometimes labyrinthine allegiances, dependencies and deal-making; that is where expert advice is becoming valuable.

In the effort to garner fickle electorate support, politicians will sometimes consider actions and reactions with unintended consequences, or scant consideration of commercial impact. Careful and considered engagement may then be required to avoid outcomes that can damage particular businesses or sectors. Simple opposition to a proposal is most often not enough. Clear and well-thought through proposals need to be put forward, cognisant of the political agenda at play and of the need to find workable solutions.

RMK+Associates have spent decades developing a detailed understanding of how our system of government works and building the networks necessary to facilitate political engagement. For businesses with a need to engage with government, or even to simply understand the political drivers and administrative processes, seeking such expert counsel could help avoid significant difficulties emanating from unforeseen political action.

 

When 10% failure is way too much

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The recent Parliamentary Committee Hearings into the big four banks may have been considered a ‘damp squib’ by those calling for even greater public accountability but it did force some interesting admissions from the bank bosses.

There was a standard and expected amount of mea culpa and contrition in evidence but one form of words could come back to haunt Ian Narev, the CBA boss. Here’s a transcript of an exchange on the quality of financial advice provided to customers:

Narev is asked by Coleman (Committee Chair Liberal MP David Coleman) about the financial advice scandals.

He acknowledges the bank failed to act with “requisite speed” to protect customers, although only about 10 per cent of the 8000 people whose files were reviewed were found to have been given faulty advice.

Whilst Mr. Narev was being as honest as he could it is hardly reassuring to hear that if you seek advice from the ‘experts’ at CBA there is a 10%, or possibly even higher, chance that you will be put wrong and suffer a financial loss. They don’t advertise for business by saying ‘we get it right, most of the time’.

Again, words really do matter and even with the most thorough preparation (which we are sure CBA undertook) they can come across quite differently to the audience from the intent of the speaker.

Spare the politics………puh-lease.

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Phew, well I’m glad that’s over.

9-weeks of excruciatingly numbing political meandering that delivered………… well, not much.

One of the aspects of the campaign that we have been discussing internally has been if we learnt anything. The answer is a general ‘Yes,’ however the content you could treat on a take it or leave it basis.

Polls

Dare I say it, they were one of the highlights of the Aussie campaign.

Despite the general twitterings of the media, the polls were pretty much on a consistent ‘knife-edge’ across the campaign; the end result? A cliff-hanger.

Based on the musings of our esteemed daily papers one could have been excused for thinking that our pollsters were as reliable as their British counterparts (or the BoM forecasting Melbourne weather) with their ‘forget the numbers, Turnbull’s got it’ commentary.

Messages

It helps to have them.

Attempting to bore your target audience in to submission clearly doesn’t work.

Hopefully the last couple of months’ acts as the lethal injection that obsolete sloganeering without substance needs.

It could have been worse I guess: Cheap Cheap anyone?

The Greens

Surprising? Not really.

Well performed? Not really.

Going places? Most likely.

I would have thought that in the absence of discussion void of any real substance regarding a pragmatic (forget about visionary) forward-looking agenda for the nation, that there was a huge opportunity for The Greens to appeal to the abiding Australian sense of egalitarianism.

This ‘third force’ in Australian politics also appears to have been sucked in to a narrow (and narrowcast) script, despite the ample areas of opportunity (climate change, asylum seekers, homelessness, re-balancing Commonwealth infrastructure spending to include more public transport, the cost of living etc etc) for the further ‘Left’ of pour political landscape to carve out more ground.

The Greens campaign I would describe as overlooking the bigger picture; bicycle super highways have cool renders tho.

Our preferential voting system

Is it time to give it the boot?

As it stands all seats in the House of Reps come down to a two-horse race. Why is it that the jockey of every beaten horse then gets a say in the eventual winner, even though their mount dropped out before the home straight?

The ‘One Vote, One Value’ principle seems to be undermined when a vote for one set of values (or whatever substitutes for them these days) ends up in a camp with a different set of principles.

Preferences don’t even seem to make much difference. As a case in point, the ALP received its second lowest primary vote in history and was a kick of the footy from winning this election.

Which leads me to the……

AEC

I read earlier this week that India can count 800 million votes in a day.

Brexit was confirmed in 7-hours.

In Australia our measly 10 million votes are only approximately 70%. Sure we have the complexity of preferences and the use of the postal system etc, but surely we can speed things up a bit.

A move to first past the post voting, or maybe even using that futuristic thing called the internet could help?

Scare Campaigns

Work.

If, the target of said campaign permits them to.

With a week or more to go before the poll, a robust disaggregation of what was being considered for Medicare (and why), contrasted against the scaremongering may have enabled our soon to be re-sworn in PM to make a statesmanlike speech on election night.

Split the ‘Right’

Given the ‘conservative discontent’ within the broad church of the Liberal Party, will it be an ALP strategy over the course of this, and subsequent terms of government, to try and foment this unhappiness with the view to seeing ‘Team Cory Bernardi’ become to the Libs what The Greens are to them?

Perhaps, but unless we did away with preferential voting such an achievement wouldn’t make any tangible difference (based on where I presume preferences would flow).

What did we learn?

If you want to bring people with you, one needs to understand who they are, what’s relevant to them, and speak to them in their language. Ideally, this process won’t take any longer than necessary.

If you have an opportunity, take it. Never expect that it will exist forever.

Keep things simple, clear and efficient. No one has time, nor are interested in reasons/excuses why the apparently simple is actually not simple. In short, understand and meet expectations.

If, and when something incorrect is said; correct the record. Keep correcting the record until the record is correct. If you don’t do the work you don’t have anyone to blame but yourself.

Strategy. A lot of strategies look great on paper and over sound great over a cup of coffee, but said strategy is going to deliver the same result as would have been the case prior to developing, investing in, and implementing it why bother? Better to spend the time identifying what you want to achieve and develop a plan that will actually deliver difference rather than same same.

So………

As things stand today, let’s hope that Sir Peter Cosgrove extends his French sojourn a little longer to allow the dust to settle, and for us innocent Australians to focus on the important stuff in life like football, kids going back to school, and paying bills. You know, the things that need to be considered by every Australian, every day (and yes, that includes football).

 

 

Nature Abhors a Vacuum

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Vacuums are good for many things – including boiling water at zero degrees. What they are terrible for is selling a message.

Prime Minister Turnbull came to the leadership of the nation in September last year, loosing the hounds of national expectation. Understandably he did nothing to dampen those expectations that had fairly, or otherwise, been hitched to his wagon.

Six months is a long-time in most things; even longer in politics.

The national commentary now associated with his leadership will no doubt provide sobering reading for him and his advisors.

Upon considered reflection, it is the opinion of this business that our PM is guilty of failing to manage the conversation, which in turn has resulted a massive decline in his personal standing and a 50:50 split in the most recent newspoll.

So what happened?

The only conclusion that can be drawn is that the government instigated a conversation that it was not yet ready for. It kicked it off following the tried and true method of flying kites and selected leaks. All good so far; everything was on the table.

Australians could expect that complex and difficult reform would be calmly and rationally explained, and that the government would pursue the ‘right’ path as opposed to the politically expedient one.

It’s at this point in time some folks in the back office must have started to feel pretty uncomfortable. Increasing the GST was going to hurt too much (read: scare campaign on the horizon), and changes to super and negative gearing began tearing at the heart of a core constituency (read: conservative backbenchers).

Then there was silence.

Then the Opposition put out a policy.

Before the government knew it, it had lost control of a debate that it had should have had well within its grasp with plenty of good will and political capital to expend on driving it to the conclusion that the ‘nation needed.’

Simply put, the government appears to have been carried away with its potential to tackle a politically difficult problem and rushed into it without a clear pathway to explaining (and achieving) that task. En route, it ceded control of the discussion by creating a vacuum and allowing it to be filled by others with a somewhat different agenda to theirs.

Put another way, they went sailing without coordinates for the destination or the waypoints that they should have travelled by.

If we take a moment to compare and contrast here with one Donald Trump the difference is illuminating. Trump is so busy dropping bombs that none of his opponents (nor the media) have an opportunity to really lay a glove on him. He is leading a merry dance at an unprecedented tempo that does not permit anyone to get settled and really take him on. As an organisation, we do not advocate such a scatter-gun approach; it is however instructive to examine the techniques used across the political spectrum to maintain the initiative.

Ultimately the salient point is that if you are leading, you must know where you are going. There is never any reason, or excuse, to begin a journey before you are ready.

In the Australian context it is an opportunity lost for the nation. The saddest element of which is that it will likely take some kind of economic shock before tax-reform is meaningfully tackled again in the future.

To quote William Blake:

Not with a bang, but a whimper.