How to make the economy breathe again


This post is extracted from the newsletter of the Australian Sensible Centre

Our aim is to strengthen the Australian economy by dispersing ownership and economic power as broadly as possible, building the capacity of consumers and family and small businesses, eliminating corporate welfare in all its forms, and overhauling the many legislative and institutional arrangements that prevent market competition from benefiting ordinary people.

Our approach to economic policy rejects both the anti-competitive culture of big business and the anti-enterprise culture of many trade unions. We support measures to build greater ownership of capital by a greater proportion of Australian citizens. We seek a bigger sector of self-employment, micro-, family and small businesses, and a bigger mutual and social enterprise sector.

The Big Four Banks embody all that is wrong with the Australian economy. We have the most concentrated ownership of banking and financial institutions in the western world. The Big Four have a de facto government-guarantee against failure, while operating effectively as a cartel, circumventing competition laws and (through their economic dominance) imposing a non-entrepreneurial culture on Australia’s corporate and institutional investors.

They shun lending to small businesses and the self-employed, preferring equity and debt in the risk-free property sector and mergers and acquisitions which boost returns without having to be innovators or risk-takers. They do all this while gouging consumers and ratcheting up executive salaries to obscene levels.

Our energy sector is dysfunctional, producing higher prices, uncertain supply and perennial policy uncertainty. The Big Three companies (AGL, Origin and Energy Australia) have been permitted to operate both generation and retailing: these functions should be separated. Market share caps should be imposed on the Big Three to encourage new entrants, and subsidies for both fossil-fuels and renewables should be removed to allow consumers to drive the market.

Australia’s retail sector is dominated by two companies (Coles and Woolworths) who have 70 per cent of market share. By contrast, the two biggest retailers in the USA command 20 per cent of market share. Australia’s extreme levels of concentration have an adverse impact on both consumers and suppliers, particularly in farming and rural communities. Both Left and Right are philosophically blind to these adverse consequences of concentrations of ownership.

We seek a more inclusive and competitive economy, with favourable taxation and other incentives for firms with employee ownership and shared governance arrangements, and for businesses which include people with disabilities, mental illnesses and other disadvantages.

We invite your comments on this policy agenda:

Starting Points

A nation of owners (we seek the widest possible distribution of economic ownership amongst individuals, families and communities)
break up of cartels (we require a forced divestiture of assets by firms with more than 40 per cent of national market share, and firms which misuse market power)
Empowerment of consumers (we stand for a greater capacity for consumers, fewer restrictions on competition, and removal of restrictions on new entrants in all sectors)
Inclusion of people with disadvantages and disabilities in the mainstream economy (we support comprehensive incentives for firms to include the disadvantaged in employment and ownership)
An end to corporate welfare (we will abolish corporate hand-outs, subsidies, rebates, tax concessions, restrictive licencing and tariffs as measures that favour the powerful and exploit the weak)

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Radix is the radical centre think tank. We welcome all contributions which promote system change, challenge established notions and re-imagine our societies. The views expressed here are those of the individual contributor and not necessarily shared by Radix.

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