Crony capitalism noun (derogatory): an economic system characterised by mutually beneficial relationships between politicians and business owners. Collins Dictionary.
That getting rich in Australia is mostly about working your political connections in heavily regulated industries like mining, property development and finance has been known for quite a while. Cameron Murray and Paul Frijters explained how in the excellent Game of Mates.
If anything, however, the extraordinary extent to which the Australian economy is centred on favours for the well-connected is only becoming greater, particularly under Scott Morrison.
Morrison, after all, began his prime ministership saying: “My value is: we look after our mates.” If nothing else he’s lived up to that.
This week’s energy policy announcement, centring on a commitment to build an unnecessary power plant and pipeline infrastructure to boost gas consumption, continues Morrison’s pattern of rewarding major political donors Santos and Origin Energy. Those companies are also boosters of the fossil-fuel industry’s carbon capture and storage scam, which the government is announcing handouts for today.
But Australia’s economy is littered with examples of the same forms of crony capitalism.
Media policy has always been the clearest form of crony capitalism in this country but it has become purified to an unprecedented level in the government’s extortion of Google and Facebook at the behest of News Corp, which literally dictated the legislation and the treasurer’s talking points.
Agriculture and water policy under the Coalition is almost as egregious, with massive handouts delivered to the agriculture industry (though never enough to satisfy its political representatives, the Nationals).
In its most recent review of taxpayer subsidies, the Productivity Commission (PC) reported that the government had increased handouts to farmers by more than $1 billion under the guise of drought relief, despite repeated warnings from both it and farming groups that such handouts rewarded inefficient and lazy farmers and punished those who had prepared properly for drought.
The latest win for agriculture is the announcement the government was abandoning altogether environmental water buybacks in favour of handouts to irrigators to upgrade their water infrastructure — despite years of advice from the PC that irrigation infrastructure investment was a far more expensive way to reduce water loss, and extensive evidence of water theft and rorting in the Murray-Darling Basin by irrigators.
National Party connections are also at the heart of one of the more blatant examples of crony capitalism during the pandemic: foreign-owned regional operator Rex Airlines, chaired by former Nationals transport minister John Sharp, received tens of millions in taxpayer handouts that other airlines couldn’t get.
Australian banks, big financial institutions and their customers still pay the price for another especially blatant form of crony capitalism — the long period in which the Liberal Party, in exchange for huge donations, protected the big banks and AMP from regulatory scrutiny and proper, customer-centred financial planning rules.
Unusually, this ended up blowing up in the faces of both parties, with the banks so egregiously abusing the privileges bought from the government that a political backlash resulted so violent as to force a whole new period of reregulation and industry restructuring.
The big banks have been replaced as major donors to both sides by the big four accounting firms, which enjoy hundreds of millions of dollars in government contracts, secured through a deliberate government strategy of cutting the public service and outsourcing policy work to the big four, who are even more pliable than bureaucrats.
If you’re not a mate, of course, and you don’t give generously to the Coalition, you can expect no favours. The government has used the pandemic to target the university sector and the much-hated industry super funds while sitting back and watching the arts sector expire.
Labor is gripped by its own form of crony capitalism. Key unions — which bring membership numbers and massive donations — heavily influence state and federal policy. The people of New South Wales and Queensland paid a heavy price for the role played by unions in blocking electricity privatisation in those states, leading to higher power bills and lower infrastructure investment in the name of preserving union featherbedding.
Unions are also behind the enthusiasm of state Labor governments for propping up inefficient, carbon-intensive sectors such as aluminium smelting, and costly local procurement requirements that inflate the cost of taxpayer-funded projects and services.
But under the current government, the Australian economy — always small, prone to oligopolies and special dealing enabled by an unregulated and opaque system of political influence-wielding — more than ever resembles a banana republic where the best way to make money is to befriend the ruling junta.
The really striking aspect of of this comprehensive looting of Australia and its tax-payers by the Coalition and its mates is how much is done in the open. There is no shame, no fear of retaliation. The media is mostly either tame or part of the gang. There are few if any laws that could restrict them, and if they are clumsy enough to trip over a law occasionally there is no law enforcement or investigation agency that will do anything. The AFP, for example, has shown it will never willingly inconvenience a serving minister. An opposition worth the name might have something to say, but instead we have Labor, where the role of shadow minister is usually a far too apt description and its options are few and weak anyway; Parliament is held in contempt by both government and public. It seldom even sits any more. So it’s hardly surprising the Coalition is so confident. What chance is there of anyone putting a spanner in the works any time over the next few decades?
“…. The AFP, for example, has shown it will never willingly inconvenience a serving Coalition minister….”?
Think Angus Taylor and his hatchet job on Sydney Lord Mayor Clover Moore
Or Cackles Cash, Bribie Bridget pr the entire Howard government over Iraq/AWB.
Bent Bridget another moniker…
What the left have failed to understand is that social engineering/indoctrination halts the emotional maturation process and produces infantile obedient adults incapable of challenging authority who live in a state of deep denial, and vent their frustrations on the defenseless scapegoats provided by scum sucking bottom feeders in the media. The government are acutely aware they can get away with anything, we have turned a blind eye to 2 decades of war crimes and pretend they are not happening, while a hit of ice will land you in jail?
As for the law and the psychiatric community, they are the gate keepers of the status quo, something I learnt first hand taking on corrupt police, covering up the domestic violence murder of a close friend, as they failed to investigate concerns raised as required by law.
The personal attacks, slanders, gaslighting were full on to the point I ended up framed and jailed for four months, though the evidence I possessed was incontrovertible, while the murderer walked away scot free.
What eats at me is the fact that this is a psychological battle and psychopaths’/narcissits have an achillies heel against which they have no defense due to their pathology that we never exploit
Social engineering does that? I thought rampant capitalism causes it.
Bernard equates Labor cronyism to Liberal cronyism, but this is very wrong. The two are quite different. Unions do not own stuff and their crimes do not result in the personal enrichment of already rich people as does Liberal Party cronyism.
Labor cronyism arises out of a lack of internal party democracy, and as annoying at is, it is not as damaging to the economy as the corruption and wholesale handing over of swathes of the economy to party donors and established elites.
Bernard, you do not need to attack the unions to balance your attacks on the Liberals. For example, privatisation has been a disaster in Australia, and we have higher prices, less flexibility in how industry policy can be managed, loss of revenue to government from the privatised businesses, inefficient fake markets, and whole industries like early childhood, aged care, secondary education, and health, where private industry cannot survive without huge government subsidy.
The unions were right to oppose privatisation, and the jobs feather bedding that you mention is not in the same league, and in fact, is so far out of the league of the damage caused by Liberal cronyism and corruption that it undermines the argument against political corruption and cronyism in general.
If they are both doing it, equally, then it is not so bad.
By all means attack the unions and ALP for their internal corruption with all that means for social democracy and the regulation of the economy, but do not equate the cronyism of the two sides of politics without more subtlety.
I do take exception to “If they are both doing it, equally, then it is not so bad” – two wrongs don’t make a right, and more corruption surely isn’t a good thing; neither is the corruption of one party antimatter to the corruption of the other party… or do you think it is?
It would be great if we could get rid of corruption altogether… oh look, there’s a pink thing with wings flying past the window…
Of course two wrongs do not make a right, but my comment was kind of ironic in that the wrongs are of such a different order that they should not be compared in the same breath.
In fact, the ALP and unions need to clean up their mess to be able to take on the cronyism of the Coalition.
Oh, there goes your winged pig flying past my office window!
“oh look, there’s a pink thing with wings flying past the window…” A galah?
If two wrong don’t make a right, try three and keep on until the road runs out.
Two be sure! To be sure! To be sure!
So certain people within the union movement gain advantage personally, isn’t much different to the already rich gaining advantage.
Lib hacks build their careers same as ALP / union hacks. But they generally dont get access to fabulous govt contracts for their companies cos they rarely own companies or industry deals like the current deal to subsidise News Corp.
It’s fair enough to say that someone who steals a dollar and someone else who steals a million dollars are both dishonest, both thieves, so not much different. But they are still different.
You are both right, except something like our states desal plant we pay a french company for 30 years, was loaded with union guys who did more [very well paid] menial tasks admittedly, their other “job” was quite often was more about the patch they wore on their backs. Under Labors watch.
Here is another Victorian difference. They prosecuted Norm Gallagher to within an inch of his life but did not prosecute the bribe giving corporate entity.
Rather as governments go after whistle blowers but never editors of respected government gazettes masquerading as newspapers.
“The people of New South Wales and Queensland paid a heavy price for the role played by unions in blocking electricity privatisation in those states, leading to higher power bills and lower infrastructure investment in the name of preserving union featherbedding.”
Citation ? It’s my understanding that electricity prices are lower in Queensland precisely because it wasn’t privatised.
My observation over time is that for every dollar, even slightly misused by ALP and GREEN people, schemes and organisations, hundreds, actually thousands are screwed out, gouged, absorbed, by greedy self infatuated, righteous conservatives, a fellowship of felony, filth, fornicatory futtering. They are enemies of decency, so organised.
Micky West Media, last week, Sept 8th, a piece by Geordie Wilson titled;
“Outsourcing Government itself: the hidden privatisation of the public service
Example;
Department of Agriculture
This department outsources 830 jobs, with roles includïng assistant directors (13)….”
Yep, Dept of Ag has 13 Asst Directors operating beyond the reach of the ‘Public Service Act’, ergo not accountable to anyone beyond the ‘hire firm’ that arranged the 1/2 page contract.
Joint’s stuffed.
While you call or crony capitalism, I call it corruption
Mark, I think that is what it is, plain and simple; corruption. To the extent the cronyism is related to ‘capital’ is only because the cronies are corporates, or corporates are their vehicles/laundries for the corrupt money flows, or that the cronies are mostly the rich.
I consider the form of ‘capitalism’ that is favour with Morrison and his coterie of cronies, is ‘feudal capitalism’. This is best exemplified at the macro level by rising GDP and stagnant wages growth, ie. you create ‘capitalist serfs’ who work to remain poor. At the micro level just look at farmers bemoaning they don’t have access to $2.50 per hour backpacker workers!