We re­ally don’t love capitalism

The Sunday Telegraph (Sydney) - - OPINION - CLAIRE HAR­VEY

I’M go­ing to spell this out for you, banks, be­cause you seem too dim to work it out for your­selves. Aus­tralians don’t hate banks be­cause blokes like Ian Narev and the other CEOs earn a lot of money.

They don’t hate banks be­cause you charge 28 per cent in­ter­est on credit cards, or be­cause you fore­closed on grandpa’s farm. Ad­mit­tedly, that’s all pretty bad.

The real rea­son Aus­tralians hate the banks is be­cause you make too much profit.

I’m se­ri­ous. Aus­tralians like liv­ing in a cap­i­tal­ist econ­omy where they can buy nice stuff.

But they don’t re­ally like capitalism that much. They don’t like it $30-bil­lion-profit much. They be­lieve strongly that banks have a so­cial li­cence to op­er­ate a vi­tal ser­vice — a bit like sub­ur­ban trains — and although they’re happy for the banks to be strong and healthy and prof­itable, they do not wish them to make $30 bil­lion a year in profit.

That is too much. It is ob­scene. Why isn’t $10 bil­lion enough profit? What about $1 bil­lion? I know what the banks will say — they’ll say they need profit buf­fers be­cause they take such huge risks by lend­ing to peo­ple who may de­fault at any mo­ment. Aus­tralians get that. But Aus­tralians also know the banks are too big to fail. No Aus­tralian gov­ern­ment will ever al­low a ma­jor bank to col­lapse.

So here is the banks’ dirty lit­tle se­cret. The real rea­son they are ob­sessed with gi­gan­tic prof­its is they have CEOs on short-term con­tracts whose bonuses (and ten­ure) rely on one met­ric: profit growth.

The banks em­ploy a great many peo­ple and are won­der- ful pil­lars of our econ­omy.

They ben­e­fit from Aus­tralians’ in­nate cau­tion, and the lin­ger­ing mem­o­ries of events such as the 1990 col­lapse of the Pyra­mid Build­ing So­ci­ety, which en­trenched an en­tire gen­er­a­tion in the er­ro­neous be­lief the only safe fi­nan­cial in­sti­tu­tion was a big bank.

But the cold truth is banks can only keep prof­its grow­ing by screw­ing the lit­tle peo­ple. Aus­tralians un­der­stand that very sharply. Scott Mor­ri­son gets it too. That’s why he knows he can in­tro­duce a Great Big New Tax on banks to help re­pair the bud­get and fund a new reg­u­la­tory regime.

A few months ago, Mor­ri­son may have thought “Stop The Boats” was the catch­phrase that’d be on his grave­stone. In fact, it’s “Cry Me A River”. That’s what he said when the banks started their out­raged com­plain­ing about this. And he is right.

With this mea­sure as the cen­tre­piece of their 2017 Bud­get, Turn­bull and Mor­ri­son have dealt them­selves back into the game. Now, I hold no brief for ei­ther of th­ese men.

I thought it was wrong to oust Tony Ab­bott, de­spite the flaws of his gov­ern­ment, just as I thought it was wrong to oust Kevin Rudd, de­spite the man­i­fest flaws of his.

But I’ve also been be­mused by all the peo­ple so ea­ger to death-ride Mal­colm Turn­bull.

Since he took the job, Aus­tralia’s been split be­tween those who think he’s a fail­ure be­cause he’s a closet Trot­skyite, and those who think he’s a fas­cist. Ev­ery­body’s fu­ri­ous be­cause he hasn’t “done any­thing”; he hasn’t swept in a re­pub­lic or gay mar­riage, or cracked down on unions.

But Turn­bull, like him or not, has un­de­ni­ably re­cov­ered his mojo. It started with Snowy Hy­dro 2.0 and con­tin­ued with Gon­ski 2.0 (some­one needs to tell him 2.0 is no longer a thing — not since Vegemite tried to re­name it­self iS­nack 2.0, which pre­sum­ably was a prank).

He adeptly alerted the sleepy na­tion to the ter­ror of — and then re­solved with trum­pets sound­ing — a na­tional gas cri­sis.

And now the Bud­get, which no­body has yet been able to se­ri­ously crit­i­cise. Sure, it isn’t quite low-tax enough for some on the right, and not quite wel­fare-y enough for some on the left, but the cru­cial mea­sures are sound, will work, and will get through Par­lia­ment. Ex­hibit A, the bank tax. The banks may try on an emo­tive ad cam­paign, last ex­e­cuted to stun­ning suc­cess by the big min­ing com­pa­nies when the Kevin Rudd-Wayne Swan gov­ern­ment mooted a “re­source su­per-prof­its tax”.

The ac­cepted wis­dom is that the min­ing com­pa­nies’ hugely ex­pen­sive ad cam­paign was so bril­liant it per­suaded the en­tire pop­u­la­tion of Aus­tralia the su­per-prof­its tax was a dog, thereby killing it off.

Ac­tu­ally, that’s not what hap­pened at all.

All the cam­paign did was scare the be­je­sus out of La­bor Party par­lia­men­tar­i­ans, who freaked them­selves out so thor­oughly they dumped Kevin Rudd and Wayne Swan and brought in Ju­lia Gil­lardto make it all go nigh-nighs.

Swan and Rudd, and La­bor, could have kept their cool, and their jobs, and got it through.

If Mor­ri­son and Turn­bull want this enough, they’ll get it through. They know it will take more than TV com­mer­cials to change an en­tire na­tion’s mind about capitalism.

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