Why Malcolm Turnbull must call an election now

It was refreshing to hear Malcolm Turnbull late last year, while still newly ascended to the prime ministership and enjoying towering prominence in the polls, to put early election speculation to rest by declaring that the Coalition government would go full term. Rather than take advantage of his popularity, Turnbull said he was “expecting” to call an election “around September, October” this year.

This undertaking seemed to confirm the measure of the man; here was a Prime Minister who was clearly determined to retire the naked politics of his predecessor. Malcolm Turnbull was living up to voters’ expectations of their new Prime Minister being more statesman than politician.

Turnbull’s immediate appeal to the electorate was the fact that he was the antithesis of Tony Abbott: urbane, charismatic, articulate, thoughtful – prime ministerial. And perhaps most importantly he was perceived as a moderate and a modernist whose eye was on 2050 rather than 1950. Among his many faults, Abbott was embarrassingly stuck in a past that was no longer relevant to most Australians. The Prince Phillip knighthood fiasco was not of itself the reason to draw a line under Abbott’s cringeworthy prime ministership, it was simply one reflection too many of a tin-eared Prime Minister who was irretrievably out of sync with the Australian people.

Turnbull’s demeanour, reputation and public utterances on a range of hot-button issues suggested a Prime Minister in whom Australians could place their trust to be a leader for the 21st century.

But many voters of late have wondered what became of that idealistic figure, a doubt which has been reflected in recent opinion polls. Turnbull and the Coalition remain well ahead of Bill Shorten and Labor respectively, but there’s been a noticeable wobble in the polls recently which suggests voters fear that Turnbull is after all just another politician, albeit a charming one.

Turnbull has changed; he’s more of a politician than he used to be, and perhaps he needs to be to keep in check the febrile Abbott-right conservatives who are suspicious of his progressive inclinations.

Malcolm Turnbull is well aware, perhaps too aware, that he lost leadership of the Liberal Party to Tony Abbott in 2009, albeit narrowly, because he stood on principle rather than political opportunism in his support for the Rudd government’s emissions trading scheme.

The disappointing upshot of that experience is that Turnbull has gagged himself from speaking out on the issues that call for Keatingesque leadership and resolve: asylum seekers, same-sex marriage, the republic, climate change, et al.

Turnbull the heart-breaker

To hear a mealy-mouthed Turnbull casually dismiss the republic as a second-order issue is almost as heart-breaking as the republic referendum sabotaged by proto-monarchist John Howard. Turnbull’s insistence on a plebiscite, rather than a vote of Parliament, on same-sex marriage, is contrary to his earlier stated position and an abrogation of leadership on what is an essential reform. Turnbull turning a blind eye to the unspeakable suffering of asylum seekers in off-shore detention centres is another heart-breaker. On climate change – Greg Hunt’s Coco Pops award as Best Minister in the Known Universe notwithstanding – world leaders must be wondering if Australia has the same understanding of the threat posed by climate change as the rest of the world.

Even Turnbull’s broad-shouldered commitment that all tax matters would be up for debate as part of an open process to arrive at necessary tax reform has proven short-lived. Turnbull’s premature decision to rule out changes to the GST – despite his commitment to bring “rule in/rule out” politics to an end – revealed a Prime Minister who did not have the stomach for genuine consideration of the GST option.

Turnbull buckled under the pressure of Labor’s scare campaign against a “15% GST”, a rare win for Opposition Leader Bill Shorten. Yet there was every indication that the electorate was open to an increase in the GST from 10% to 12.5% as being in the national interest. Paul Keating, Australia’s most influential and unflinching economic reformer, while implacably opposed to a 15% GST as a general revenue raiser, did see merit in a GST increase of “one or two percent” if the extra revenue was earmarked for health spending.

But with Labor’s scare campaign starting to bite, Turnbull decided that discretion was the better part of valour and closed down the debate, leaving two State Premiers – Jay Weatherill in South Australia and Mike Baird in NSW – high and dry. They had taken Turnbull at his word and bought into the GST debate (supporting an increase) at considerable political risk to themselves. The backdown also caught short Treasurer Scott Morrison who was up for the fight and left him in a position not dissimilar to Paul Keating in 1985 when Bob Hawke reversed his support for then Treasurer Keating’s consumption tax – and we all know how that ended.

Seeking a mandate

So what’s going on? For those prepared to Turnbull the benefit of the doubt – including this writer – the forgiving interpretation is that he is unwilling to act on matters of policy principle until he can be sure of having a mandate that can only come with an election win in his own right. On this reading, Turnbull, his prime ministership “legitimised” through the ballot box, will have political license to unveil the “real Malcolm” without reference to his lunar-right colleagues.

On his recent performance, however, we are left to wonder whether even a mandate will embolden Turnbull. On the key policy areas outlined above, Turnbull has not even seen fit to drop any clues, subtle or otherwise, that change may come with a returned Turnbull government. But perhaps he is playing it extra careful.

If so, the time for an election is sooner rather than later. If Turnbull feels that he requires a win – and presumably a decisive win – before he can take on the conservative elements within his party, and indeed his Coalition partner, then he must attain that mandate at the nearest opportunity.

Labor is gaining traction when it accuses Turnbull of being Abbott in Italian suits; it is not a charge that Turnbull can allow to take root if we are to see the best of the Turnbull government.

Malcolm Turnbull will stand condemned if he squanders the opportunity that he has worked a lifetime towards.

Perhaps this is not lost on Turnbull. In recent weeks Turnbull has, despite his early assurance, hinted that an early election, and possibly a double dissolution, is on the cards.

According to some pundits, a double dissolution would give a returned Turnbull government rare control of both houses. That would be an even better outcome for Turnbull and indeed for Australia. Although there is some democratic merit in the government of the day not controlling the upper house, Australia is at risk of languishing as a middling back-water nation of no account. Or in the call-to-arms warning of Paul Keating, a banana republic.

Australia needs principled and decisive government. It is still within Malcolm Turnbull’s grasp to go down as one of our great Prime Ministers. There is no doubt that Turnbull has returned gravitas to the office of Prime Minister. But he must go much further if he and his government are to leave an indelible imprint on Australia in the way that the Hawke-Keating governments did.

There is no doubting the vision, intellect and stamina that Turnbull brings to government. But it is leadership that Australians call for; leadership that will herald Australia’s arrival as a 21st century nation.

This can be Australia’s century, and Turnbull is the man most likely to usher Australia well and truly into the new century. That includes decisive action not just on the economic front, but on touchstone issues such as the just and long overdue constitutional reconciliation with the First Australians, the republic, same-sex marriage, the environment, energy reform, asylum seekers, federation reform, population policy and no doubt much for.

It’s a tall agenda and it’s an agenda that the Turnbull government must address without impediment, compromise or political reservation. If an early election means that we get to see an untrammelled Turnbull government, then most Australians would welcome such an election. Bring it on, Malcolm.

 

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Whoever leads the government at the next election, it’s time for Bill Shorten to show he has what it takes to be PM

Bill Shorten has been wise to stay clear of the Abbott government’s leadership agonies. Tony Abbott, often derided for behaving as if he is still Opposition Leader, seems to be doing Shorten’s job as well. But Shorten cannot continue to rely on the imploding Abbott government.

Abbott survived this week’s leadership spill motion 61-39: that’s hardly a rousing victory. Ministerial solidarity saved the Prime Minister – which makes you wonder just what level of ineptitude it would take for Ministers to be guided by the national interest. Even so, Tony Abbott will not be able to rely on that solidarity a second time. He is now on notice that Malcolm Turnbull is waiting in the wings.

For Bill Shorten, it’s time to move from the sidelines and get back into the fray. It’s time – well time – for Shorten to demonstrate his credentials as Australia’s alternative Prime Minister.

He is almost certainly right to believe that facing Abbott at the 2016 election is the best chance he has of leading Labor back to power and securing for himself the prime ministership. But winning by default, as Tony Abbott did in 2013, is neither the key to good government nor to restoring Australians’ eroded trust in the institutions of power.

Bill Shorten owes Australians a blueprint for the nation in these critical times of post-GFC economic volatility. Many families are concerned about their financial wellbeing; many Australians are concerned about job security, and for too many unemployed, of ever working again; consumers are nervous and business is increasingly pessimistic about future prospects.

Shorten has made statements about what he will not do: he won’t place added pressures on the weakest and most disadvantaged in the community; he won’t deregulate the university sector; he won’t dismantle Australia’s universal healthcare system. These are welcome commitments, but now Australians need to hear what Shorten would do as Prime Minister.

Australia needs solutions to many fundamental problems, problems which are clearly beyond the wit of the current government.

There is a long list of serious challenges which require vision, a coherent strategy and public policy sophistication, none of which has been present in this government. Nor do the previous Rudd-Gillard-Rudd governments, of which Shorten was a member, stand close scrutiny on many of these challenges.

A long list of serious challenges

Australia faces many problems; let’s go through some of them.

An ageing population for which little provision has been made, and for that matter a rising population for which there has been even less planning.

Our health system is rightly the envy of the world, but it requires resetting for the challenges ahead. So does our education system, from schools, to higher education to vocational education and training.

The Australian economy is vastly changed, and faces even more profound change in the years ahead as whole industries restructure and even disappear under the weight of global competitive pressures, rapid advances in technology and shifting consumer behaviour. Labor squibbed reform of Australia’s ramshackle taxation system when it was last in power; Australia cannot afford not to undertake such vital and long overdue reform.

The depletion of vital funding that will keep Australian scientific research and innovation at the forefront of the world’s best is at crisis point and a national disgrace.

Australia needs to regain its place as a valued and respected member of the international community. Turning the global refugee crisis into a zero sum game for domestic political gain has dehumanised us as much as it degrades those stateless men, women and children who are fleeing oppression, torture and in many cases certain death. We cannot take all who would seek a place in this country, but that is no excuse for Australia to turn its back on these people and to place unreasonable pressure on inadequately resourced regional neighbours to shoulder a burden that is ours to bear.

Climate change, “the great moral challenge of our generation”, has all but become a political no-go zone – can there be a greater abrogation of leadership than reducing this crisis unfolding before our eyes to a matter of seats won and lost?

The fabric of the nation also needs urgent attention; whether it’s cultural diversity, religious and racial cohesion, women’s rights and inclusion, government has a critical, and under this government mostly neglected, role to play.

Bill Shorten, and Labor under his leadership, must confront these and many other issues. It seems an inexhaustible list of issues awaiting attention in very great part because of political inaction by both major parties.

Some issues cannot wait: true and proper reconciliation with the First Australians. Others must at least be put on the political agenda, such as reform of Australia’s creaking federation and system of government, including further consideration of the Republic.

It is simply not acceptable for Shorten to give himself the added insurance of not upsetting the prospect of certain victory by withholding a detailed plan to voters well ahead of the next election.

A generation of mediocre government

The blight of “small target” election campaigns has condemned Australia to a generation of mediocre government and mealy-mouthed sloganeering that masquerades as political leadership.

Shorten must repudiate the debased and deeply flawed modern political wisdom that being honest with the voters is a sure route to political oblivion.

Australia needs a plan, and Australians sorely want their trust in political leaders restored. Tony Abbott promised he was going to do just that. Instead, Abbott is a politician clearly out of his depth, as is his government, the most flawed, inept and duplicitous in the post-Menzies era.

If the challenges facing Australia were not so serious, it might well be enough that Bill Shorten is not Tony Abbott. But that is not the case.

Shorten needs to convince Australians now that not only is he committed to good government, but he has a gameplan that will drive his government. It is essential that he produce such a manifesto even if he is to face Abbott at the next election, and doubly so if, as is more likely, Malcolm Turnbull, in which case a one-term Coalition government is not such a certainty.

When Tony Abbott won office in 2013 it was despite Australians not being convinced that he was PM material. Which is why from the first opinion poll after winning office, voters expressed their remorse with an unprecedented repudiation of their choice. Voter dissatisfaction with Abbott and his government has been the one constant of this most chaotic, dysfunctional and arrogant of governments – as writ large in Victorian and Queensland state elections.

At this stage, voters are no more convinced that Shorten is PM material. The task of convincing voters that he is deserving of the highest elected office in the land, whether he is assured of it or not, must start now.

Shorten’s parliamentary performance during the Opposition’s no confidence motion in the Prime Minister immediately following the aborted leadership spill was a masterful and too rare performance. It was a speech coherent, articulate and withering, highlighting with pinpoint accuracy the government’s flaws, setting clear points of difference between Labor and the Coalition, and for once, none of his trademark lead-weighted zingers. Instead, humorous and well phrased barbs found their mark and energised the Labor benches. Tellingly, Shorten also had Turnbull in his sights, letting it be known that he was ready to face him if that’s where the political cards should fall.

Parliament still matters – and should matter. It’s the forum that provides the best insight into the men and women who would govern the nation.

From Shorten we need to see more such performances. A strong Opposition holds governments to account, and provides voters with a viable alternative come election time.

But more than performances, we need from Shorten his plan, his party’s plan, for Australia. A plan not just for the next three years, but for the next 30 years.

Let’s hear about the Australia that a would-be Shorten government believes in and will work towards. Let’s hear how a Shorten government will restore Australia’s shaken faith in Canberra. Let’s see more of the men and women on Shorten’s frontbench that would form government in 2016.

It’s time for Shorten to start thinking and behaving like the alternative Prime Minister. No silly zingers (Shaun Micallef won’t like it, but he’ll move on), no dad jokes, no unconvincing theatrics.

The government will sooner or later sort out its leadership issues. That’s none of Shorten’s concern. Whether it’s Abbott, Turnbull or anyone else, Bill Shorten has one life-defining task before him: to convince the people of Australia that he deserves to be the next Prime Minister. To date, voters have been given very little reason for believing that is the case.

Whether he does become the next PM is, of course, up to voters. But what voters want, more than anything, is to go to the polls in 2016 with two worthy alternatives to choose from. That’s one immediate contribution that Shorten can make to public life.

Bill Shorten: your time starts now.

The same old political solutions won’t fix Tasmania’s economic woes: what Tassie needs is a Gail Kelly

Tasmanians must be sick of hearing about their state being an “economy in decline”, a “basket case economy”, the “nation’s worst” economy and other choice epithets that leave little to the imagination.

Professor Jonathan West, founding Director of the Australian Innovation Research Centre at the University of Tasmania wrote a searing analysis of the state for Griffith Review:

“Tasmania ranks at the bottom among Australian states on virtually every dimension of economic, social, and cultural performance: highest unemployment, lowest incomes, languishing investment, lowest home prices, least educated, lowest literacy, most chronic disease, poorest longevity, most likely to smoke, greatest obesity, highest teenage pregnancy, highest petty crime, worst domestic violence. It seems not to matter which measure is chosen, Tasmania will likely finish last.”

That article was published in January 2013. Optimists might argue that Tasmania has since elected a Liberal government – Will Hodgman became Premier in March this year, ending 16 years of Labor government – a “pro-business” government, and a majority government at that.

The business community seems much happier with the Hodgman government than the previous government of Labor Premier Lara Giddings, and they certainly won’t miss the Labor-Green minority government.

And the Hodgman government seems to be sympathetic to the long-time and oft-expressed view of respected economist Saul Eslake that Tasmania’s economic salvation does not lie in a single “mega-project” – such as the aborted pulp mill project.

“A cargo cult mentality is not an economic development policy. And if Tasmanians can come to terms with that, there will be far fewer shattered hopes and dreams than there have been as a result of the economic development failures of the past three decades,” Eslake wrote in the Tasmanian Times.

(Eslake, chief economist at Bank of America Merrill Lynch Australia, has a particular interest in Tasmania. He was born in England in 1958 to Australian parents, originally from Sydney. The family settled in Tasmania when they returned to Australia in the 1960s. Eslake is an economics graduate from the University of Tasmania and was awarded an honorary doctor of laws degree by the university in 2012.)

But all this pre-supposes that Tasmania’s entrenched economic woes – which stem from its unique situation as an island state with a population of just 513,000 people – can be solved politically.

Barriers to change

The reality is that even a shiny new Liberal government with solid business credentials is going to find it hard going to solve Tasmania’s seemingly intractable problems.

Professor West argues that Tasmanians have grown so dependent on mainland financing that that the deep structural change that is required presents governments of any persuasion with barriers to change.

“Tasmania has developed a way of life, a mode of doing things, a demographic, a culture and associated economy, that reproduces underachievement generation after generation. …The reality is that Tasmania has bred a dominant social coalition that blocks most proposals to improve. Problems and challenges are debated endlessly, with no resolution. …Ultimately, Tasmania doesn’t change because its people don’t really want to.”

What is striking about this critique is that it could not be written about any other state. It is because Tasmania is so small – “both a region and a state”, writes West – that it is even possible to speak in such sweeping terms.

Political parties can promise to attract investment, create jobs and build a modern economy when in government – as the Liberals did in this year’s state election – but Tasmania’s issues don’t change, the challenges don’t change and the inadequacy of political solutions don’t change.

The mainland states have the critical mass, economic diversity and financial resources that provide governments with powerful levers to influence the course of economies.

The Hodgman government, like its predecessors, is limited in its options to revitalise the economy. Its “Change for a Brighter Future” economic blueprint was by and large more of the same.

In that document, the Liberals offered predictable platitudes – “growing our tourism industry”, “tackling Tasmania’s unemployment rate”, “backing small business”. Sometimes they were aspirational (if vague) – “building a stronger West Coast”, “looking to the future with energy”. But very often, with limited options, even the all-conquering Hodgman government has to make do with bland and piecemeal policy tidbits: “more tourists on TT-Line”, “unlocking the potential in our parks”, “growing jobs in the creative industries”.

Such a predictable laundry list of promises underlines the difficulties Tasmania has when it relies on political solutions: electorates to please, favours to curry, competing interests to balance.

Good public policy, democratic principles and pragmatic politics are as relevant in Tasmania as they are in any state, but given the depth of Tasmania’s economic malaise and the uniqueness of the region-state’s circumstances, an out-of-the-ordinary solution is essential.

This is a job for a CEO

On Twitter recently I made this suggestion: “An idea to toss around: Tasmania should appoint a bluechip CEO, responsible to the govt and the Plmt, with a 3/5yr brief to ‘grow Tasmania’.”

By “blue chip” I mean a CEO of, say, Gail Kelly’s ilk. Not a senior bureaucrat, not a businessman with an impressive LinkedIn profile, not an association executive or former politician, but the real deal. It wouldn’t be someone on $300,000 a year, it would more likely be someone on $3 million a year (which rules out Kelly, who is more than three times that, but you know what I mean).

This CEO would head an autonomous authority that operates within a democratic framework. The CEO would have a mandate that codifies powers and specifies objectives, budgets and community and environmental safeguards.

Within a defined mandate, the CEO would have the authority to pursue growth and development. (The CEO wouldn’t be the “CEO of Tasmania” – that remains the Premier; he or she would, for example, be the CEO of the Tasmanian Development Corporation.)

The Australian Innovation Research Centre recently identified six critical areas of economic opportunity for Tasmania: wine, dairy, aquaculture, horticulture, mining, and tourism. The CEO’s brief might specifically encompass some or all of these areas in fulfilment of the mandate for growth. Within a broad strategic framework set out by the government, the CEO would make the decisions required to make these profitable and sustainable sectors of the economy.

Former Victorian Premier Jeff Kennett, with characteristic immodesty, has offered his economic-revival services to Tasmania, but Kennett, not famous for his deft touch, is not the solution.

The Hodgman government has gone some way towards the CEO concept when it announced the creation of the Office of the Coordinator-General. The office, according to the Department of State Growth, is “responsible for attracting and securing investment in major development projects in Tasmania that maximises their contribution to Tasmania’s economic growth”.

“The Coordinator-General will help streamline the Tasmanian business environment, promote competitiveness and assist with the assessment and approval of investment opportunities.”

However, in what is a perfect illustration of the inadequacy of government and political processes to solve Tasmania’s economic troubles, eight months after being elected, the Hodgeman government has yet to appoint a Coordinator-General.

In anycase, the CEO would have more substantial responsibilities and would not be a glorified public servant. The CEO’s role would not be to act a conduit or to streamline processes, but to make decisions – to build the infrastructure required, to forge commercial relationships, to hire the people needed for the job, to implement plans: to achieve agreed outcomes.

This remains an idea to “kick around”. But the salient point is that innovative thinking is required to solve Tasmania’s problems. More of the same – the same ideas, the same political foibles, the same bureaucracies – will not work. The longer Tasmania’s depression continues, the harder it will be to build a sustainable future.

Tasmania’s unique beauty and magnificent natural wonders deserve to be recognised as a great national (and international) asset. Dishing up tired clichés and discredited ideas, however well intentioned, again and again, will be to squander Tasmania’s – and Tasmanians’ – potential. Tasmania deserves and requires a solution that is as unique as the state itself.

Canberra’s leadership vacuum provides an opportunity for business leaders who want to make a difference

As the Abbott government lays the foundations for deep cuts to services, welfare, health and education, in the name of ending “the age of entitlement”; as public policy becomes an incoherent and inconsistent torrent of media leaks, kite-flying and short-term political opportunism; and as trust in political leadership falls to all-time lows, the responsibility – and the opportunity – will increasingly fall on business to show leadership not just at the enterprise level, but more importantly, at the wider community level.

Today’s corporate leader has many responsibilities not borne – or given lip service only – by their predecessors, requiring skills, attributes, sensitivities and an ethos that has the potential to recast the corporate sector, create more profitable businesses, achieve greater community standing and set a new benchmark for leadership.

One reason that this responsibility falls on business leaders is because our political leadership has shown itself to be so inept, so insensitive, so unwilling to grasp the challenges that face Australia as a nation, as an economy and as a global citizen. Not since Paul Keating – or, if you prefer, John Howard in his prime – has Australia had leadership at the national level that inspires trust, confidence and respect.

What we have seen this week with the Commission of Audit and the government’s hairy-chested response was typical of the Canberra theatrics we have come to expect.

Tony Shepherd was chosen to head the commission precisely because he was going to deliver this blueprint. Well may the PM and his Treasurer nod sagely that this “independent” report confirms their worst fears about the economic mess left by the previous government. Australia needs visionary, credible government; instead we have a government that is still behaving like an opposition – scoring cheap political points while ostensibly dealing with a “budget emergency” that most economists say does not exist.

Unfortunately, I don’t see any immediate prospects for improvement in the quality of political leadership at the national level for at least a decade. If Tony Abbott retains the leadership, I believe he will lead the Coalition to a loss at the 2016 election. And Bill Shorten has failed to inspire as the alternative PM and has a battle on his hands to reform the Labor party, let alone the Australian economy.

So, here we are: a political impasse born of mediocrity, mendacity and mindless posturing at a time when, at the very least, there is the need for sound, disciplined economic management, but more urgently, medium- and long-term structural economic reform.

A failure of leadership

This dilemma – if not crisis – takes us back six years to the onset of the Global Financial Crisis. The GFC still casts a menacing shadow over the Australian economy and the Australian political scene.

The root cause of the GFC was a failure of leadership: lax corporate governance, arrogant CEOs, bloody-minded corporations, analysts focused on the short term, self-interested investors, and regulators who failed to supervise.

But in the past six years remarkably little has changed in policy or systemic terms that would prevent the GFC from occurring again. Almost certainly, there will be another financial meltdown that will take the global economy to the brink; almost certainly there will be another stock market collapse. There is a simple reason for this: in the end, you can’t regulate greed.

Government also can’t regulate against bad decisions, poor governance, half-witted incompetence, half-measures, ill-discipline or hubris – most especially its own, quite apart from the corporate sector’s.

Although there is broad consensus that the first Rudd government’s economic stimulus packages in the aftermath of the GFC were a critical factor in ensuring that Australia did not fall into recession, there is compelling argument that pumping billions of dollars into the economy in such a short time only delayed the inevitable economic slump: business closures, massive job losses, and whole industries, most notably manufacturing, deemed no longer viable.

The aftermath of the GFC gave new meaning to the expression “false economy”. Downturns have a purpose: to weed out poorly run companies and unsustainable businesses, and to provide opportunities for those companies willing to take risks, prepared to be innovative and to engage their workforce.

The absence of a clear recovery since the GFC has dulled the risk appetite of many companies. The ever-present prospect of the global economy slipping into another recession has many company leaders driving with one foot tapping the accelerator while the other is firmly planted on the brake – a bit like Volvo drivers.

Given more uncertainty ahead, companies have a choice: they can wait for a break in the gloom, or they can get a jump on their competitors and seize the moment. The time for swashbuckling CEOs may be over, but this is no time for diffident CEOs. As the likelihood grows of prolonged economic and political instability, waiting and seeing is not a viable strategy.

Many risk-averse companies are in danger of institutionalising a culture of caution in their organisations. This is making skittish employees even more nervous about their job security and financial prospects. It’s also making them angry.

Australian workplaces have never been angrier, particularly those who feel they did the right thing by their employers by sacrificing pay and conditions following the GFC.

Employees are feeling short-changed

Employees feel short-changed by employers that are continually gutting companies of resources through relentless cost-reduction, mass layoffs, placing careers on hold and keeping a tight rein on remuneration – all without any evidence of a plan or vision for the future. Employees feel they are under-valued and their contribution barely acknowledged as fewer employees take on greater responsibilities, while being kept in the dark by uncommunicative or mealy-mouthed managements.

The mood of workplaces has been unchanged since the GFC; what has changed is that workplaces are becoming smaller, and many are disappearing: Ford, GM Holden, Toyota, Alcoa’s Port Henry Smelter … and this week, iconic Australian manufacturer of bakehouse products Big Sister Foods. This economy really does take the cake.

It’s in this very volatile environment that Australians are crying out for strong leadership – they are looking for leadership not just in their own workplaces, but in their communities and across the nation. It’s a new kind of leadership that they are seeking and they have stopped looking to Canberra for it.

After the election of the Abbott government last year there was a momentary spike in voter confidence and consumer sentiment, but it took just the first opinion poll after the September election to reveal an unprecedented case of voters’ remorse, with Labor leading the Coalition in the two-party preferred vote: 52% to 48%.

According to the 2014 Edelman Trust Barometer, only 38% of the general population trust government but 49% trust business – hardly resounding, but still reassuring. The annual survey by public relations company Edelman publishes levels of trust within the general population as well as the “informed public”, which comprises university-educated, high-income Australians.

The survey found that Australians expect business to play a much bigger role around the debate and design of regulation: 73% of the informed public believes government should not work alone when setting policy. Although Tony Shepherd is probably not what they had in mind.

As Edelman explains, it has traditionally fallen under the remit of government to create the context for change, but today, and here I quote: “[P]eople expect businesses to play a bigger role in shaping a positive future, trusting business to innovate, unite and deliver…CEOs must now go beyond their operational remit to become chief engagement officers, educating the public about the context in which their business operates.”   

This trust in business is not-open ended. The survey found that size and ownership type of the business has a bearing on trust levels: 76% of Australians favour family-owned businesses, 67% small-to-medium businesses and less than half, 42%, big business – suggesting that CEOs from the big end of town still have some bridges to mend and reputations to heal.

A different kind of business leadership

But the opportunity is there for all business leaders who want to make a difference – both to their businesses, and more broadly in the community.

The leaders who will excel in this environment will have the ability to inspire confidence and trust – not just in their employees, but among all stakeholders. They must demonstrate not only technical leadership, but personal leadership as well.

The leaders who stand out in this economy will no longer take their consumers for granted; they will rethink the role of customer service and make the customer a genuine partner in growth. Leaders with an eye to the future will invest in the training and development of their rising talent. Tomorrow’s leaders also care about the society they and their employees live in.

The characteristics of successful business leadership could not be further removed from the macho management style of yesterday’s hero-CEO typified by the legendary Jack Welch, the former CEO of General Electric in the United States, who in the 1980s and 1990s was the template for the corporate CEO.

Today’s business leaders have a very different environment in which they must operate. It is now understood that employee engagement is a key motivator of end-of-year results.

Employees’ expectations for recognition and inclusiveness have radically changed the way managers and employees interact in the workplace – at least in successful organisations. This has put managers and leaders under more pressure to develop a more communicative style of management.

Employee surveys find again and again that the biggest contributor to employee disengagement is disaffection with non-communicative, unresponsive line managers. Disengaged employees often feel they are not valued or understood, they don’t feel part of the decision-making processes and they resent not receiving regular feedback from their immediate manager. This disaffection is heightened when elaborate HR policies state that these things should be happening as a matter of course.

Whether it’s C-suite executives or line managers, technical skills are no longer enough. Employees respond to managers and leaders who are inspirational, empathetic, good communicators and even better listeners. Managers have to be able to communicate with their employees that the role they play in the company is important and that their contribution is valued.

Employees want to understand the vision and values of the organisation they work for and they want to be active participants on the journey towards those goals.

People want to work for a company that has heart, they expect that a company will treat its people fairly, they expect an organisation to have meaning and purpose for them as individuals but also for the community, the environment and even the world. They want leaders who stand for something; who live their values in the workplace and they way they conduct themselves externally.

The ‘Productivity Secret Weapon’

If employees do not have these things in their workplaces, they will leave first chance they get.

The World of Work report by recruitment firm Randstad found that 56% of employees began 2013 with the intention of changing employer. But even if employees are unable to realise that ambition, it’s obvious that they will not be giving their present employer their absolute best. Productivity is often seen in terms of labour laws, the cost of labour and overbearing unions – but successful organisations understand that a well managed workplace, and a happy workforce, is the Productivity Secret Weapon.       

In addition to all the usual functional and technical skills, today’s leader requires many personal – or “soft” – skills, as well as the attributes of agility, adaptability, innovation, experimentation, and they have to have the foresight and nerve to identify and act on opportunities in a rapidly changing marketplace.

These are skills most often associated with entrepreneurs. Entrepreneurs are instinctively closer to their customers and employees; closer to their markets; they are better communicators and recognise the benefits of being so; they’re innovative; they have passion but they’re also canny; and innovation is their lifeblood. Increasingly, corporate CEOs are recognising the benefits of possessing these entrepreneurial qualities.

There’s more to being a modern business leader than a balance sheet – but there will always be a balance sheet. For anyone in business, what’s important are the values, the vision, the purpose and the ethos that motivates, inspires and engages at a personal and organisational level.

Today’s business leader is a leader beyond the confines of the enterprise. Whether it’s through personal motivation, social responsibility or a sense of good business practice, business, more than ever, is about doing the right thing.

It is a pity that this message is not getting through to Canberra. 

This is an edited extract of my speech to the Woodpeckers Club business lunch in Melbourne on Friday 2 May.