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Fight over bank levy signals change in rules of the political game

5 June 2017

Treasurer Scott Morrision came out swinging over the bank levy.  Photo: Pixabay/VDDigital/Public Domain

Last year Treasurer Scott Morrison was on his soap box confidently proclaiming that Labor’s demand for government intervention in banking was a “populist whinge” and “reckless political game.

This year Morrison is hell-bent on radical change, transferring power and money from the banks to the government. 

As well as introducing a cash-grab bank levy, the government plans to directly interfere in bank management. Under the new Banking Executive Accountability regime, the Australian Prudential Regulation Authority (APRA) will be able to fine and sack executives for wrongdoing and charge banks up to $200 million for misconduct.

What’s going on? There’s much more to this than the banks being asked to “pony up” their share of the budget fix. What's really at stake is a change in the rules with which corporate and government power is played.

'What's really at stake is a change
in the rules with which corporate
and government power is played'

One view is that after Morrison and his boss Prime Minister Malcolm Turnbull are looking for payback. They've gone to great lengths to protect the banks from the interference of a royal commission, but there’s been no reciprocation.

This kind of stubborn authoritarianism has been playing out through the Liberal Party in recent years, especially through Tony Abbott’s and then Peter Dutton’s aggressive, merciless and uncompromising position on asylum seekers.

But Abbott was always "open for business" and his captain’s calls never targeted corporate power. Morrison is leaping into different territory. 

Years of neoliberal reform, globally and in Australia, have seen a progressive shift of power in favour of large corporations.  Privatisation, deregulation, market liberalisation and falling corporate tax rates, have all contributed.

The raison d'être of right-wing politics for decades has hinged on liberating business from pesky government interference.  The liberal ideology rests on blind faith that doing so is the only route to prosperity.  From this position, interfering with markets and business is condemned as “socialist”.

No one would argue that Morrison is turning “red” but it does appear that he is acting directly against the established neoliberal doctrine that has led to the vast growth of what social theorist Joshua Barkan calls ‘corporate sovereignty’ – a form of power so extreme that it tends towards corporations literally being immune from the law.

The corporate sovereign is an ideal to which neoliberal corporations aspire, and which governments have cheered on.  Imposing new rules and laws that might limit that sovereignty is, for the neoliberal, politically incorrect.  Nevertheless, that it what Morrison is doing.

No wonder that the banks have hit back. The head of the Banker’s Association, Anna Bligh, started low by undermining Morrison’s credibility.  Bligh stated that the policy was developed hastily and without adequate forethought.  Morrison is playing “fast and loose” with the financial sector, she complained.

'He’s acting more like a
political street fighter
than a neoliberal ideologue'

Former CBA chief David Murray called the levy a "hate tax", and the Australian Foundation Investment Company’s Ross Barker labelled the moves an "attack".  Not afraid of using populist scare tactics, bank bosses have hit back saying the costs ultimately will be borne by customers.

Morrison is dismissive. “Cry me a river”, he is reported to have said.  The Treasurer has justified the tax specifically in terms of addressing abuse of power by the banks: “There have been recurring scandals and Australians remain puzzled by the big salaries, the rate rises and the fees for everything"

Coming out swinging, he’s acting more like a political street fighter than a neoliberal ideologue. This is an image that plays to a popular narrative where politicians are lauded for acting like chest-beating strong men.

Morrison’s skirmishes with the banks over the past month might just be a sign of what is to come in Australian politics. Many of us who have long criticised neoliberalism have done so with the hope that one day it might be replaced with a progressive alternative based on equality and social solidarity.

Instead, we are witnessing the possibility that the alternative is a game of macho showmanship were business leaders and politicians fight over power, for the sake of power. It's a zero-sum playground game, with the lives of citizens in the balance.

Scott Morrison is no Donald Trump, but his approach seems to resonate with that crude wish to assert yourself as the big boss. This might just signal a change in the prevailing political ideology.

Carl Rhodes is Professor of Organization Studies at UTS Business School. His current research investigates the ethical and political environments in which contemporary organisations operate