Something rotten in the state of Australia

The government’s National COVID-19 Coordination Commission (NCCC) is revealing who it really serves; Australia’s corporate and fossil-fuel lobby.

Despite the release of the Australian Energy Market Operator’s much awaited Integrated System Plan, which finds that energy storage (pumped hydro and batteries) is likely to be more cost-effective than gas in providing ‘firming’ power, NCCC Chair Neville Power has nonetheless stated that the body would recommend government support for expanding gas infrastructure.

At a glance, it might not be clear why Mr Power, the former lieutenant of Twiggy Forrest who proved himself capable in managing the export of huge amounts of red ore to China, would be the most capable person to lead Australia’s COVID recovery. Perhaps in Scott Morrison’s view of the world, if you’ve made a lot of money as a corporate leader, you must be really pretty smart and that acumen crosses over to the business of governance.

If that were the case, you would think Neville and the other members of the NCCC board would release their conflicts of interest and get on with the business of developing a robust and transparent economic recovery strategy. But as of today the only member who has publicly released their conflicts of interest is Greg Combet, and he resigned from the NCCC board at the end of June.

Meanwhile, Mr Power, who is also Deputy Chairman of gas exploration firm Strike Energy, appears to be quite content in ignoring the 18 months of modelling and consultation work done by AEMO and their conclusion that the best thing the government can do to lower energy prices is upgrade transmission lines to remove bottlenecks and facilitate the scale-up of renewable energy.

Never mind that AEMO CEO Audrey Zibelman has more than 30 years’ experience working in electricity utilities, including as Chief Operating Officer of PJM in the United States, the largest deregulated electricity grid in the world outside of the European Integrated Energy Market.

And what should we make of another NCCC advisory board member, EnergyAustralia CEO Catherine Tanna? Her company has a 20% stake in the $3.6 billion Narrabri gas project, which just so happens to be one of the four projects the NCCC recommends providing government support for in a leaked interim report.

There is a larger issue at play here.

The foundational idea of capitalism is that the job of corporate leaders is to serve their shareholders by carving out market power. The intention is that with a packed ecosystem of self-interested businesses competing with one another, no one company will gain dominance. Economists call this outcome ‘perfect competition.’ It is the idea upon which the entire basis of neoliberal economics rests.

There was never any suggestion that corporate leaders have altruistic motives. Economist John Maynard Keynes put it this way:

Capitalism is the astounding belief that the wickedest of men would do the wickedest of things for the greater good of everyone.

(We note that these days the privilege of corporate management is also extended to women).

But in today’s globalised economy, competition is starkly in decline. Corporations have captured Australia’s major parties with the aim of influencing policy to their benefit. This assault of democracy is occurring across the world. Global firms that have consolidated their market positions over the last few decades have the size and diversification to weather the COVID-crisis and it is these firms that are poised to step in and pick over the profits of the small businesses who will not survive.

In this environment, corporate leaders with deep conflicts of interest are not who should be dictating economic policy. If the government was serious about putting together a COVID commission to really consider the economic well-being of Australians, it would include representation from health professionals and small business leaders. Putting corporate CEOs on the commission is akin to putting the fox in charge of the henhouse.

The government should abolish the tainted National COVID-19 Coordination Commission and stop its threats against the Energy Security Board.

Democrats Economics campaign team

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