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Public Consultation - Tell us what you think 

The voices of Australian citizens are rarely heard in our political system. Our voices have been marginalised by the Two Elites in our country - the Establishment of the Right (the big end of town, corporate power) and the Establishment of the Left (state bureaucrats, public sector managers). The vast majority of Australians are rendered powerless spectators. We look on at the capture of our politics by two highly unrepresentative ruling groups.

We are conducting a series of public consultations on policy ideas and strategies for the development of a large, broad, community-based political movement that can represent the Heart and Soul of Australia.

This survey is designed to get your input. Answers are anonymous unless you indicate otherwise.

The Concentration of Economic Power in Australia
What should be done in Banking, Retailing, Media, and Mining? How can we develop a Widespread Ownership of Capital?


Here are a number of options for tackling the concentration of economic power in Australia in banking, retailing, media and mining, and building up a widespread ownership of capital amongst Australians. Choose the options you support (by ticking the appropriate box), and adding additional comments or suggestions.

Australia has one of the most concentrated and least entrepreneurial corporate sectors in the western world.

With the possible exception of Billabong Surfwear and the Cochlear ear transplant, there are no Australian companies that are global brand names (Qantas is in rapid decline) and few that can claim to be global pacesetters in innovation. Most of Australia's corporates are content to be big fish in a little pond, wielding levels of market share in the domestic economy that most western countries prohibit, while the global economy passes them by like a visiting circus.

Both major parties have supervised the growing concentration of economic power in Australia. Both have failed to restrain the anti-competitive culture of big business, erected unnecessary barriers to entry for competitors, and failed to stand up for consumers and small businesses. The big four banks, the big two retailers, and a handful of media barons return the favour to the two major parties with substantial corporate donations.

The mining boom has compounded the problem of concentrated ownership. A new generation of landowning mining magnates have found themselves in possession of  vast financial assets and economic power, which they are using to acquire interests in media, football clubs, tourism resorts, gaming facilities and property, but not in knowledge-based innovation or technology.

Everyone knows the problem. The two major parties have been part of the problem, and are incapable of doing anything about it. As citizens, we have to take the initiative ourselves.

Australia has one of the weakest sectors of family and small business in the developed world. Employee ownership of firms in Australia is poorly developed compared to other advanced economies, and our once important mutual and co-operative sector has been marginalised by successive governments. Self-employment continues to be subject to taxation and regulatory impediments to mainstream acceptance. Large populations of workers, people with disabilities and illnesses and their carers, and indigenous people have been locked out of economic ownership for generations. Both major parties have presided over this large-scale social and economic exclusion.

In what follows, we present a number of options for tackling the concentration of economic power in Australia in banking, retailing, media and mining, and building up a widespread ownership of capital. Choose the options you support (by ticking the appropriate box), and adding additional comments or suggestions.

Banking

Australia's highly concentrated banking sector is dominated by four banks (Commonwealth, ANZ, National Australia Bank, and Westpac) who currently enjoy unprecedented levels of profitability. Between them the big four banks command 87% of market share in mortgage lending and 74% of market share in retail banking. Yet competition between them does not drive down fees and charges for consumers, and does not drive differentiated product design or innovation. The big four offer largely the same products at the same prices.

Which of these measures do you support?

A cap on market share by any one bank of 20% in any segment, and a forced divestiture of assets by any bank which exceeds the cap.
Strengthening of  the Trade Practices Act provisions dealing with anti-competitive behaviour, price fixing and collusive behaviour in banking.
A requirement for banks to introduce lending products for small businesses and the self-employed as a condition for holding a banking licence.
Prohibit banks from holding a debt/equity conflict of interest (ie prohibit banks from lending to companies in which they hold equity).
Removal of regulatory impediments to the formation of new credit unions, building societies and banks, and easing of the regulatory and compliance burden for small institutions.
Prohibit banks from ownership of capital in other companies (a measure favoured by free market guru Friedrich Hayek to prevent banks from acquiring a dominant place in national and global economies, and to ensure banks remain servants of other corporations, not their masters).
Other (please tell us

Your comments and suggestions:


 
Retailing

Australia's highly concentrated retail sector is dominated by two companies (Coles and Woolworths) who have 70% of market share in retailing. By contrast, the two biggest retailers in the UK and USA command  48% and 20% of market share respectively. Australia's extreme levels of concentration have an adverse impact on both consumers and suppliers, particularly in farming and rural communities. The Coles-Woolworths supermarket duopoly holds farmers to wafer-thin margins. Prices paid to growers fall and prices paid by consumers rise.

Which of these measures do you support?

A cap on market share by any one company of 30% in any segment, and a forced divestiture of assets by any company which exceeds the cap.
Strengthening of  the Trade Practices Act provisions dealing with anti-competitive behaviour, predatory pricing, price fixing and collusive behaviour in retailing.
Prohibit retailers from acquiring interests in gaming, alcohol and tobacco companies.
Other (please tell us)

Your comments and suggestions:

Media

Australia's major media outlets are the preserve of a handful of media barons. Three families (Murdoch, Packer, and Fairfax) have wielded extraordinary influence in the transmission of news, opinion and culture. The ownership of print media in major population centres is a duopoly.  Licensing arrangements in television and radio constitute an artificial barrier to new entrants. The ABC was established as an independent state-owned broadcaster but it's ability to maintain independence is continually questioned in the face of political board appointments by governments and 'content capture' by staff. Niche market publishing and narrow-casting will enable new ownership models to emerge, but these are excluded in broadcasting.

Which of these measures do you support?

Abolition of licencing fees for television and radio to allow new entrants (ongoing administration fees for industry regulation should be set at cost-recovery rates and not used as money-making auctions for governments).
A 'community right to media' preference should be introduced on the closure of any existing television, radio or newspaper, meaning that a community-benefit organisation should be given first preference in purchasing these operations ahead of commercial entities.
Removal of restrictions on the operations of community-owned radio and television stations.
The Commonwealth should withdraw its control over appointments to the ABC Board by converting the ABC from a statutory authority to a user-owned mutual.
Other (please tell us)

Your comments and suggestions:

Mining

The mining boom has compounded the problem of concentrated ownership. A new generation of landowning mining magnates have found themselves in possession of  vast financial assets and economic power, which they are deploying in acquisitions as diverse as media, football clubs, tourism resorts, gaming facilities and property, but not in knowledge-based innovation or information technology. No mechanisms have been put in place for using the proceeds of the resources boom for the capitalisation of long-term economic development.

Which of these measures do you support?

A cap on market share by any one company of 30% in any resource segment, and a forced divestiture of assets by any company which exceeds the cap.
A levy on mining revenues to fund a Capital Account for citizens with disadvantages for the purposes of building personal stocks of capital (see below).
A requirement that a proportion of revenues from mining operations be allocated to investments in the localities of each operation.
Other (please tell us)

Your comments and suggestions:

A Widespread Ownership of Capital

Neither of Australia's two major parties have strategies for developing a widespread ownership of capital by Australians.

Which of these measures do you support?
 

Cut the company tax rate to 10% for firms which have employee share ownership arrangements where 50% or more of employees own 50% or more of shares in that firm, with eligibility set at firms with 6 or more employees.
Establish a Capital Account for eligible citizens between the ages of 18 and 55 for the purpose of building personal stocks of capital. The Capital Account would be  administered by authorized fund managers, into which an annual contribution of $5,000 would be made from the Commonwealth for a maximum of 10 years, supplemented by individual, employer and philanthropic contributions. Withdrawals from the Capital Account may only be made for business, property or share portfolio acquisition or development.
Citizens eligible for the Capital Account would include:
   1. People with disabilities, mental and chronic illnesses, who have been unable to hold a regular place in the paid workforce;
   2. Carers with caring responsibilities which have prevented them from holding a regular place in the paid workforce;
   3. Individuals whose net assets do not exceed $200,000, or whose parents' net assets do not exceed $200,000.
Fund the Capital Account with a levy on mining revenues and the removal of tax concession for the housing industry. (Tax concessions for the housing industry amount to a staggering $53 billion annually, effectively a transfer of wealth to property developers without solving Australia's chronic shortage in affordable housing).
Prohibit corporate donations to political parties (from companies and trade unions) and permit donations only from individual citizens.
Establish a SME and Family Business Succession Scheme whereby ownership plans may be developed to transfer ownership on retirement of the principals to other SMEs, family businesses and social enterprises.
Other (please tell us)

Your comments and suggestions:




Optional: 

Name    Email


Thanks for your input.

We will public a draft policy incorporating the results of this survey, which will be prepared by the Public Commission for New Forms of Governance and Leadership in Australia.

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