Four public companies in receivership, high profile chief executive departures, a free-falling currency and the biggest building down-turn in Australia's history. It all points to a crisis of confidence in corporate Australia as a new generation of managers confronts the harsh reality of making money in a climate of low inflation, fierce competition and depressed demand. A 15% decline in housing investment was the prime contributor to the fall of 0.6% in the gross domestic product in the December quarter. Further signs include an increase in receiverships, business auctions and voluntary administrators, personal bankruptcies and insolvencies. Companies under the biggest strain are those in distribution and services linked to the building and manufacturing centres. Qantas has issued three profit warnings in the past six months, and has seen over $2 billion wiped from its market capitalisation. [Damon Kitney and Peter Kormendy, AFR 7.4.01]

Pauline Hanson, leader of the One Nation Party, said all foreign takeovers should be banned if our dollar falls below US 60 cents. Her party was opposed to the ten billion dollar takeover bid by Shell for Australia's Woodside Petroleum. She said dramatic steps had to be taken to prevent bargain hunting by multinationals, and the loss of jobs when companies were moved offshore. [Katharine Murphy, AFR 2.4.01]

The Treasurer, Mr. Costello, rejected Shell's $10 billion takeover bid for Woodside Petroleum, staring down immense pressure from foreign investors by declaring it was not in the national interest. Mr. Costello's historic decision to block the foreign takeover of Australia's biggest energy resource prompted a savage slide in the dollar... If the takeover had proceeded the Dutch multinational Shell, would have become operator and marketer of the huge North West Shelf gas reserves, which has six joint venture partners. Mr. Costello said that Shell had more than ten billion invested around the world in a whole host of resource projects, and no doubt looks at maximising its global profit. But from the Australian perspective he looked at maximising Australia's exports. Shell's assurances to protect Australia's interests could not be guaranteed because it had to convince the other joint venture partners. He said only 3% of foreign investment applications were turned down. [Tom Allard & Matt Wade, SMH 24.4.01]

It is not often that a Liberal Treasurer provokes such powerful interests... But that's what he did - sticking it right into the global financial markets, the Melbourne business establishment, and a powerful multinational company to boot. Costello says Australia's national interests lie in maximising the long term opportunities of its biggest energy project - the N.W. Shelf. That means not handing over crucial decisions about how the project is developed to a multinational company with a range of competing interests in the region. [Laura Tingle, SMH 24.4.01]

Dr Evan Jones of Sydney University, said the government's decision was "courageous under the circumstances"; it was correct about development and marketing of the resource coming under foreign control. However, he said the decision was specific to the case rather than any change in FIRB policy.[ Paul Cleary, "FIRB is all too murky" in AFR 24.4.01]

Raymond Vernon, one of the world's experts on transnational corporations died recently. In the 1960s he founded the Harvard Multinational Enterprise Project, which spawned many books and articles on the subject. In his last book, In the Hurricane's Eye (1998), he thought pressures from aggrieved constituents could be expected to break out, harming both national interests and those of multinationals. He noted that in the 1990s their resurgence had taken place with the urging and support of the IMF, the World Bank and the US government. He also noted that the lingering mistrust of many developing countries in multinationals stems partly from the political influence that such corporations can exercise over governments. To prevent this he advocated increased transparency and openness, harmonisation of laws and taxes, and better enforcement of competition rules. [Tagi Sagafi-nejad, Professor of International Business, Loyola College, Maryland, USA, in Transnational Corporations, Vol 9, No. 1, April 2000, published by the United Nations.

The British Department of Trade and Industry has just published the results of a ten-year inquiry into the activities of financier Robert Maxwell. Two inspectors interviewed 176 witnesses, took written evidence from 111 others, and sought information from 46 financial institutions. The results are in a 2 volume 700 page report, which depicts these institutions as either ignoring abuses, or being tempted into dealings with crooks. Merchant bankers, accountants and investment bankers are castigated, as is the British Stock Exchange, and a number of well known British investment houses. Auditors did not report abuses of pension funds to trustees. Investment bankers Goldman Sachs are blamed for the way they helped Maxwell manipulate share prices; stock exchanges were lax in their dealings with him. The inquiry cost $25 million. [SMH 2.4.01]

The Australian Prudential Regulation Authority highlighted deficiencies in the supervision of some foreign owned banks in our domestic market. It said current regulatory arrangements did not comply with international standards. Six foreign banks in Australia operate as "merchant banks" under special provisions which allow such regulation to be escaped. [George Lekakis, AFR 10.4.01]

Globalisation, accelerated by the internet, is exposing serious flaws in the world's tax systems. Rich individuals and big companies, aided by accountants and lawyers, can base themselves in high tax countries with high quality public services, while paying tax in low or no-tax regimes, usually based in exotic boltholes. Well-run transparent offshore financial centres perform a useful role, enabling multinationals to escape complex regulatory webs spanning several different national tax authorities... Secretive, often corrupt regimes that a have no questions asked mentality about financial transactions represent a threat to both developed and developing countries. Oxfam says developing countries should receive tax revenue of around $85 billion a year from foreign corporations, but they actually receive around $50 billion a year. Several offshore financial centres have pledged to eliminate harmful tax practices, but a sizeable group in the Caribbean has not. [Mark Atkinson, Guardian Weekly 15.3.01]

Professor Allan Fels, the competition watchdog chairman, renewed his attack on banks over their credit card interchange fees, describing the existing arrangements as a gravy train. Speaking to a parliamentary committee in Canberra, he castigated Visa in particular for its lack of cooperation in negotiations, which he said, has been on a gravy train for years. He also accused the A.M.A. of pursuing a secret plan to get rid of bulk billing. [AFR 1.4.01]

Dr Ken Macnab, retiring from teaching history at the University of Sydney for 36 years, sounded a warning bell about the rise of economic rationalism and managerialism. He said it took a century to reduce working hours significantly, stop workers being exploited, and redistribute the benefits of economic growth. Now these gains were being eroded by privatisation and de-regulation, which are failing to bring promised efficiency. Instead they reduce the quality of life of all except the wealthy, the managers and the profiteers. [University of Sydney News, 23 March 01]

The government must bolster depressed regional areas with high unemployment, or risk national disintegration, according to a study by the Institute of Chartered Accountants and local Governments. They call for a $2.6 billion rescue program for regional Australia, focussing on areas with unemployment 50% above the national average. The study draws on European and American experience and calls on the government to develop incentives for regional Australia. [Allesandra Fabro and Tony Walker, AFR 4.4.01]

Since the late 1970s those theories known as "economic rationalism" have dominated the political agenda around the world. They call for the marginalisation of union power, the roll-back of the welfare state, the encouragement of the forces of global capital, the elimination of regulation, and the privatisation of publicly owned infrastructure. After a quarter of a century these policies have resulted in growing inequality... high levels of unemployment, increasing economic insecurity, the casualisation of the workforce, and ongoing environmental degradation.

Whilst the left has struggled to counter `economic rationalism", it has laboured under the popular conception that the solutions it offers are disparate and outdated. Consequently, even though this "rationalism" has alienated a large proportion of the population, ...the left has failed to capitalise on this sense of dissatisfaction...

In his new book Frank Stilwell presents a political and economic agenda designed to promote social equality, environmentally sustainable development, security and quality of life. [Changing Track: Towards a New Political Economic Direction for Australia, Pluto Press, Sydney, 2000]. We therefore welcome Stilwell's work as a significant step on the road to making the left more relevant in Australia's political life. [Editorial in Australian Options, No.24, February 01]

Australia is trapped between a populist anti-big-business culture and a vulnerability in global markets, as its dollar bumps along below US 50 cents, its economy hovers near recession and it slides off the foreign investment radar screens. There is now talk of an emerging political risk in Australia... The Howard government can't decide whether it is liberal or populist, whether to have the courage of its alleged superior economic credentials, or prove its post-Ryan listening credentials by buying off community angst. Labor wants a new philosophy of mutual obligation from business. It wants a revised social compact with the community in an effort to rebuild political capital for economic change. That capital is close to exhausted now. Labor's idea is right and essential, but implementation is tricky. [Paul Kelly, Australian, 1.4.01]

A.L.P. policies on corporate governance are important; they make it an election issue for the first time. A majority of voters now participate in the ownership of listed companies, but are denied ways to control corporate misbehaviour or enhance business performance...People feel alienated; company directors are seen as self-serving elites protected by connections with political parties... Reliance on plutocracy is seen as highly risky, as demonstrated by some major companies losing billions of dollars of shareholder wealth, such as GIO, AMP and BHP. Plutocratic governance is inconsistent with democracy and establishing checks and balances to avoid concentrations of power which can corrupt executives, directors and corporate performance. [Shann Turnbull, AFR 3.4.01, (emphasis added)]

The rich really do want to inherit the earth, according to John Lloyd writing in the New Statesman, and there is little at present to stop them. The move towards oligarchy - the rule of the rich - is a direct consequence, he thinks, of the poverty of democratic politics. British parliamentarians got a pay rise in April to 50,000 pounds; comparable jobs in the public sector pay about the same. In the private sector comparable jobs would pay twice or three times as much... Financiers and business people who have their pay set globally, receive salaries deep in five figures, making those at the top end multi-millionaires... When politicians work and live in relative poverty and are surrounded by relative wealth, temptation is constant... The pressures on the political and state functions, from capital and criminality are increasing greatly... The temptations are much larger... and the prestige of both politics and state service weakens... Our graduates today know that the real source of innovation and change lies in the private sector. Those countries where oligarchy remains on the fringes... have a duty to themselves and others to protect and enhance public life, which includes a public service entered into as a profession, not a good deed. [Reprinted in AFR 30.3.01]

This is the advice of a US management guru, Tom DeMarco, in his new book, Slack, which is an anti-overtime, anti-restructuring call, to sit still, slow down, and hire clerical support. He said that we have now gone as far as we can towards super efficiency, and no clerical support, towards trying to define and standardise processes so that you can treat people like machines. It reduces spare time so that people have no time to think. He says that all the downsizing, right-sizing, and middle management purging, which made business go faster in the 90s, have undermined its capacity to change. It is like a car which can speed up but cannot steer - it makes lots of progress in whatever direction it happens to be going, but in the long run it is just another road wreck. [Fiona Buffini, AFR 4.4.01]

Overtime is increasing - by 277 million hours in the last two years, reversing the historical trend of a shorter working week. Over the last 20 years the average working week has lengthened from 39.9 to 42.9 hours. In the last year 1034 million hours of overtime were worked - equivalent to about half a million full-time jobs; at present 585,000 Australians are recorded officially as looking for work... The deregulation of the labour market is partly responsible for worsening the maldistribution of work... Longer hours of work have been holding up the economy for the past nine months. [Clive Hamilton, journal of The Australian Institute, March 2001]

Trade union membership in Australia has increased for the first time in over a decade, but is still failing to keep pace with job growth. The proportion of workers belonging to unions is now only 25%. The secretary of the ACTU, Greg Combet, said that: "Growth is in the areas where unions need to grow for the future, which is a positive sign". He attributed the growth to the new organising model pursued by the union movement which focusses on grass roots activism in the work place. [Stephen Long, AFR 1.4.01]

According to a new book a campaign against economists is being waged in Australia. One source of this antipathy is the economists' pursuit of policies favourable to the public interest. If economists are popular they are not doing their job in defending the public interest. [William Coleman & Alf Hagger, co-authors of Exasperating Calculators: The Rage over Economic Rationalism and the Campaign against Australian Economists (Macleay Press, 2001)] [William Coleman, AFR 19.2.01]

Reviewing Alan Lightman's book, The Diagnosis, (Bloomsbury 2001), Abraham Verghese notes that in a sense it is an interpretation of Socrates in the context of our modern world, i.e. if you put vanity or the accumulation of material possessions before the care of your soul, you risk ruining your life... Lightman's novel captures the great confluence of our times: information overload, unimaginable prosperity, and spiritual bankruptcy. [AFR 30.3.01]

Sydney's Lord Mayor, Frank Sartor, backed Paul Keating's call for the real estate industry to be banned from giving political donations. "They donate to both sides", he said: "I think it makes it very difficult". The comments angered several property developers, but most are coy about disclosing their donations. Lend Lease is one of the few to publish them in its annual report. In the year 2000 it reported giving $42,000 to the Federal ALP, $62,500 to the Liberals, and $10,000 to the National Party. Michael Yabsley, NSW Liberal Party fundraiser said that disclosure laws in Australia are among the toughest in the world. He said that since the launch of the Liberals' Millennium Forum in November 99, he had raised $3.5 million from major companies including property developers and builders such as Multiplex, Mirvac and Meriton.[Lisa Allen, AFR 6.4.01]

Rodney Adler, one of Sydney's leading businessmen and Liberal Party donors has condemned the Howard government for its economic management. He said it had ignored the seriousness of the currency crisis, underrated the Opposition Leader, taken small business for a ride, and damaged the financial future by abandoning fuel excise indexation. He said the economy had been in recession since November; the currency situation meant that Australian business faced horrendous costs travelling overseas, and the coupling of the GST with the business activity statement "was the straw that broke the camel's back". [David Humphries, State political editor, SMH 4.4.01]

The new Bush administration could end up more right-wing than Ronald Reagan's... Bush has adopted hard line positions on a growing number of issues, including pollution, workplace regulation, and, most important of all, taxation... Mr Bush has right-wingers at every level of his administration with particular concentrations in the vice-president's office, the Office of Management and Budget, the Justice Department, and the White House counsel's office. ...There is only one thing more dangerous than associating with a vast right-wing conspiracy. That is to ignore it. [Editorial in The Economist 31.3.01]

A new pro-business climate is being fostered by Republican control of the White House. Congress abolished the new workplace safety rules and began working on an agenda which would cut back environmental and land use regulations, limit corporate liability for faulty products, rewrite rules protecting the privacy of patients' medical records, cut back red tape blocking new oil refineries and pipe lines, and open the Arctic National Wildlife Refuge in Alaska to oil drilling.

The arrival in the White House of President Bush, a former businessman surrounded by senior administration officials who were former business executives, has opened up new possibilities. Business made a substantial investment in the Republican Party at the last election. Corporations and executives contributed $146 million to Republican party committees, nearly twice that flowing to Democratic groups. Finance capital provided a "powerhouse of credit card companies, banks, auto companies and retail chains." The new finance bills are said to be the "best money can buy", according to Frank Torres, a lobbyist for Consumers' Union, and publisher of Consumer Reports magazine. [Guardian Weekly 15.3.01]

It is over a decade since the end of the cold war, and the US no longer has any check on its ideological or military dominance. Its brand of unbridled capitalism, with its insistence on deregulation and open borders for international companies, is now global orthodoxy... The winner, of course, is America.

The annual sales of General Motors are greater than the GDP of Thailand. Ford makes more money than Saudi Arabia. American business generates 85% of the revenue of the Internet. American television companies reap $8 billion from exporting TV shows... Even politics is Americanised, from the dominance of opinion polls to campaigns increasing emphasis on leaders' personalities.

Phyllis Bennis, of the Liberal Institute for Policy Studies, says resentment is not surprising: "We have the kind of global reach that earlier empires never dreamed of. The US now sees no reason to hold itself accountable. It's the law of pirates. When you have that much power, you are a law unto yourself. [Gay Alcorn, SMH 7.4.01]

Former ABC chief, Brian Johns said the ABC Board had been shamefully ineffectual and compliant as the Howard government implemented a policy of savage funding cuts, political assault and legislative manipulation against the national broadcaster. He said the government's policy of starving the ABC of extra funds for digital programming was a direct threat to its future in Australian broadcasting. Information will be the currency of the 21st century but broadcasting will be the social hinge of change. Yet our government's efforts, he said, have been directed at ensuring that the door of opportunity swings open as narrowly as possible. [AFR 30.3.01]

The Labor Party released a discussion paper and private member's bill designed to curb an explosion in individual doctors selling their practices to corporate entities. Labor's spokeswoman, Jenny Macklin, said the Opposition had serious concerns about the move towards large corporates buying up GP surgeries. This challenged the traditional values of medicine, and could cause a blow-out in Medicare costs.[Katharine Murphy, AFR 30.3.01]

The Australian Institute has conducted an exploratory study into the relationship between increasing commercialisation of higher education, and academic freedom, in the social sciences in Australian universities. Perceptions were found to be overwhelmingly negative; 92% of respondents reported they were concerned about academic freedom, and 73% reported a deterioration in the last four years. Most considered it a result of commercialisation:

The findings of this exploratory study suggest that academic freedom may be eroding, in the current "dash for cash" on which universities have embarked. Urgent action is needed to prevent further deterioration.[Pamela Kinnear, The Australian Institute, No.26, March 2001]

Professor David Beanland, head of the Australian Universities Quality Agency has been accused of failing to protect "academic whistleblowers" who tried to investigate the spending of a $3 million grant at the university he once headed, and also of failing to adhere to his own university's code of conduct. These cases were outlined by Associate Professor Kim Sawyer in a submission to the Senate enquiry into higher education. [Aban Contractor, SMH 4.4.01]

Politicians are handing business the key to the back door of the academy... A commercial fury is sweeping our campuses. There is now a Microsoft Chair of Computing, an FAI Insurance Chair of Finance, a Clay, Brick & Paver Chair in structural brickwork, the Aristocrat Chair of Gambling Research, and a BHP Chair of Steelmaking. There are now a hundred such deals in our universities. Dr. William De Maria, of the University of Queensland, suggested to the Senate Enquiry Into Higher Education, a packet of reforms to cope with the commercial mutation of our universities, involving a disinvestment of the business dollar from universities, and a return to exclusive public funding. He said there were no effective ethics regimes in place to ensure transparency and accountability in partnerships between businesses and universities. Universities have been described as being about the getting of knowledge to improve the human condition. But the getting of knowledge and the getting of the dollar are morally incompatible, he said. [Dr. W. De Maria, SMH 29.3.01. He is the author of Deadly Disclosure: Whistleblowing and the Ethical Meltdown of Australia, (Wakefield Press - no date)]

According to the Higher Education writer of the Sydney Morning Herald, Aban Contractor, the Vice-Chancellor of the University of Sydney, Professor Gavin Brown, has a salary package of at least $600,000, and includes a fully maintained house, two cars, a driver, overseas business trips for he and his wife, and a performance bonus. The contents of the package were revealed as university staff and students across the country were protesting against reduced funding, rising fees, overcrowded class, and staff cuts. The university has already been criticised by the NSW auditor-general, for not being open about his contract, and its Senate raised the matter in a letter to the Chancellor, Dame Leonie, who disputed the figures. Guidelines for a review of university governance are to be considered by the Senate, including the conferring of honorary degrees.[SMH 7.4.01]

An unprecedented exchange of letters between the Chancellor of Sydney University, Dame Leonie Kramer and its governing body, the Senate, has revealed irreconcilable differences between her and it. A group of six senate members, led by the Deputy Chancellor, Renata Kaldor, visited her offices to complain about her management style, and to ask her to announce her retirement immediately. This is two years before her term expires. She refused.

A separate letter, signed by 17 of the 22 Senate members, outlined widespread discontent in the Senate about the Auditor-General's report to Parliament, which criticised the University about the Vice-Chancellor's previous contract. The letter said that "in critically important matters... the Senate has felt excluded, ignored, overlooked or superficially consulted".[Aban Contractor & Gerard Noonan, SMH 6.4.01]

The practice of awarding honorary degrees to people who have not put in the years of academic slog to produce original research has become an increasingly common feature of university marketing and networking... The annual list now boasts more than the odd prime minister or archbishop. Record-breaking sportsmen and women, businessmen, and best-selling authors now collect them. A survey by the Herald found that 59 honorary doctorates were awarded last year in NSW. A spokeswoman for the National Tertiary Education Union, Dr. Julie Wells, said she understood why Ph.D. students felt the process devalued their work. [Aban Contractor, SMH 31.3.01]