Investment banker quits Australian politics

Posted by in Economics

Reports on the resignation of New South Wales premier Mike Baird this week tell two stories. The first clarifies the corporate agenda for big-ticket political change, the second is on the nature of Australian political life today.

NSW under Baird, an ex-investment banker, led the push to privatise state assets. Ports and power were sold off to invest in highways, hospitals and schools. Put another way, assets which helped the state’s long term income will now be milked by private monopolies for short term profit, transferring costs to future users and funders of state services. As the Australian Financial Review newspaper put it today, “Investment bankers need to find a new best friend”.

Baird cited the personal cost of political life, a reference to the crazy hours required to stay at the front in politics and the polls. No need to feel sorry for him though – the Financial Review reports “the outgoing premier has a rich choice of career options”. His approach typified the short term agenda of today’s Australian politicians – the constant search for appealing new announcables (media releases on schools etc), funded by poor long term decisions.

Baird’s most famous proposal was reduced corporate tax, funded by redistributing government income collection to take a greater share from the poor via a 15% GST. Fortunately, a GST rise was ruled out by the federal government as too risky for now in the polls and elections.