Keeping Up The Pressure

The Age

Friday January 2, 2009

KATHARINE MURPHY

ANDREW McKellar is a fellow you might have glimpsed on television last year talking about the car industry, which emerges from all the challenges of 2008 as the outright winner under the first federal Labor government in more than a decade.

McKellar is a mild-mannered, long-term Canberra insider, and the man the car industry pays to be its eyes and ears in the national capital. On any measure, he has done a good job, to the tune of $6 billion, for the sector.

This transaction is not furtive, or intrinsically undemocratic, or even particularly complicated. McKellar is the chief executive of the Federal Chamber of Automotive Industries. In a democracy, special interests want their piece of the pie - some deploy tricks and subterfuge, or grease the wheels with donations. Some lay on the charm, others thunder from the rooftops. The car industry just deploys what it has: the gorilla-like influence gained by its strategic political and economic muscle (workers, jobs, industries).

The Rudd Government came to office on the promise of making such influence peddling more transparent. But whatever accountability is imposed does not much alter the fundamentals: interest groups run campaigns, and governments are always sensitive to criticism.

This is not a government instinctively comfortable with well-funded, well-organised third-party lobbying campaigns - this is a government that likes to be firmly in control of the 24-hour news cycle. For now, though, the new Rudd political elite, and the special interests that circle it - industry associations, business people who dabble in politics, unions, lobbyists - are still working each other out, like players at a high stakes poker game, watching to learn the bluffs and quirks of the opponents.

Rudd came to office on a promise of no punitive blood-letting. Thus advocates with a tendency towards outspokenness or independence, or burdened by inconvenient connections to the previous government, have been absorbed into the new Canberra in a manner ranging from gritted teeth tolerance, to outright co-option. "No one is on the outer; everyone gets an appointment," quips one minister. "Some people might just have to wait a bit longer."

That said, the dawn of Kevinism has been a boon for some, a challenge for others. Two major Australian companies, Telstra and oil and gas firm Woodside, learned this year just how intolerant the PM could be when provoked. Telstra found itself out in the cold when it played too clever by half on the $4.7 billion tender for the national broadband network, only to be dumped from the bidding process - which must have come as a shock to an organisation that knows no strategy other than institutionalised, unsubtle bullying of politicians.

(Canberra this summer is dining out on Telstra anecdotes, including a possibly apocryphal tale of bickering between chief executive Sol Trujillo and chairman Donald McGauchie over whether to join the broadband tender, resulting in Trujillo departing the country, leaving McGauchie to explain the debacle.)

Woodside's outspoken chief executive, Don Voelte, who did not mince words on what he saw as deficiencies in the Government's emissions trading scheme, infuriated the Prime Minister, much to the amusement of the company's competitors, who ran a more low-key effort.

Rudd may not have been amused, but Woodside, like the car industry, came up trumps in the end, winning protection when the scheme starts. The art of influence is not, ultimately, about winning friends, but getting results.

The Australian Education Union copped a swift kick in the teeth for its unrelenting advocacy on the part of teachers resisting the Government's education "revolution". The Australian Medical Association also learned early that the new Government did not respond well to lectures from the sidelines. Outspoken AMA president Rosanna Capolingua found herself quickly in bad odour over her critiques on issues such as the Northern Territory intervention and national health reform - a development that prompted the organisation to hire Francis Sullivan, a Labor-connected natural-born diplomat with a long track record in health advocacy. But Capolingua herself seems unperturbed, speaking out on a range of issues.

Other major industry associations found themselves the object of Julia Gillard's precision-instrument attention. The Deputy Prime Minister had a magician's trick to pull off in 12 months - rewrite the industrial laws without prompting war from either business or unions. The feedback from some associations that are hardline on the subject of labour market deregulation contains nothing but praise for Gillard. Ideological differences remain, of course, but some hard-bitten types are close to starry-eyed about her backroom, no bulldust, exhaustive-on-the-detail approach to working the changes through. "Much smarter than her boss," one representative from the employer faction confided recently.

The business organisation most closely aligned with the Howard government, the Australian Chamber of Commerce and Industry, has neutralised some of the previous poison, it seems. "We tolerate them," observes a minister in flat monotone.

And there have been winners of course. Several ministers were for a time in the thrall of National Australia Bank would-be chief executive Ahmed Fahour (who graciously introduced himself to fellow participants at Rudd's 2020 Summit by saying, "Hi, I'm Ahmed, I work at a bank"). WA mining entrepreneur Andrew Forrest cared about Aboriginal employment, which helped build a bridge with a prime minister wanting practical action to augment the symbolism of his apology to Australia's stolen generations.

Trucking magnate Lindsay Fox bobbed up back in Canberra, accompanied by the tousle-haired former union boss Bill Kelty, and found himself quickly appointed to Rudd's APEC-related business advisory group alongside impeccably connected Melbourne lawyer John Denton.

Businessman Sir Rod Eddington was simultaneously everywhere and nowhere. Everywhere where Rudd needed him, including nowhere, closeted behind closed doors, helping the Government bring forward (well sort of anyway) its multibillion-dollar infrastructure program.

The Australian Industry Group's Heather Ridout was simply everywhere, on every advisory body known to personkind, and still found time to be gracious about it. (Although the same can't be said of some of her employer-group colleagues, who mutter enviously, and of course anonymously, about selling out or unseemly self-promotion or some other evil associated with co-option.)

Lots of executives from the resources industry, and the organisations that represent their interests, also go into 2009 with credit in the charm bank in Canberra for keeping their advocacy nice during the emissions trading debate. BHP government relations executive Bernie Delaney is mentioned positively in dispatches, as is his boss, Marius Kloppers (compared favourably with Woodside's Voelte). Kloppers travelled to Canberra when needed and kept this out of the newspapers.

Mitch Hooke and his team at the Minerals Council were apparently smart enough to target offices where they were welcome. Alcoa's Paula Benson also made an impression - and not just because she happens to be married to Communications Minister Stephen Conroy.

Qantas, as usual, stitched up the new government in a matter of moments and extracted a win on foreign ownership restrictions. Then it pinched Kevin Rudd's outgoing chief of staff, David Epstein.

This year will be a big one for universities, with two large reviews requiring billions at a time when the Government is sliding towards a deficit.

Vice-chancellors are this summer at charm school in preparation for the pre-budget parliamentary session. Ian Chubb, from the Australian National University, says he would have liked the $6.2 billion Andrew McKellar helped bag for the car industry, but as a supporter of manufacturing, he doesn't gripe.

"I don't begrudge the car industry," he says. "It's just a shame we've been put in the queue at a time when things are against us. I know it's going to get tough in Australia, and I won't be cross if we don't get the full package."

But before Labor starts congratulating itself, Chubb adds a rider. "I wouldn't like the Government to lose sight of its objectives. I think it's important that we get full funding for research because we have been chronically underfunded for some time. We need to do what we can, because a bit will start the ball rolling and we need some priorities to shape the sector and stop the drift we are in at the moment."

Katharine Murphy is national affairs correspondent.