Put people power over the bureaucrats – The Australian Financial Review

Posted: October 20, 2019 at 9:15 am


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When business leaders spend more resources designing products that meet regulatory whims rather than the needs of the people, we have a problem. When regulators feel as if they need to issue guidance on how boardroom notes are taken, then we have gone past any reasonable understanding of consumer protection.

So is it any surprise that in the United States, the most profitable investment a firm can make is in lobbying? Jesse Norman, the British MP and author, recently pointed out that some lobbying efforts in the US had a return on investment of 1200 per cent.

Too often, our challenges seem intractable because the argument is framed as being between the candle and the darkness when the answer is the light globe

Which makes you wonder how much of this is a driver of the lower productivity we have faced in the post-GFC era. Those people who have traditionally allocated capital to areas of our economy that could most benefit from it have been spending increasing amounts of time dealing with legal requirements, such as how boardroom notes are taken, rather than new products or services.

The director and officer liability insurance market is a great example of innovation-killing lawfare. Overseas litigation funders, who in many cases do in Australia what they cannot do at home, are getting returns in this country of close to 1000 per cent. The number of shareholder class actions has quintupled over the last decade and the cost of director and officer liability insurance has risen 500 per cent over the past two years.

Hard-working Australians are seeing their investment returns cut. More seriously, over the long term, businesses in Australia are becoming more cautious and less innovative. The losers are all of us: investors, consumers and Australians.

This Liberal government knows that if we are to overcome the challenges and seize the opportunities of this century, innovation must be enabled, not disabled. Too often, our challenges seem intractable because the argument is framed as being between the candle and the darkness when the answer is the light globe.

We need to keep incentivising people in business to take well-informed risks without fear of legal regulatory retribution. This is how we will overcome the challenges of climate change, productivity, creation of meaningful employment, education and the many other opportunities before us.

So as the Liberal party approaches the last quarter of its first century, we are reminded that the only way to a fair country is through freedom, for no one person knows the path of happiness for every person; that care and compassion comes not from the generosity of the state but from those who know and love us; that historys surest pathway to serfdom is by replacing equal rights with equality of outcome; and this is the only way anyone has created a just society.

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Put people power over the bureaucrats - The Australian Financial Review

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October 20th, 2019 at 9:15 am