The Independents will herald a return to rural power: Gottliebsen

Prepare for an Australia that we have not seen since the 1950s and 1960s when Sir John ‘Black Jack’ McEwen dominated so many areas of government under the prime-ministerships of Menzies, Holt and Gorton.

The ballot box may still give this election to one of the parties (if you count the Greens as a Labor vote), but the most likely outcome is that the three independents, Messrs Katter, Oakeshott, and Windsor, will decide who will be Prime Minister.

The first lesson both Julia Gillard and Tony Abbott have to learn is that the spin that their media teams think up each day will not influence these independents. They, like the rest of Australia, want straight talking – McEwen style.

McEwen is best known for his high tariff policies and we are not going back to that. But behind McEwen was a deep sense of economic nationalism with a rural bias. McEwen applied this underlying principle to the circumstances of his day, which are different to 2010. If they have the chance, Katter, Oakeshott, and Windsor will apply a version of McEwenism to today’s circumstances. Major changes in Australian politics will emerge – many for the better.

The three independents want to see thriving rural regional centres with higher populations. Bob Katter believes that the way to achieve this is via the Bradfield scheme, which would divert the Queensland waters inland. That proposal will be looked at again but in 2010 increasing regional prosperity is linked to the national broadband network.

People in regional areas will be able to duplicate personal contact with those who live in capital cities and the world. Many jobs will be able to be performed remotely.

Julia Gillard is much better placed to satisfy the needs of the three independents on broadband, but power is so close for the Coalition that the Abbott team will be asking former Optus executive and member for Bradfield, Paul Fletcher, to come up with a broadband policy that puts Abbott in the race to be Prime Minister.

Australia has a policy of approving most takeovers, although the Foreign Investment Review Board and others have not been happy about arms of the Chinese government taking control of key Australian companies.

We are going to see a much more nationalistic approach to takeovers and Katter, Oakeshott and Windsor will introduce the Coalition and the ALP to a new way of thinking. In turn that must be passed onto the FIRB.

My view has always been that the current takeover practices can sometimes lower long-term returns for shareholders. Shares are valued by institutions on the basis of the short-term outlook. Then if someone makes a bid offering a 20 per cent premium on those short-term values, the institutions want to sell.

If it’s a share exchange offer from an Australian company it does not matter as much as a cash offer from a foreign group. The best way to illustrate the game is the BHP Billiton offer for PotashCorp in Canada. The ‘foreign’ BHP is trying to steal the Canadian company with a low cash offer. If BHP succeeds it will be the buy of a lifetime.

Theoretically if something like that happened in Australia on the watch of Katter, Oakeshott and Windsor, the bid would be blocked because potash is a key rural raw material. Before merchant bankers drum up a bid for Elders, Foster’s and other national brands with a rural link they need to see just how the Canberra scene pans out.

And watch out Woolworths and Coles. Tony Abbott will be on the back foot in broadband and takeovers, but when it comes to protecting farmers against Woolworths and Coles he already has in place the required policy – the Abbott plan is to extend the fair contracts legislation designed for consumers to small businesses. This will change the whole nature of Australian business and no group will gain greater benefits than the farmers. Importing food against the interests of Australian farmers will become very difficult.

Fresh produce is a key component of supermarket profits. Coles and Woolworths have every reason to be wary of the independents if the penny drops for Tony Abbott.

There will be many other situations where the principles of Sir John McEwen can be applied to 21st century Australia. Messrs Katter, Oakeshott, and Windsor are not fans of the National Party because, in their view, the Nationals abandoned the McEwen principles for power. That gives Gillard a great chance, especially if she were to duplicate the Abbott policy on fair contracts.

This article first appeared on Business Spectator.