Peter Strong: What the “ruling class” can learn from small business

“Attention please: Passengers in business class please take note there is a person down the back of the plane who has paid for your privileged seat. Now fasten your credibility belts as we are about to take off.”

Why do more and more people vote for minority parties? Why can’t we predict anymore how people will vote? Why are the two major parties struggling? What is going on?

I believe the answer lies in the “we know better” and “we are better” attitudes from some of those in charge (or who think they are in charge). The majority of normal people are tired of being treated as second rate; as though our opinions are not valuable or that we are not as smart as the few who run the place.

The latest example that confirms this view is the fact that 23 public servants from the Department of Foreign Affairs and Trade (DFAT) recently flew business class to Paris to attend a workshop to discuss how to save money. Yes, you read that correctly. That happened.

I am not public servant bashing. The performance of most public servants is excellent; particularly the staff of the Australian Competition and Consumer Commission, the Australian Tax Office and the Fair Work Ombudsman. But there is a small pseudo “ruling class” of people – not all people, just some – from the corporate world; from the public sector; from politics; from unions; from social welfare; and from academia, who could do with coming down to our level.

These people like to make decisions for the rest of us. While centralised decision making has a place with policies like interest rates, marriage laws or welfare payments, there are many other policies where the rest of us should be shown more respect and be better involved. This includes vocational training, workplace relations, banking, taxation, welfare and more.

The ruling class seems to consist of: three big unions who partner with about eight big businesses, and between them rule their industry sectors; the four big banks; three federal government agencies; two large social welfare groups; ideologues in some big universities; and the odd pompous politician (it is my experience that most politicians are not pompous).

There is no small business person or worker who believes they are part of the ruling class. No newsagent, owner driver, bookkeeper, accountant, hairdresser or small retailer sees themselves as a ruler. Not one.

The fact is that it isn’t just DFAT people who get to travel in upper class. The chairman’s lounge of airlines and the business class lounges are mainly the realms of those who do not pay their own travel costs. Their travel is paid for by shareholders, by their members, or by taxpayers who don’t get access to these luxuries.

Small business people account for much of the taxes that pay for this upper class travel. We sit down the back of the plane and watch the ruling class using our hard work and taxes to thumb their noses at those who pay for their seats.

For the DFAT trip in question, $215,000 of taxpayers’ funds was spent just on the airfares. How much effort is required to earn the taxes that paid for that trip? Using the 30% company tax rate as a base, that $215,000 equals the combined pre-tax company profit of several businesses at around $700,000; assuming a combined turnover of between $5 million to $8 million, depending on the industry and size of the business (figures are estimates based on ATO benchmarks).

So those airfares, and the airfares of big business chief executives and the like, take a lot of work and effort from others who don’t get to enjoy the high quality travel.

It’s also interesting that Nick Xenophon, who is very popular indeed, at least in South Australia, travels economy even though he can travel business class. He gets it. But he was recently criticised by the Business Council of Australia (which likely travels business class) for not understanding its tax needs. Xenophon is popular and big businesses are not; most big businesses are fine corporate citizens but the few who rule the roost give the rest a bad name.

You shouldn’t get to force a change in tax rates (or anything) by demanding it through the use of money and muscle. Real change comes from people being involved and understanding the benefits by examining the information provided to them; not by being told they are stupid – they aren’t.

So here’s a hint for those in power – include others. Disempower the big few. Start a program of local empowerment for taxpaying small business through local economic development. Then listen to the other politicians, industry groups and the like who understand the real world, effective communications, and change.

Business class travel may be your right, but for the sake of propriety show respect to those who pay for your privilege.