Australians should encourage their leaders – in government, business and the general community – to demonstrate understanding, courage and a social sensibility, Australian Competition and Consumer Commission Chairman, Mr Graeme Samuel, said today.
"The economic imperatives that we face must be understood," Mr Samuel said while delivering the 2003 Alfred Deakin Lecture in Melbourne. "Courage must be shown if we are to embrace a sustainable and robust program of economic reform that will benefit the community as a whole.
"And we require of governments – and business – a social sensibility to ensure that, while the reform program we choose delivers the economic efficiency we need, we also create a fairer and more cohesive Australia.
"The challenge is about responding to the concerns of all Australians without jeopardising the path of growth and change which lays the foundations of wealth for the whole of society.
"The challenge is to ensure social and economic good grow in tandem. This is a challenge to which governments – and business – must rise".
Mr Samuel said that Australia needed to "think smarter about what range of policies will give us the most prosperity with the most fairness and, where they are at odds, the policies that will strike the best balance.
"Helping people to adjust to change must become an integral part of reform. It is imperative not just on moral and equity grounds, but to help communities feel more optimistic about their ability to adapt to in a world where ongoing change is part of life. Perhaps, most important of all, sensible change management ensures that people do not feel that they have been forgotten or discarded by the rest of the community".
Turning to the role of business, Mr Samuel noted that increasingly Australian business had been exhorted to assume a greater level of corporate social responsibility.
However he preferred the term corporate social sensibility – socially sensitive and sensible policy when businesses conducted their affairs.
"Corporate social responsibility is a business imperative as well as an altruistic nicety. It is not so much about cheques as about attitudes, social involvement and sensible, socially responsive business management.
"For business, as a full participant in the Australian community, has its role and responsibilities defined by more than public relations jargon".
Mr Samuel warned that a business community that abjures social sensitivity ran a risk that governments would intervene to address the community's needs through regulatory requirements.
"This is the nature of the government beast, and is not without significant cost".
Mr Samuel said he was not arguing that business decisions should be guided entirely, or even significantly, by social considerations.
"Indeed the capacity of business to generate national wealth derives significantly from its ability to respond quickly to market conditions. I am therefore very cautious about embracing notions of triple bottom line reporting or ethical investment guidelines.
"It seems to me that these notions run the risk of providing simplistic legal challenges for corporate boards and management that inevitably will lead to a diversion from fundamental principles of good business management and to a box-ticking mentality".
Mr Samuel said there were three key themes that emerged in discussions about how to best implement and manage economic reform:
- the fact that change cannot be avoided;
- that there were few straightforward answers; and
- that it was important to address fairness, as well as economic prosperity, when considering economic reform.
"Australia must continue to make progress in established reform areas and ensure the right processes are in place for identifying, assessing and managing any future reform processes", he said. "First, reforms need to be identified in a transparent way. Governments must also commit to implementing any new reforms with full and explicit consultation. And last, but not least, mechanisms have to be in place that maintain the momentum of reform and manage the effects of change.
"This approach values the fiscal/human nexus by placing the focus of economic reform where it should be – on human beings".