As part of Crikey‘s ongoing 15th birthday celebrations, we are examining the relationship between power and media and how it has changed over the last decade and a half. Today, Crikey business editor Paddy Manning explores the changing relationship between business and the journalists that cover it. 

After three decades of privatisation, deregulation and tax-cutting, the balance of power between the government and corporate Australia has shifted.

The real power now, arguably, is in the boardrooms of major corporates here and overseas — the tight directors’ club who hire and fire CEOs, shape strategy and guide business lobbies.

Not that wealth is power: the peak of the financial crisis was a stark reminder that ultimately it is sovereign governments that raise the revenue to fund bailouts, have the credit rating to underpin borrowings, and write the regulations that shape markets.

The GFC was enough to convince then PM Kevin Rudd that the 30-year neoliberal project had failed, as he declared a little prematurely in this Monthly essay.

As Rudd soon found, to his distress, there is a difference having the power and using it.

There is no better example of business versus state power than the mining tax debate: a few well-spun half-truths (and the odd flagrant lie) propagated by the Minerals Council and others in a $20 million ad campaign not only toppled a spooked prime minister but saved the industry billions and served as a warning to other countries thinking of following suit.

The new, weaker mining tax was designed in private talks with the country’s three biggest miners — BHP, Rio Tinto and Glencore.

Government has become better at ceding power than wielding it, and there are plenty of current examples where a handful of major corporates dominate important public policy debates:

  • The big four banks, which control 80% of our investments, strong-arm the government into watering down the Future of Financial Advice (FoFA) laws designed to prohibit conflicted financial advice and prevent mis-selling — causing consumers untold misery — while enforcing staff and budget cuts that, again, nobble the corporate regulator’s ability to do the job
  • A dominant Telstra holds all the trump cards in re-negotiations with the government over the national broadband network and effectively decides the shape and speed of an NBN rollout that will suit its shareholders
  • Encouraged by a government that does not have the numbers to pass the relevant legislation, the three big energy industry players, AGL, Origin and Energy Australia, simply refuse to comply with the Renewable Energy Target, thumbing their nose at Parliament and the law
  • When the Business Council warns against measures to tax multinationals, Treasurer Joe Hockey duly caves — notwithstanding all the fine words spoken at last year’s G20 in Brisbane, and despite a collapse in public revenues — while axing hundreds of tax officers who might enforce the law.

Who is calling the shots, exactly? Not the politicians, it seems, who are too intimidated to stand up to big business. The result? It is more important than ever that journalists are able to hold business to account.

Yet in practice — as Crikey canvassed extensively in this five-part series at the beginning of the year — it is getting harder and rarer as traditional media business models collapse, industry spin grows more pervasive, and freedom of speech is curtailed in legislatures and courts.

As resigning UK Daily Telegraph journalist Peter Oborne exposed in this stunning piece, today’s enfeebled media organisations — however venerable the masthead — cannot always be counted on to uphold independence and withstand pressure from powerful corporates. We don’t need to look offshore for examples.

Sometimes business uses ad spend overtly, to discipline the media, as when Qantas withheld advertising from The Sydney Morning Herald and The Age last year, making sure the story got a good run (with quotes) in The Australian.

The story aired the company’s concerns about the reporting of columnist and recent Gold Walkley-Award winner Adele Ferguson (who had called for the resignation of CEO Alan Joyce) and aviation correspondent Matt O’Sullivan, who was then writing a book about how the airline had become a “national liability”.

The Qantas move attracted questionable publicity, including on Crikey blog Plane Talking.

Other times, business prefers to work behind the scenes, going over the journalist’s head.

At the recent Sydney launch of O’Sullivan’s excellent book Mayday: How warring egos forced Qantas off course, guest speaker and SMH business columnist Michael West recalled for the audience how, when business editor in 2010, he had to put his own job on the line to protect O’Sullivan.

O’Sullivan was determinedly reporting on the woes of Jetstar Pacific in Vietnam, where two whistleblowers with safety concerns had triggered a regulatory inquiry.

Qantas took its concerns straight to then-editor-in-chief, Peter Fray, who queried West about O’Sullivan.

West told Fray O’Sullivan’s reporting was impeccable, adding “if he goes, I go”. It wasn’t necessary, of course — Fray stood up for his reporter — but a different pair of editors could have easily wilted under pressure.

At the risk of generalising, coverage of politics is often negative, verging on cynical, driven by personality contests and party tactics, to the neglect of policy-making and consensus.

Coverage of business by contrast is too often positive and credulous: lies by and large are forgiven, disasters skated over, blame laid elsewhere.

Business leaders are not public figures, after all, they are just trying to make a buck, for themselves and their shareholders. Somehow this desire to maximise profit is ennobling: every action is understood as another gesture of the invisible hand, however grasping.

Journalists, like politicians, are in thrall of business leaders. The cumulative effect is corrosive: business leaders, exercising real power on matters of vital public importance, are not held to account.