[WHO] Simon McKeon, Australian of the Year and bank executive chairman
[WHAT] The Occupy movement has valid concerns, and business needs to change
[HOW] Business should increase its community involvement; government should boost education
The Occupy movement that has spread from a park near Wall Street to hundreds of cities around the world has valid, fundamental grievances. It does not need to have a list of policy prescriptions - the movement is the message. It is an expression of a smouldering sentiment that the system we have evolved to facilitate freedom, opportunity and justice is instead delivering unfairness. A corollary is that the tacit social contract has broken down; it no longer holds that if you study hard and work hard there will be an opportunity for you to prosper, to explore your potential in a world where a key determinant of the quality of existence is where you happen to be born.
At its core, the Occupy movement is about equality of opportunity. This is not an ideological position. It is an unassailable principle that has nothing to do with the hackneyed, misleading political language of left and right. And it is one worthy of support, no matter what your view might be about the comportment of the protesters, or of the authorities and police who have forcibly removed them from various places, including Melbourne and Sydney.
Simon McKeon, Australian of the Year and executive chairman in Victoria of Macquarie Group, is here in The Zone to discuss the genesis and implications of the Occupy movement. He is the first repeat guest in The Zone; he was here last year upon his appointment as chairman of the CSIRO. As the full transcript of our interview, as well as a short video (both at theage.com.au/opinion/the-zone) show, he shares some of the concerns behind the movement. He remains a steadfast believer in individual freedom and markets, and clearly feels something important is happening.
McKeon sees the situation against the historic backdrop of a massive transfer of wealth from the West to the East. He also believes people are rightly concerned about what has happened since the global financial crisis in 2008, a near-catastrophic collapse sparked by the behaviour of Wall Street banks and a failure by US regulators to do other than generate unsustainable bubbles in the prices of homes and financial instruments.
''[The Occupy people are saying] we are very, very, very grumpy about the fact that at the same time as Western governments are tightening their belts because of the difficult outlook, they have been pump-priming the corporate sector because of all the trouble it got into over these past few years.
''It's just not fair for the ordinary citizen to have to stomach, and something has got to change because we seem to be paying a price for something we didn't do.''
McKeon, who has used his time as Australian of the Year to promote corporate philanthropy, argues business has only itself to blame for the disdain in which it is now being so publicly held. It makes him sad, as he sees so much good work being done by so many companies, and believes that with marginal effort business could turn critics into advocates.
''As I said many, many times this year - and [Harvard Business School Professor] Michael Porter, the world's foremost business academic, makes the point much more profoundly - business has been on the nose for a long time. Survey after survey after survey asks all sorts of different questions but the results are essentially the same. The community as a whole is not convinced that business operates in the way that it ought.
''My message has been a very broad one. It is simply that business itself, particularly larger businesses, are massive institutions with all sorts of resources.
''There are many, many opportunities that are also fundamentally in the company's interests, not as starkly obvious as giving away 1 per cent of net profit after tax, but using the resources of the company to be directly connected to community need, whether it's employee volunteering, whether it is putting some departments to work in the times of the year when they are not operating at peak level, whether it's actually just a bit of public generosity from time to time from these very well-paid CEOs.''
Unemployment in parts of Europe is around 20 per cent, with youth jobless rates double that. The issues occupying the occupiers are far more acute elsewhere in the world than they are in Australia, yet the pressures clearly do exist here.
They are evident, for example, in the sharemarket, where there are concerns about executive salaries continuing to far outstrip average wage rises, notwithstanding profits or share prices. The supposed link between executive pay and performance appears more rhetorical than real.
In recent days, sufficient shareholders in several big public companies have rejected boards' remuneration reports, triggering a newly introduced procedure that would cause a spill of board positions, should a similar vote occur next year.
The sentiment driving the Occupy movement throughout the industrialised world has been fuelled by facts such as these, which refer to US figures but are reflected in the broad in many places:
■Unemployment has not been higher since the Great Depression.
■Corporate profits are at record highs, financially and as a proportion of the economy.
■Wages are at an all-time low as a percentage of the economy.
■Inequality in wealth and income is close to an all-time high.
■The earners with the highest salaries get a higher part of national income than they have for about 90 years.
The protests are broad-based. It is unjust to describe them as some sort of socialist attack on capitalism. Consider this from The Economist, the world's foremost pro free market publication: ''Even if the protests are small and muddled, it is dangerous to dismiss the broader rage that exists across the West. There are legitimate and deep-seated grievances.''
Or this from The New York Times, also hardly a Trotskyite newspaper: ''On one level, the protesters, most of them young, are giving voice to a generation of lost opportunity. The initial outrage has been compounded by bailouts and by elected officials' hunger for campaign cash from Wall Street, a toxic combination that has reaffirmed the economic and political power of banks and bankers, while ordinary Americans suffer.''
Simon McKeon believes the protesters have overwhelming community support to voice their anger, but not necessarily to remain for extended periods in public spaces.
''The protesters really ought to have known deep down that they were on borrowed time … As to the actual way in which they were driven out, as a Melburnian I was shattered to see those images broadcast worldwide with police horses stomping in the close vicinity of humans. That was really shocking and confronting and I'm glad the fallout was limited to what it was in terms of physical injury.''
He argues that the only long-term solution to the erosion of workers' relative financial welfare is education and training, given the surging competition from developing economies. ''We have to invest in training and education, and we kid ourselves that we do. We actually underspend the OECD average by 25 per cent in education.
''We need an education revolution, but actually it's not happening. We are a very lucky country; we ought to be able to afford the cost of that extra training.''
There is abundant evidence the greatest gains in freedom and wealth in modern history have been delivered by democracy and markets. But there can be no prosperous Wall, Collins or Pitt streets without healthy backstreets.
Overall, the Occupy movement is not about breaking down the system, it is about breaking into and adjusting a system that is no longer providing a fair go. It is about equality of opportunity, rather than equality of outcome, and ought to be embraced as a collective opportunity for us to ask the paramount ethical question: is this right?
Michael Short @'The Age'
