Profit is Not a Dirty Word When it Generates Economic Growth

No. 429 February 2011

By Judith Sloan

27 December 2010

Most of us can remember that Sky Hooks classic Ego is not a Dirty Word with its strong beat and annoying tune.

If that song were to be released in 2010, I would change just one word: profit should replace ego.

This year was the year politicians on both sides of the fence lost the plot on the policy front. And underlying this loss of direction was a failure to understand the central role of profit-making in terms of generating high rates of economic growth and raising living standards.

The low point for policy discussion came towards the end of the year when Joe Hockey developed an almost Marxist-Leninist position on the Australian banks.

There can be no other explanation for his statement: "I want a social compact between our taxpayer-guaranteed banks, their shareholders and our government and parliament. This must define the relationship and include direction on competition, expansion, expectations of credit and savings, community service obligations, risks and rates."

My response: is he kidding? Direction on competition? Expectations of credit? Community service obligations?

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ENDS

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