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From the moment the Albanese government was elected, there has been an uneasy truce with the business community that has looked more like a shotgun marriage than a pair of star-crossed lovers.
Captains of industry have participated in the various summits the government has organised, smiled and then watched as it enacted legislation, such as changes to industrial relations laws in its first term, that business has quietly hated. But the 2026 federal budget marked a break point.
And the Business Council of Australia’s annual dinner this week shone a renewed spotlight on those frustrations. The BCA, which represents about 130 of Australia’s largest companies, is run by Bran Black, a mild-mannered former lawyer who also worked as chief of staff to Dominic Perrottet when he was NSW’s Liberal premier.
Black is not a culture warrior or hyper-partisan. He is far less likely to have a crack at the government in public than his predecessor, Jennifer Westacott.
In his speech at the dinner, Black told guests, including Anthony Albanese and Jim Chalmers, that “our living standards depend on our ability to grow the economy and create more prosperity. And the simple point is that Australia cannot tax, regulate or redistribute its way to higher living standards. We have to grow and we have to become more productive.”
That might not sound controversial, but for Black it’s the equivalent of a nine-alarm fire.
In a subsequent interview, Black went a little further (but not much), telling me that the BCA wanted to build consensus across business and government about the problems confronting the economy.
Among its particular bug bears are industrial relations laws allowing unions to bargain with multiple employers at once, so-called intractable bargaining, which forces enterprise bargaining agreements to be sorted out by the Fair Work Commission on a clause-by-clause basis. That works in the unions’ favour, Black says, because it means they end up better of overall without having to give away concessions to improve productivity in return for higher wages.
So, too, are tax changes to capital gains and negative gearing which Black argues increase the tax burden on people without growing the economic pie.
‘What business took away … is the message that government doesn’t value enterprise and commercial risk-taking.’
Australian Chamber of Commerce and Industry chief executive Andrew McKellar
“We’ve got problems with respect to our tax system,” he says. “It is fundamentally uncompetitive. We’ve got problems with our industrial relations system. We hear it internationally. We hear it domestically. It is just not competitive. We know our regulation is out of control, and that other countries are doing everything that they can to try and make their regulatory environment more competitive, and we are not doing enough just yet.”
Black acknowledges that Chalmers put in place a productivity package for business in the budget, for which the BCA had input, but “the tax components of the budget, we opposed and continue to oppose”.
And not everyone in the business community is prepared to be so mild any more. The Australian Chamber of Commerce and Industry is the largest business lobby in the country, representing small, medium and large enterprises. Its chief executive, Andrew McKellar, is fed up.
“There is not a relationship problem between small business and federal government,” McKellar tells me. “It’s a vision and strategy disconnect. That was encapsulated by the budget changes to capital gains tax and discretionary trusts.
“What business took away from those changes is the message that government doesn’t value enterprise and commercial risk-taking. What we saw is that the preferred model being put forward is [to] take the safe path, get a public sector job, join a union, consume, be silent, die.”
McKellar doesn’t mind using his elbows occasionally to get what he wants. But these comments, coming from the ACCI boss or any other business leader, are extraordinary. They go far beyond the usual “Labor is too close to the unions” critique and are among the strongest I’ve heard from any major lobby group.
When you aren’t being listened to, you may as well say what you really think.
Like Black, McKellar is particularly concerned about the growth in regulation and compliance costs for business, and the impact the changes to trusts and the capital gains tax discount will have on smaller businesses, many of which use trusts and make use of the CGT discount to help them into retirement.
Anthony Albanese spoke at the BCA’s dinner on Tuesday too, but talked about the budget mostly in macro terms: “Australia had a stronger economic growth, lower unemployment, stronger employment growth, and a stronger budget than most advanced economies.”
The prime minister said: “We’ve delivered the most ambitious tax reform package, the broadest productivity push, and the most net savings in a generation. We’re cutting compliance costs across the economy by $10.2 billion dollars a year.”
The BCA estimates as much as $40 billion a year in savings could be found by cutting regulation and red tape. That’s quite a gap.
But while you’d expect Albanese to talk up the government’s most recent budget, there was a brutal subtext to his speech which could be boiled down to this: “Play nice, or Pauline Hanson could be part of the next government.”
Whether in government or in some kind of coalition with the opposition, Hanson in government would mean huge cuts to immigration – exactly what the business community does not want, because it would add to labour shortages. And it would potentially damage Australia’s relationships with key regional trading partners.
Taking a step back from the day-to-day, Albanese said Australia was fortunate that “division, declinism and negativity haven’t overtaken us” and that “how we handle this global moment will have major consequences for our economy, our social harmony and our democracy. Government, business, unions and the community must meet this challenge together.”
There is a risk for Labor in continuing to discount the concerns of business, or make only minor tweaks to its budget tax changes. Australia does have a productivity problem and has had for years. Real wages, as opposed to nominal wages, are not growing fast enough; inflation, and therefore interest rates, keep rising; and the care economy, much of it government-funded, seemingly grows ever larger.
When he became opposition leader in 2019, Albanese dialled back the class warfare rhetoric of the Shorten opposition and said Labor would work with business to grow the economic pie, rather than just redistribute it. Fundamentally, however, business leaders believe redistribution is too much the focus of the Albanese government. While they can always get a meeting with a minister, they feel ignored.
Australia faces short and long-term economic challenges and the business community wants to be part of the solution. Albanese can’t afford to shake their hands and politely ignore them forever.
James Massola is chief political commentator.
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James Massola is Chief Political Commentator. He has previously been National AffairsEditor and South-East Asia Correspondent, and has won Quill and Kennedy awards and is the 2026 Press Gallery Journalist of the Year. Connect securely on Signal @jamesmassola.01Connect via X or email.
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