What about sovereign risk? was a question asked of a guest speaker at a lunch the blog recently attended. What about sovereign risk indeed the blog muttered under its breath.

On the tram on the way home after the lunch the blog, however, got to thinking about what other glib defences PR advisors would use to characterise policies powerful interests opposed; what might get the powerful interests agitated in the future if a change of government occurred; and, what framing the advisors would recommend in such situations.

The lunchtime question was simply referring to a change of policy not sovereign risk. As the blog has written before, the way the phrase sovereign risk is used in Australia is nothing to do with what the term actually means but instead is all about a lazy way to oppose policies someone doesn’t like. For instance miners – faced with a resource tax – alternate between saying they will relocate to Africa or Mongolia and that the proposal is about sovereign risk. Indeed, using it in the way Australian businesses, their lobbyists and PR advisors do would mean that 18th and 19th century UK parliamentary attempts to abolish child labour in mines would also fail this perverted version of the sovereign risk test.

So, what other things might inspire business lobbyist furore and hyperbole? For instance, readers will remember that when companies were required to disclose executive salary levels there were dire warnings about how it would encourage kidnappers. Yet so far there have been no kidnappings of CEOs or their families even if Board remuneration committees have facilitated CEOs and senior managers kidnapping humongous piles of money from shareholders. There might be more along those lines.

But some other examples come to mind. What if the Australian Government was to try to legislate that gender pay gaps must be declared by large companies? What if companies were required to report the CEO’s pay ratio in comparison with the average salary of a company’s workforce or the living wage?

Imagine the uproar from the Business Council, the Australian Institute of Company Directors, other business clubs and The Australian Financial Review if the proposal was made by the ALP before the next election. Impractical, endangering international competitiveness, the politics of envy, socialistic nonsense, unnecessary and excessively onerous regulation, driving talented Australian CEOs’ overseas would be just some of the responses.

Yet think for a moment about the proposals, in particular the concept of a living wage as a benchmark which gives away the fact that this is not a fantasy, but rather a practical proposal by the UK May Tory Government in response to community outrage about out of control CEO remuneration and growing inequality.

There are some other Tory innovations which would be useful here. UK Ministers need to make their diary appointments public – something our former Attorney General and now UK High Commissioner, George Brandis, spent large quantities of taxpayer funds to keep secret. Perhaps he will come back a convert? Senior civil servants need to declare their meetings with lobby groups and business including details of any hospitality they accept. There is also an appointments committee which vets former Ministers, MPs, civil servants and others before they accept post-retirement jobs although this system is, to say, the least, a bit of a joke.

There is also a growing belief that the honours systems ought to be overhauled to avoid knighthoods, damehoods and other gongs going to people who don’t pay their taxes or pay less in tax than they do in party donations.

Needless to say they are a Tory Government and, like the Blair Governments, only go so far in terms of restricting the gravy and honours trains for CEOs, donors, investment banks, accounting firms, consultants and others and their record in these areas is as dire as you would expect.

The most egregious lack of restrictions are in terms of consultants – particularly the Big Four accounting firms – which make billions from offering advice to governments and agencies whether the advice is good or not. A similar situation applies in Australia where the Big Four get lucrative contracts as governments sack skilled public servants who could have done the work more cheaply and more effectively.

A typical UK example – which the blog noted from Private Eye – was the 56 billion pound HS2 fast rail project. The Eye found under FOI laws that the firms were providing 31 separate consultancy contracts, “sometimes with glaring conflicts of interest.” The best example in The Eye investigation was when HS2 asked EY to check out a 1.4 billion pound contract being awarded to Carillion – an outsourcing company which recently went spectacularly belly up after getting a clean bill of health from a KPMG audit. EY gave it a tick for the HS2 contract even after Carrillion announced a massive write-down and profit warning.

By the way, Private Eye’s accounting correspondent, Richard Brooks, who is the source of much information on UK consulting gravy trains and accounting firm sins, recently published a magnificent book on the accounting profession – Bean Counters: The triumph of the accountants and how they broke capitalism. The book provides many more examples of spectacular Big Four failures, greed, tax evasion facilitation – all in all a read which horrifies, infuriates and illuminates.

At least the accounting firms don’t resort to threats of sovereign risk, other than in representing their clients, when anyone tries to rein in their depredations and conflicts. But they do resort to a different mantra – ‘too big to fail.’ What PR framing they will use as they are pressured to separate auditing from other services – a policy gathering growing support around the world – is going to be quite another matter. So far the best efforts have revolved around saying their relationships with clients ‘enhance’ the audit function rather than hampering it. Just don’t mention Enron to an accountant who tells you that tale.