Following an online interview with Joe Kelly of The Australian, that paper published a front-page story by Kelly on 4 March titled ‘Our nation stuck in reverse’. My remarks were also used by the paper for an op ed under the heading ‘IR, energy bungling put brakes on growth’.
These can be googled and read elsewhere. I thought I’d just add here some content that got left out, but still seems worth saying.
The article details the dimensions of policy failure in two key areas of our economy: energy and industrial relations. Once upon a time, our strong comparative advantage in low-cost, reliable energy helped offset the self-imposed disadvantage of our centrally prescriptive and costly system of workplace regulation. But policy actions over the past decade have seen us forfeit the former while exacerbating the latter. This is bad not only for industry competitiveness, but also for economic growth and the living standards of Australians.
When it comes to (real) reform, we know what should be done, and we know what could be done. But actually getting it done is another matter.
On leaving the Productivity Commission back in 2012, I compiled a list of reforms from its past inquiries that still warranted implementing (‘The To Do List’). There were quite a lot. Five years later, the Commission produced an updated list under the title ‘Shifting the Dial’. This had over 20 recommendations as I recall. The Commission observed last year, when doing its latest productivity review, that little had been accomplished. I’d go further and say that if the Dial has shifted at all, it’s shifted in the wrong direction.
So why the failure to achieve reforms that are generally recognised as beneficial? The age-old problem of course is that inevitably they will be opposed by interests who benefit from the status quo. That hasn’t stopped reform in the past, but it seems to be a show-stopper these days.
Blaming the Senate doesn’t cut it in my view. Sure the cross bench is bigger and more assertive. But that just means there’s a need for more effort in making the case and getting the public on board. Instead, the opposite seems to have occurred.
For example, in the case of IR, it was all too obvious that the previous Government’s private hand-holding sessions with the ACTU and BCA would not do the job. At least not if the Government wanted real reform.
The new media and a more political public service have been rightly implicated in the increased politicisation of policy and reform. But having seen what capable, reform-minded leaders can achieve in challenging conditions, I can’t help but think that it has been their absence (from both sides of politics) that has been the critical factor.
If leadership is key, it should not be impossible to turn things around. It’s not as though there isn’t enough material for an ambitious leader to draw on.
A propos, the Productivity Commission’s latest five yearly ‘to do list’ is currently being reviewed by Treasury. and soon due for release. The Treasurer has said it could ‘kick start a conversation’ with the public about reform. That should be encouraging. However his further observation that only a few of the Commission’s 70 or so recommendations aligned with his Government’s objectives is less so. It suggests that the Government’s interests and priorities lie elsewhere.
Redistribution is clearly at the top of the list. That was true also of the Whitlam Government just on 50 years ago. Whitlam understood, however, that to be sustainable, an ambitious socialist program of redistribution needed to be underpinned by a vibrant economy. It’s just that he failed to deliver — in part because of inherent tensions between the way the two objectives were pursued.
It’s hard not to feel that what we are embarked on currently is a case of history repeating itself.