Flat White

Sco Mo, Josh: this is what we need to hear tomorrow

5 October 2020

5:00 AM

5 October 2020

5:00 AM

Many Australians rightly look back on the Hawke-Keating-Howard-Costello era of the 1980s and 1990s as Australia’s golden era of reform.

From the floating of the dollar to balanced budgets, and from low tariffs to wage bargaining, up to the introduction of the GST, reform used to be the result of mixing good leadership with all-out necessity.

Modern legacies

But ‘reform’ in modern times has been a muddled journey, leaving many Australians increasingly dismayed at politics.

  • Kevin Rudd, post-GFC, promised revolutions that only collapsed people’s trust in government.
  • The Gillard government’s legacy, amid much internal Labor squabbling, has been reduced to a misogyny speech on the floor of federal parliament.
  • Malcolm Turnbull –- a cosmopolitan and accomplished individual out of government –- will be remembered for lost policy years in government.
  • Tony Abbott fixed serious issues when at the prime ministerial wheel, stopping the boats and signing three FTAs with Australia’s largest trading partners. He also attempted the most seismic reform to government – the reform of federation – before his tenure was ended from within.

It seems the only recent serious policy ideas floated Australia in recent times have been various doomed schemes to increase the GST in a new wave of tax reform, while attacking high energy bills, despite our energy abundance, has proven no easy fix.

“The only legislation that can expect swift passage,” noted Abbott in 2017, “is to spend more, to regulate more, and to put more tax on the so-called rich.”

As shown at the 2019 federal election, it was up to everyday Australians to stare down bad ideas like Bill Shorten’s seizure of superannuation and franking credits. And they did.

A time for recovery

COVID has changed all of this.

Tuesday’s budget is, in the words of Prime Minister Scott Morrison, “the most significant since World War Two” – no small remark for an Australian prime minister of any party.

At the press club last week, in laying the ground for a reform package, Morrison had this to say:

You can invest all the resources you like in industry programmes, but if taxes are too high, if industrial relations systems are too complicated, the adoption of digital technology is patchy, if energy is too expensive, if approvals take too long and are too costly, if the roads are clogged, and employees do not have the right skills, and you are shut out of overseas markets, then you are wasting your time. That’s why all those things – correcting all those things is important.

These are not new problems.

But the moment to comprehensively deal with them has arrived.

A COVID reform package

For taxes, it means dropping the company tax rate from 30 per cent to 25 per cent (the United States is 21 per cent, Britain 19, while Hong Kong and Singapore are 16.5). This will mean a reduction in ‘deadweight loss’ -– meaning a dollar spent by a business does more for people than a dollar spent by government — let alone more jobs, investment and growth.

For skills, it will mean giving more people, not unions, access to jobs. Among a range of complexities it is simply arcane that, due to our award system, some hospitality workers can remove plates from a table, for example, but aren’t qualified enough to actually put them on table in the first place.

The government has sensibly put award simplification but also enterprise agreement making, casual and fixed-term employees, compliance and enforcement, and greenfields agreements, all on the table.

For energy, it’ll mean escaping ideology and, as ex-Dow Chemical Chairman Andrew Liveris explained recently, pursuing an Obama-type ‘all the above energy strategy’ for Australia – gas, battery technology, some renewables and, yes, coal.

And for regulation, it will mean reducing other red and green tape, which has not only put $65 billion of foreign investment at risk since 2000, but is costing the Australian economy $176 billion per year.

Australia’s economic recovery requires that to regain prosperity we finally fix some of these problems.

A note on livelihoods

Root and branch reform clearly provokes opposition.

And while it should be focused on dynamism and opportunities, the psychological damage of COVID should not be overlooked.

The Jobkeeper scheme has been a testament to the role government in helping to sustain prosperity and security –- core functions of the state, especially in times of crisis.

If the past six months have been a test in government stimulus then the next six months can be about giving people and businesses space to get back on their feet and flourish.

Most of all, at our most critical time of recovery, it will require the ultimate test of leadership –- the right thing to do and not the easy thing to do.

Got something to add? Join the discussion and comment below.

Show comments