If nothing else, the release yesterday of the latest Intergenerational Report served to demonstrate that we’re locked into the same useless debate about economic reform that’s been going on for years.
The report’s assumption of a return to annual productivity growth of 1.5% over the long-run has been universally derided as an act of wild optimism, especially given Treasurer Josh Frydenberg’s professed attitude that all the big reforms have been done and the road ahead is about eking out lots of small improvements. “You can’t float the dollar twice,” he says.
That’s elicited what is now the almost ritualistic demands for more (big e, big r) Economic Reform, and lamentations that the current crop of politicians aren’t a patch on previous generations like Hawke and Keating, with both sides portrayed as too timid to propose reforms. It’s everywhere today — in The Australian, from the Bloviator-At-Large and in a bizarre editorial which claimed “the satisfaction of family life must be a vital aspiration for the young”; in the Financial Review again and again (including from Craig Emerson); and of course from the usual suspects in employer groups.
What’s left out of that narrative of a political class no match for its predecessors in the reform stakes are some inconvenient facts. The Gillard-Swan government undertook a big picture reform every bit the match for big reforms of the Hawke-Keating years, with a carbon pricing scheme that proved both efficient and effective. It received no support from the supposedly reform-loving business community and was repealed, to cries of delight from business groups, by the Abbott government.
If the carbon price had been retained, Australia’s subsequent, costly years of energy policy chaos would have been avoided and we’d be well advanced on the path to decarbonisation.
Nor were there too many op-eds in support of Labor when it went about cutting middle-class welfare to make the budget more sustainable over the long-term, or increasing the retirement age. The plague-on-both-their-houses stuff from the likes of Chris Richardson about the IGR rings a bit hollow when you go looking for what support Labor’s reforms got against campaigns of lies and abuse from the Coalition and News Corp.
This “where’s the reform” stuff has been going on a decade and in a concentrated reform since Tony Abbott’s disaster of a prime ministership and the fizzling-out of Malcolm Turnbull’s focus on innovation — supposedly because Nationals MPs couldn’t explain it to farmers. It has gradually hardened into a longing for some neoliberal Messiah, some bizarre cocktail of Hawke, Keating and Howard, to fly in and rescue us from our cowardice with their brilliant political skills or, in lieu of that, a tolerance for political suicide.
As Crikey has been pointing out for a long time, the problem isn’t the presentation, but the product. Voters have got wise to “Economic Reform”. They’ve worked out the deregulation just helps big corporations rip them off; they sussed that privatisation leads to poorer, more expensive services; they learnt through experience that industrial relations deregulation means lower pay and worse conditions, that the market in many areas is a shabby choice of dud providers.
They’ve seen how the fix is always in when it comes to reform, that the big donors whose interests are affected buy a seat next to the relevant minister and bend her ear about why some policy should or shouldn’t be pursued — all in secret.
The electorate of today isn’t the electorate of 1985, waiting to be wowed by Paul Keating’s economic theatrics while being assured by Bob Hawke’s love affair with Australia. They have had over three decades of experience of deregulation and user-pays.
And unlike Hawke and Keating, no one now is offering major human capital reforms in exchange for deregulation. Labor introduced Medicare, and superannuation, and the NDIS. The discussion in the wake of the IGR now is how health and disability care costs are growing too fast and have to be constrained — even as the government intends to spend over $17 billion addressing the consequences of exactly that approach in aged care. The Economic Reform narrative from here is all “take your medicine” stuff in which there’s no gain without neoliberal pain.
Nor is there much mention of the fact that the Productivity Commission under Peter Harris outlined a long list of major productivity reforms in 2017 that remain mostly untouched. More joined-up, patient-centred health care making better use of data. Overhauling pharmacies. Targetting education funding at outcomes. Less political infrastructure investment decisions. Move to land taxes and electronic road user charging. Reintroduce a carbon price.
They’re untouched because they’re actually about economic reform, not Economic Reform. The latter is what business wants to maximise profits, rather than maximise public benefits. Industrial relations deregulation. Lower business taxes. Removal of environmental protections and other regulatory barriers. That’s what commentators have in mind when they lament the lack of political will to do the right thing.
And the same calls are made each time, and are likely to be made after the next IGR, while advocates fail to understand why the electorate has no interest in being duped again.
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