29 September 2014
Government needs to sell its reforms to voters
Anyone following discussions around the G20 will know that the main focus across the world is the importance of reform with a shared objective of achieving a 2 per cent collective growth target.
The Australian government’s domestic reform agenda of controlling spending, reducing red tape and beginning to improve our federation and our tax system follows a tried and true formula being pursued around the world and in our own backyard.
We see countries and states getting on with sensible changes, and reaping significant benefits for the communities who understood and backed them. This is not radical reform, it is just the right mix of policies to pursue.
New Zealand faced dramatically lower living standards, high unemployment and a government without the flexibility or capacity to provision for an older population. The government and people of New Zealand embraced the opportunity to change and improve, and the courage is paying off.
They got public spending under control, changed their tax and welfare system, invested in key infrastructure, focused on how they could support their strongest sectors and chased after a major free trade deal with their biggest trading partner.
Today New Zealand sits 17th on the World Economic Forum’s global competitiveness index while Australia has fallen behind to 22nd.
In NSW, a state which was starting to put a handbrake on the national economy, the state government has repaired the budget, invested in infrastructure and public transport, and privatised inefficient government enterprises.
Now NSW is, once again, pulling its weight as one third of our national economy with an unemployment rate below the national average. Once the sale of poles and wires proceeds, there will be enormous opportunity for reinvestment into other much needed public infrastructure.
In Queensland, we have also seen investment in infrastructure and spending restraint arming the state to become an economic powerhouse.
None of the decisions taken in these diverse jurisdictions was without challenge or community concern. None came without having to make choices and trade-offs in pursuit of a recognised national imperative — stronger budgets, higher growth, healthier businesses, and ultimately more jobs and better lifestyles for their people.
In Australia, the word “reform” has been overused and shockingly misused. It is understandable that the community has a problem with it.
But despite this, most people understand that government budgets need repairing, that key infrastructure is lacking or not up to standard, that our tax system is not fit for purpose for our modern economy, and that global pressures are putting our jobs, businesses and living standards at risk.
It is incumbent on all of us who care about this country and understand the opportunities and the risks our economy faces to convey the benefits of reform, and the choice we are making for future generations if we do not pursue it.
A contest of ideas between parliamentarians and sectors of the community on the detail of reform is reasonable and necessary. But we cannot afford to be in gridlock on the fundamentals of what needs to change and why.
That’s why its promising to hear statements from opposition Treasury spokesman Chris Bowen on the importance of tax reform and from Senate opposition leader Penny Wong on the need for trade liberalisation.
It is of material concern to Australia, a country with immense opportunity, if structural reform is viewed superficially as negative, unfair, unnecessary or simply too difficult, rather than an essential pathway to a better future, if the fear of reform is used as an excuse for political ideology.
The basic recipe for reform is well understood: build a more competitive tax system, look to unleash innovation, open the economy to investment and trade, and ensure the labour market can respond to changing circumstances.
The recipe is much the same the world over for the simple reason that to create jobs and improve living standards you need growth — new and growing businesses, and an environment in which people are confident to spend, to innovate, to save and to invest.
It involves making changes needed to stay globally competitive and that means coming to terms with the world we are living in, a world in which globalisation and technology are requiring our industries and our people to be up with the world’s best.
It requires more agile businesses, offering products and services the world will value, skilling our people for new types of jobs, lowering costs and realising the full potential of the things Australia does best.
The Australian government has put the right processes in place. Now, we need to follow through, and effectively inform and engage the community in making a choice.
Most of all, it requires painting a picture for people of what change can bring. Of how a great country like Australia can take on the forces of change to fulfil our enormous potential, and what that will mean to all Australians.
In the lead-up to the G20, Australia should be an exemplar of a country able to negotiate the detail of a reform direction around which we are utterly united.