Even though Covid-19 has briefly unified both major parties, and State and Federal government, the prospects of a similar consensus on meaningful economic reform today is slim to nil.
The various sides of this debate can’t even agree on the goals of reform, let alone the methods. The left and right are as far apart on the key issues of economic reform as they have been since the 1970s.
A key difficulty stems from the fact that the left thinks the main problem is inequality and the answer is more government. By contrast, the right thinks government is actually part of the problem, and the answer is private sector growth and productivity.
The unions are desperate to cling to any and all protections remaining for them in the industrial relations system, while their boosters in the media are arguing that any industrial relations reform should strengthen union protections, boost minimum wages and increase regulation.
Left wing think tanks argue capitalism is broken and government should abandon free markets in favour of government-led actions aimed at “reducing inequality and constructing an economically and ecologically sustainable world.”
This means protection for manufacturing, higher wages for subsidised workers in health and child care, a ‘massive investment in public housing’ and permanent increases in income support. Not to mention raising the superannuation guarantee.
These reforms are more or less exactly the opposite of a productivity-focused agenda.
And if paying for all this ever crosses their collective minds, or the mind of their collectives if you prefer, the sole answer is higher taxes.
The government has already made clear that it will not increase taxes, or introduce new ones, including the Treasurer specifically ruling out increasing the rate of the GST or broadening its base — even as a way of offsetting other tax cuts.
The government is apparently looking for new reform proposals that can win bipartisan support in response to the economic challenges. It would be better to return to the tried and tested ideas that generated so much prosperity, even if they meet with opposition.
We don’t need a new economic settlement. We need to restore the free-market framework of the economy and get government out of the way.
This is an edited extract of an opinion piece published in the Canberra Times as Grand coalition economic reforms are best left in the ’80s.
Home > Commentary > Opinion > What reform consensus?
What reform consensus?
The various sides of this debate can’t even agree on the goals of reform, let alone the methods. The left and right are as far apart on the key issues of economic reform as they have been since the 1970s.
A key difficulty stems from the fact that the left thinks the main problem is inequality and the answer is more government. By contrast, the right thinks government is actually part of the problem, and the answer is private sector growth and productivity.
The unions are desperate to cling to any and all protections remaining for them in the industrial relations system, while their boosters in the media are arguing that any industrial relations reform should strengthen union protections, boost minimum wages and increase regulation.
Left wing think tanks argue capitalism is broken and government should abandon free markets in favour of government-led actions aimed at “reducing inequality and constructing an economically and ecologically sustainable world.”
This means protection for manufacturing, higher wages for subsidised workers in health and child care, a ‘massive investment in public housing’ and permanent increases in income support. Not to mention raising the superannuation guarantee.
These reforms are more or less exactly the opposite of a productivity-focused agenda.
And if paying for all this ever crosses their collective minds, or the mind of their collectives if you prefer, the sole answer is higher taxes.
The government has already made clear that it will not increase taxes, or introduce new ones, including the Treasurer specifically ruling out increasing the rate of the GST or broadening its base — even as a way of offsetting other tax cuts.
The government is apparently looking for new reform proposals that can win bipartisan support in response to the economic challenges. It would be better to return to the tried and tested ideas that generated so much prosperity, even if they meet with opposition.
We don’t need a new economic settlement. We need to restore the free-market framework of the economy and get government out of the way.
This is an edited extract of an opinion piece published in the Canberra Times as Grand coalition economic reforms are best left in the ’80s.
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