Sunday Sanity Break, 28 April 2019 - Economic reforms for the next government
Updated: May 2, 2020
Another horrendous terror attack, this time in Sri Lanka, makes us both angry and more nervous. Clearly Sri Lanka was not ready for such an event, but every nation now must put far more effort into this problem.
Three weeks until Australia’s next Federal election. Labor’s leader, Bill Shorten is now said to have lost the second week’s campaign to the Prime Minister Scott Morrison. Mr Shorten seems to be lying low, with other members of his team often asked by Bill to answer questions, and when he does he often responds with slogans rather than honest facts. Furtive rather than open and honest.
Scott Morrison, on the other hand, looks cheerful, positioning himself as a man of the people, and with plans to cut taxes rather than Labor’s plan to ‘tax the rich’ until their bones rattle. We are awaiting the next Newspoll to check on progress, but we are assuming the Coalition will at least make a fight of it. And even if the Coalition loses, the Senate may have the numbers to block most of Labor’s more worst tax plans.
What fun it will be if the Coalition wins. Bill Shorten will go, Albo will become leader and Labor will have a great chance to win the election of 2022. Especially if the Coalition is not blocked in the Senate, it will have the opportunity to begin the task of reforming the Australian economy. Their tasks are threefold: greatly increase spending on infrastructure; greatly increase spending on defence; and doing all this in a way believed by a majority of Australians to be fair.
The only way to achieve this trifecta will be to implement a powerful program of productivity enhancing reforms. Here is a brief list of opportunities.
Allow coastal shipping of products and raw materials to be transported at internationally competitive rates – a reform that may cut out or delay fast train services.
Implement a program of high efficiency super-critical, low emission coal fired power generation, to provide the major base for Australia’s historic low cost power and energy advantage. Plan for eventual introduction of nuclear power generation.
Introduce plans for lower, internationally competitive company tax rates.
Restore R&D spending as a per cent of GDP, and provide better tax concessions.
These recommendations are relatively mild and could be introduced in the next term of government. Next week we shall list some more difficult reforms, for the second term of government by whoever is in power. Note that either government needs to discuss the reform package widely, and publish a clear narrative about why the reforms are needed.
Point 1: productivity will be enhanced and real wages will rise.
Fiona Prior enjoys the dazzle of playwright Lucy Kirkwood at Sydney Theatre Company’s Mosquitoes. More here.
To be provided at end of the weekend.