Crikey‘s reform report card: how does Rudd stack up?
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Well with all this debate about how the Government has wimped it on the Henry review and its emissions trading scheme, let’s see if we can’t put together a mechanism that helps rate economic reform in terms of difficulty. So here’s a possible model, and your thoughts are welcome. What are the significant factors in major economic reform, and what makes it difficult for governments? The scale of reform is an obvious starting point: a government deserves greater credit for pursuing major reform than small reform. I’ve suggested a simple small-medium-large scale — worth 1, 2 or 3 points. Next, the level of support for a reform on one’s own side of politics is important. It’s a rare reform that punishes a government’s core constituency, or meets extensive internal opposition. It’s easier to pursue reforms strongly backed by your own constituency — like Labor with superannuation (or even Paul Keating’s IR reforms), or the sale of Telstra by the Coalition — than ones that are opposed by your own side — like Labor’s tariff cuts. On the basis that you should be rewarded for reforms that upset your own side, I start the scale at 0 for reforms that are supported by your own side, 1 for limited opposition and 2 for strong opposition from your own mob. The level of community support is also clearly important. Serious economic reform rarely receives strong support in the community (Rudd’s health reform is an exception), or even a high level of understanding. Nevertheless, governments that tackle reform that faces strong community opposition — like the Howard Government’s GST — deserve more credit than those that only diffuse opposition or opposition limited to particular groups. I’ve suggested 0 for strong community support (like health), and then up to 3 points for strong community opposition (like the GST). Then there’s the issue of how hard it is to get reform through parliament. Apart from the golden period of economic reform in which John Howard supported much of the Hawke Government’s agenda, governments usually face parliamentary opposition to their reform plans. I’ve graded that on the basis of whether the measure was opposed by the Opposition of the day, the cross-benches were willing to deal, or whether there was complete opposition that meant a government had to await a change in the Senate or a change of heart by the Opposition (Peter Costello’s PBS reforms spring to mind) before achieving its goals. I’ve suggested 0 for reforms that are supported by the Opposition, 1 for reforms that can be negotiated through with the support of the cross-benches, and 2 for reforms that faced strong opposition within the Senate. The final criterion is a variant of community opposition: how powerful are the enemies of reform? What sort of opposition can the losers from reform mount? Reforms that take on a well-organised and well-resourced industry sector — like the CPRS — are clearly more difficult than ones that target more diffuse or less well-organised groups — such as, for example, the manufacturing sector in the 1980s, or welfare reforms, where no one except the social services sector speaks up on behalf of the reform ‘targets’. Reforms pushed through in the face of well-organised opposition from industry deserve more credit than ones where the targets aren’t well-organised or resourced. I’ve proposed a scale from 0 for no opposition through to 3 for CPRS-style highly-organised industry resistance. So that’s our scale. Let’s give it a trial run with some of the biggest economic reforms of the last 30 years. Here are the results:
John Howard’s GST: Principally an attempt to remove inefficiencies and distortions from the taxation system rather than fundamentally reshape the economy, the GST lacked the true scale of, for example, tariff reform and was supported by the conservative side of politics. But there was strong community opposition, manifested in a close-run election, followed by a tortuous passage through parliament and a well-organised campaign from a variety of industry groups designed, if not to derail the GST, then debauch and neuter it for their own purposes. It scores 10 out of 13, making it the most demanding reform taken on by a government in recent decades. Peter Costello’s 1996-97 Budgets: While not reforms per se, the first two Budgets of the Howard years reversed years of fiscal drift under Keating — partly due to a jobless recovery, but eventually entirely due to Labor’s lack of discipline — and cemented fiscal surplus budgets into the Australian political landscape after a long absence. They faced strong community opposition — including a famous siege of Parliament House — and opposition from Labor and the cross-benches. They score an 8. Bob Hawke’s tariff reform: While Gough Whitlam started the process of tariff reduction, the Hawke Government’s comprehensive tariff reduction program in the 1980s set the scene for a major restructuring and opening of the Australian economy. It gets big marks for its significance, the hostility of the union movement (and, to a lesser extent from the community), but it was supported by the Opposition and the manufacturing sector lack organisational muscle to fight it. It scores 7 out of a possible 13. Bob Hawke’s tax reforms: We had to wait more than a decade for a consumption tax, but the Hawke Government’s capital gains tax and fringe benefits tax reforms were a substantial improvement in the tax base and faced enormous opposition from business, which went ballistic over what it called the ‘Farewell Bob Tax’. Hawke had the last laugh, and the long tax-deductible lunch was no more. 7. Paul Keating’s compulsory superannuation: The reputation of the Keating Government grows over time — despite fiscal indiscipline and the lingering effects of recession, it produced national competition policy, IR reform and perhaps Keating’s signal achievement: compulsory superannuation. With benefits that will continue to increase generation after generation, and introduced in the face of opposition from the Coalition and business, it scores a 7. God almighty, I feel like I’m MCing an awards night. Several reforms that scored 5 — NCP, a slow-burn reform introduced through COAG and bitterly contested by the states who demanded compensation (plus ça change…); the privatisations of the Hawke and Keating Government, pushed through over the objections of the union movement; and Workchoices — introduced against plenty of strong opposition, but without any serious economic benefit and via a compliant Senate. So, how does the Rudd Government’s efforts measure up? The CPRS, for its long-term impact and organised opposition, scores highly, although I declined to give it a high score for parliamentary opposition since the Government started with a bipartisan consensus on the issue. It gets a 7, but it’s now moot courtesy of being shelved. Tax and health are both middling-level reforms, and health gets marked down because of the strong community support for it. Tax gets a 5; health is sitting on 3 but might increase with parliamentary opposition. And the Government’s response to the GFC, which may not have permanent benefits but saved tens and perhaps hundreds of thousands of jobs, garners a 3. What do you think — what key reforms have I omitted? And have I been too harsh or too kind? Let me know what you think and we’ll see if we can take this beyond a parlour game and make a useful tool for assessing public policy. |
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35 Comments
Bernard,
How can you count CPRS when it’s been dropped? Please stick to reforms that have actually been put through.
It wasn’t really ‘reform’ but Howard’s changes to gun laws were admirable, in the face of stiff community opposition (in some parts). There’s some classic footage of Howard addressing some unhappy people, when he wore a bullet proof vest. Classic Aussie drama.
@Ian,
Two points re CPRS. Firstly, the author stated that this is now moot because it has been dropped, so in that way he agrees with you.
However, proposed reforms can validly be assessed using the same 13 point scale, in which case CPRS is the only one so assessed.
The very recent Henry Report’s 100-plus recommendations could be assessed using this tool and on a right-left scale. When plotted as a scatter-graph, it would give an impression of the balance of the report, as well as an indication of the guts and strategy of the Government.
No matter how you cut the cloth though the GST is not really a reform for the better it is a regressive copy of other peoples taxes.
Guns- more guns now than ever before, just a different sort.
I like it, but the table is confusing. Shouldn’t it be ‘opposition’ instead of ‘support’ in the headings, if a high number means opposition?
Eponymous - I was tempted to include major non-economic reforms, chiefly so I could address Howard finest hour - and his greatest contribution to public life - the gun laws, which would have earned big marks for taking on his own constituency and facing down community opposition - remember the bullet-proof jacket. But then I wondered if I should treat them as a type of economic reform, which seemed gratuitously offensive.
Eponymous, I agree and I didn’t/don’t like much about Howard.
P.S - Bernard not as offensive as gun toting lunatics, whatever their political colour.
A great idea well executed.
I recall strong left wing union opposition to Keating’s enterprise bargaining, but he had earlier persuaded the ACTU so I suppose it’s fair to count that as being supported by the labour movement.
I am tempted to add the Native Title Act 1993, but arguably that was just implementing the High Court’s decision in Mabo. Nonetheless, it is closer to an economic policy than Howard’s laubale gun law.
But for me the biggie was Hawke-Keating’s floating the Australian currency. I would score that 3+ on size of reform. It was opposed by Treasury Secretary John Stone, but that hardly counts as opposition from one’s own side. I gather there was considerable uneasiness in Cabinet - say 1 on support from one’s own side. There was no community support and very little community opposition since so few understood its implications, so maybe that also gets a 1. The Coalition opposed but that hardly counts since the currency was floated by executive decision, so 0 on that. I recall a bit of external opposition from the manufacturers and chambers, but again they weren’t able to mobolise much opposition, so again 1 or maybe a generous 2 on that.
That would give the float a score of 7. Yet I think it warrants a higher score than the gst, so mabe the scale on the size of the change needs to be inceased by a few points.
Bernard,
I’d like to put up for consideration, Julia Gillard’s Education reforms, such as the topically controversial, ‘My School’ website and all that it entails. You could easily say that there has been stiff opposition from the Teachers about it, along with the undertow of Performance-based Pay, the ability for a Principal to sack non-performers, and the National Curriculum successfully implemented. Something Julie Bishop had neither the ability, nor the commitment to achieve the consensus required from the States.
I’d also like to know what you think about Chris Bowen’s reforms of the Financial Services Industry. Not particularly sexy but devestatingly effective in nobbling a key institutional backer of the Coalition.
Oh yeah, what about the NBN?
The NBN report will drive the Murdoch hackies into a sheer tizz.
I like the reforms to pensions - first real increase in 20 years and not one media out let noticed.
I do not like the increase in the age pension cos they already got 30% more than single mothers and the unemployed, and of course the income support for the latter groups still haven’t been increased. Even if you like the age pension increase it was easy - a noisy self-interested group widely supported in the community.
Forget th gun reform laws Bernard. The rally was a big show for effect but come to the country where many of us know it was a real laugh. Most of the guns handed in were old, needed repair or were not wanted and money was paid for handing them in. A good profit was made by many for rubbish while the best guns were carefully buried. It is still bragged about. So you were right to leave it out.
In fact, I think stats show that gun ownership increased after a few years.
I think that overall you have underrated the value of Rudd’s reforms and the difficulty of negotiating with people who break their promises and don’t begin to understand what ‘negotiation’ means!
Dr Harvey M Tarvydas
Terrific effort BK in FA (stuff all) time. Apart from agreeing with you generally let me say …
We the people, we the businesses, we the workers owe this sweet, talented and courageous man K Rudd (PM of the Australian Government for those unwell Liberals and Australians who thing he is just an accidental aberration not deserving of even common decency) our health and current well being which the rest of the Western world’s talented people are in awe of and wondering if Australian’s are trying to redefine themselves as the careless ungrateful’s or just abject fools (ful’s) (abjectful’s).
Dr Harvey M Tarvydas
CORRECTION TO MY FIRST EFFORT - too excited.
Terrific effort BK in FA (stuff all) time. Apart from agreeing with you generally let me say …
We the people, we the businesses, we the workers owe this sweet, talented and courageous man K Rudd (PM of the Australian Government for those unwell Liberals and Australians who think he is just an accidental aberration not deserving of even common decency) our health and current financial well being which the rest of the Western world’s talented people are in awe of and wondering if Australian’s are trying to redefine themselves as the careless ungrateful’s or just abject fools (ful’s) (abjectful’s), also we the big and small Australian and International companies of allsorts similarly owe him for our health and wellbeing .
I just got so excited sorry!
Dr Harvey M Tarvydas
@SHEPHERDMARILYN
‘I like the reforms to pensions - first real increase in 20 years and not one media out let noticed.’
You did SHEPHERDMARILYN – that’s why you’re here – and you’re in the media now.
Howard’s gun buyback removed 650,000 guns for a cost of $320 million.
Rudd’s smallest ideas make that look like chump change.
All of Rudd’s ideas are small-minded but they do have huge price-tags.
Mind you, he’s not the one payin’
I see Bernard is still asserting the Rudd is methodical and fearless meme despite the overt hypocrisy.
If only the Opposition kept their word etc etc
It’s really not Rudd who’s the chump.
GC51 , Gun Toting lunatics ????? And who are they ?? Gold medal winners ? Police ?, security-guards- ok must be them. Being a Sporting shooter since i was 17 years old, and was a Hand gun owner too, i find your comment offensive , just like the War monger Howard and his address to SSAA members with a bullet -proof jacket on ? Lots of nice old collectible firearms were squashed for nothing , because we just brought NEW GUNS with the discounted money we got . If we are gun toting lunatics, how come howard didn’t get his head blown off ??? at the meeting. His head was bigger than most inner circle targets. Don’t forget that the gun used in Port Arthur, was a handed in gun, that was to be destroyed or SENT OVERSEAS (Tassie) . I didn’t see any Criminals lining up to hand their guns in ???? People kill people with lots of things other than guns too.
Jamesk, religious tossers like you, kill more with your religious wars over the centuries. Howards buy back was a waste of money and was just a knee-jerk reaction to get votes, when mental health(that they cut funding to) and violent games and videos. Didn’t ban or stop videos or games ???. Rudds plans are dear because the Liberals did nothing for 11 years and let everything get so run down or sold off $300 Billion of assets to pay off $96 Billion debt ??? the rest went back to the filthy rich friends and donors to the party.
Love your work, BK.
I do wonder whether the scale shouldn’t be stretched a little, especially for the size of the reform. In many cases it would be possible (I think) to estimate the actual size of the economic impact (annualised) and offset it by whatever “compensation” was attached to it. Intuitively, I would have put the GST, CGT, Keating super and Hawke tariff reforms in the top spots. I hadn’t before thought of Costello’s early budgets as real reform but, on reflection, you are right.
I’d love to see this work a) crowdsourced via an online poll (maybe a job for the new Crikey Webmaster) and b) applied to other areas of policy.
It would no doubt be quite complex to do something similar in areas such as environment policy where the States hold such power and where initial strong opposition is actually whittled away over several years (or decades, as with water policy or landclearing). It has certainly provided food for thought.
Besides perverted blind prejudice on what possible basis has the egregiously dense Harrybelbarry for asserting that I’m religious?
And what has it got to do with the issue at hand?
At the end of Howard’s government in Nov 2007 Australia’s Federal Government has approx $20 billion liquid savings whilst now the Federal government owes approx $140 billion which is projected (but laughably unpronounceably for Rudd) to reach $300 billion.
Which “filthy rich friends and donors” in particular did Howard give $204 billion to Harry?
Who gets the lions share of political donations ALP or Lib/Nats?
You’re a clot Harry. What are ‘ya?
Agree with the key message-we have a “do nothing’ government, and in the past we have had true leadership-doing what is unpopular, but what they believed in.
I feel nauseous when Mr Rudd proclaims that he is tackling the issues and making the hard, unpopular decisions. He should just be honest, and say that it is too hard to change too much too soon.
Jamesk, just from reading some of your ravings , i just don’t believe in fairy tales. You forgot the $50 Billion cossie borrowed (NET) not long before they got tossed out and the rodent lost his seat to boot. And totally forgot to mention the GFC ???
The packers, Lowy Family ,The cardboard king ,BIG Tobacco, etc etc and the top 10% of earners (shirkers)
The Fiberals did till labor got in , then Big Business followed their nose to Labors door, except for the Tobacco Industry. Labor don’t take blood money from them. Did you see Nick on Q & A , trying hard to defend Big Tobacco and topped it off with “The world’s not getting warmer rubbish” straight from the Polluters Hand book. He got booed and laughed down and he knew it, red faced and ready to blow. i thought he wanted to spend more time with his family ?? Wrong family ?
Howard’s gun laws were an absolute joke, built from histeria from the press. All it served to do was disarm the law abiding citizens while criminals kept them and continue to import what ever they want illegally. Does anybody really think that if every single gun was taken removed from the the country that insane killers would just stop existing? They will find another way to let their insanity loose. What do you do when the next one just starts mowing down people in a car. Car buyback? give me a break. This is a great country but the people that live here are increasingly becoming scared little sheep that think what they are told to think. I consider my shooters licence to be a card that says I am a law abiding citizen. Australia has nothing to fear from the sporting shooter and the sporting shooter has no case to answer. Wake up Australia.
Re Keating’s compulsory super “…. introduced in the face of opposition from the Coalition and business,”
I well remember the bleating of the business lobby on this: it was the end of business in Australia, unemployment would rise, business would go offshore - the whole gamut of lame arguments.
Despite that, over the last few decades many in the business community have made vast amounts of money out of managing (or in many cases mis-managing) the flood of money flowing into the financial services sector.
Just shows that you should never trust the business lobby (hello mining industry !) - they’re almost always 100% wrong, and quite frankly, it makes you really wonder how they manage to run anything.
Yes BJB especially in stark contrast to the markedly efficient running by the krudd of his BER, pink batts, grocerywatch, fuelwatch, boatpeople, CPRS and antiwhaling programs.
Why even GM can’t build cars without him.
Harrydelbarry - Thanks for confirming my thoughts re the lunatic comment. Only a lunatic would lump police and security guards in with the rest of the groups you mention.
I am including medal winners, a useless sport and sporting shooters, ( an oxymoron if ever there was one). The fact that you bought, (not brought), a new gun only reinforces my view, it also makes you a criminal as you broke the law. So no I wouldn’t expect you to line up unless you were deciding to upgrade your firepower. Please feel free to be offended, after all it’s a free country.
I wonder if GC stands for gun control much? Just because Harry bought a new gun doesn’t make him a criminal. Thankfully it’s still legal to buy them, you just have to jump through more hoops. Hoops, I hasten to add, that take valuable time away from police that could be doing more valuable things like policing people that actually commit crimes. Even JWH himself said when he addressed to liberal party before the laws came in said “We are about to put in place laws to control the lives of a group of people that have never done anything wrong and never will” .I hope Harry isn’t too offended by your misinformed, comments, I am just as ignorant to them as you are to what IS a legitimate sport. Perhaps you think archery and darts should be outlawed as well. Maybe then you will feel safe. I fell sorry for you actually, I’d hate to be that scared.
Sascha - Put down the keyboard slowly and step away from the computer with your hands in the air. I have a dart and I am prepared to use it.
Given that your were correcting Harry’s spelling before, I took you for an intelligent enough person to understand that the point was that shooting, like archery (formally used for warfare and hunting) and darts (also formally used for warfare and hunting) is a sport based on skill, not physical activity. I apologise for my mistake. All jokes aside, I don’t understand where the hatred of firearms comes from. If it is because you were personally touched by crime that involved firearms in some way, then I truly empathise with you. But chances are that it was not a licenced gun owner that did it and if it was, the national crime snapshot statistics show that this is very rare. Yes, guns are used in wars and they are used to kill people. But go to a shooting range and see the people there. Kids, women, families. Shooters are portrayed as Toothless possum eating rednecks and it’s just not true. We don’t go around blasting blasting fuzzy little endangered creatures for the fun of it. In fact if there was no hunting, the population of feral animals competing with our own native fauna would get out of control. Humans are the only top order predetors in this country. Personally I agree with some aspects of gun control, safe and secure storage, licencing, mandatory safety courses, all good I don’t think you should be able to buy fully automatic weapons either. The things is though, the major point of all of this, is that criminals do not have gun control and never will. So tell me why control the law abiding population?
The Liberals are only interested in economic “reform” when it screws workers, unions and the less well-off.
Other than that their preoccupations are:
*) Helping themselves to billions for government advertising to big-note themselves at our expense
*) Engaging in a never-ending culture war against their ideological opponents, with the aim being a permanent state of Liberal dictatorship
*) The politics of divide-and-conquer. With themselves taking the spoils of victory
*) A cosy relationship with the commercial media, and an intimidatory one with the ABC - so they get all the media on their side attacking their opponents
Sascha - Touche, pardon the weapon related pun. No past experience with firearm related crime, just not interested in having one. I am thinking of forming a picket line at the Robin Hood opening in Sydney, (due to Russell Crowe’s accent, not the archery). I guess you won’t be joining me. Anyway you have convinced me. I stand to be corrected here, but I think someone famous, John Lennon, (I’m going out on a terribly ironic tangent here), once said “happiness is a warm gun.” So where do I get my gun licence?
P.S it wasn’t spelling, it was the wrong word Harry used.
Sascha - again on the subject of spelling/word usage.
“Formerly” is not the same word as “formally”. Twice does not make it correct either.
No doubt GC52 noticed this, but was too good natured to bring it to your attention.
Thanks John. I actually mean that warefare and hunting involing darts and archery was a black tie affair.