Economy

May 17, 2012

What would a real economic reform budget look like?

What would a hardcore economic reform budget look like, stripped of political self-interest? It depends on what your economic priorities are.

Bernard Keane — Politics editor

Bernard Keane

Politics editor

What would a real budget, targeted at Australia’s most pressing economic problems and free of politics, have looked like last week?

25 comments

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25 thoughts on “What would a real economic reform budget look like?

  1. Richard Wylie

    Bernard for PM… or at least Treasurer!!

  2. Dajopa

    There is no housing shortage. Not in Australia and not in NSW. The report Bernard linked to is wrong and has been debunked by independent unaffiliated analysts.

  3. Jimmy

    Interesting article BK and tomorrows should be more intersting as identifying problems is always easier than solutions.

    That said if we look at the problems and see which party has the better pol icies to solve them then we see;

    1) Productivity – The coal ition says the workchoices is dead but constantl y make s comments that they will restore at least parts of it which indicates they only view productivity through the slash wages lense. The ALP wins this one.

    2) Decarbonisation – Well Bernard may not like the govt’s approach and it may have some flaws but when compared with the Libs “direct action” nonsense it is a rolls royce. An easy win to the ALP here.

    3) Housing – Not sure either party have much of a policy in this area so won’t make much comment.

    4) Fiscal Stability – Before you even discuss the govt’s record the mere fact that the Libs seem to have found a magic pudding where they can cancel the carbon tax & MRRT, keep the tax cuts and pension increases, spend billions on their direct action policy, nanny subsidies and ridiculous paid parental leave scheme, wind back means testing of everything and still deliver a bigger surplus and possibly support the NDIS (who knows after what Joe had to say yesterday) would indicate to anyone that the ALP win this one. But for the record the govt has steered us through the GFC, is returning us to a neutral fiscal policy at the right time and has taken measures to wind back middle class welfare and find new revenue streams.

    5) Infrastructure – Does the coalition have a policy on this, they didn’t seem to last time they were in govt. And along with the points made by BK the govtt has set aside MRRT money to invest in infrastructure needs. So a win for the govt there.

    After reviewing the big issues we confront you have to ask why is the govt looking at defeat and what sort of disaster will Abbott deliver?

  4. Modus Ponens

    Reducing effective marginal tax rates would increase workforce participation but it doesn’t automatically mean those new workers would increase productivity. If those workers needed training or were simply crap workers, then productivity would actually decline.

    Sorry to be a pedant, but I figure thats what you have a comments thread for….

  5. Bloody OiCrikey

    On productivity I think most Australians in the private sector are very productive, improvement will depend more on better management and streamlining of production and work activity, better technology and skills. The public sector is not very productive, a couple of years ago I heard the Australian defense department has 7,000 staff compared to the British which has 4,000, and now we have Fair Work Australia taking three years to complete investigation into the HSU. I suspect many public servants didn’t like Kevin Rudd because may be he did trim the sector down or expected them to work hard.

    One key point Bernard didn’t mention is the Gonski report, how education is failing to lift children from poor background out of the cycle of poverty. These kids also often end up in the criminal justice system with beak future. With limited budget the government should at least have human development program in the first couple of years of education and the last three years with proper identification of kids who are disillusioned or going astray. Assisting kids with social, community support, re-engage them with society and learn discipline have focus and goal for their jobs or career paths. It will be cost effective if local schools work together to develop such programs, and there will also be some bright kids willing to give a hand to the disadvantaged. My niece and nephew in high school have been volunteering in the last couple of year in free tutoring programs.

    The more ignorant and value free society we create the more they would likely vote for the current crop of Liberal politicians.

  6. Bloody OiCrikey

    mistype-bleak future.

    Welfare needs revamp. Some just enroll on this course and that course to get extra money without ever completing them and get employment.

    There are certain long term welfare recipients who just abuse the system, what’s bad is the cycle will continue with their children ending up in alcohol abuse, drugs and crimes. Long term welfare recipients will need more attention, training, work placement, compulsory community work, in worse scenario drug test them and provide them rent and vouchers instead. This should apply to people of all ethnic backgrounds.

  7. Andos

    Implement a Job Guarantee for full employment and price stability. Everything else is second-tier, at best (except decarbonisation).
    http://e1.newcastle.edu.au/coffee/job_guarantee/JobGuarantee.cfm

  8. Paul Byard

    I would add one other fundamental reform and two long-term goals: the enforced reintroduction of competition across the vast swathe of Australian business sectors currently run as rather cosy clubs for the benefit of a small number of privileged operators: the newspaper business, of course, supermarkets, banking, merchant banking, drinks production & retailing, gambling/pokies, packaging, resources to name just a few. Capitalism needs free and fair competition to work properly and we have lost sight of that. How you divide up those companies which have been allowed to become too large and powerful would require considerable skill and great courage. But at least the process could be said to be carried out in the spirit of the late, great Mr. Adam Smith, though any Government with the balls shouldn’t count on too much support from his alleged disciples at the Oz.

    Long-term goal #1: to give an incentive (perhaps, but not necessarily, financial) to business owners & managers to encourage their employees to participate in community affairs through volunteering. A few enlightened companies already do this, including Alcoa (http://www.alcoa.com/australia/en/info_page/week_of_service.asp )

    Long-term goal #2: to give better structure and support to the concept of lifetime learning so that any individual can continue to learn if they wish to do so irrespective of age or resources. Let’s aim to have our schools, TAFEs and universities sitting at the very heart of our communities.

  9. Damien

    Re the statement on infrastructure – I don’t think PPPs are the way to go. they’re inequitable. Why should it cost some Sydney residents (with no public transport links) $10 each way in tolls and others nothing? Also, the costs of building and maintaining country roads are funded across the community, why should some metropolitan projects be the responsibility of those in the areas they connect?

    When the NSW Government built the Sydney rail system, the price was five times the annual state budget – and this was when the states still had taxation powers. Thank god they did.

    Bloody OICrikey – your judgements about people on welfare and those from low socio-economic communities are a big part of the problem. You obiviously have no idea what one has to currently do to get Newstart or parenting allowances. Also the notion that kids from “poor background” are destined to a life of crime is just wrong. You can train and discipline and re-engage people all you want but if all you can offer is minimum wage casual work for a few hours a week (because you demand labour market flexibility) nothing will change – you’ll just make people angrier.

  10. Bloody OiCrikey

    Damien

    My comment on productivity did not mention labour market flexibility. One has to wonder why after Labor has introduced Industrial Law reverting many aspects of Workchoices back in favour of the workers as well as now that low income workers have been enjoying real income growths since Labor got in office yet there are so much anger towards them and the poll is dismal? That to me is the result of an ignorant and lacking value society.

    I did not say all of those from poor background will end up in crimes. But many in bad environment will likely, you should read the article on the Drum about how our justice system is failing our youths it also mentioned the Gonski report on need to help children from poor background, it was a week or so ago I hope it is still in their archive.

    Japan has less crime per capita than Australia and their welfare system is very strict, it depends on family value looking after each other, pride and personal responsibility. Australians are spoilt yet still have more crimes and disaffected youths. Many years ago when I could not focus on Uni and took a break and could not get work for a period of time, I was able to survive easily while on unemployment benefit.

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