With a tanking economy, the central bank demanding both fiscal stimulus and structural reform, the nation’s premier economic policy outfit warning of a productivity and innovation crisis and having spent the election campaign mugging for the cameras and tearing at Labor’s long and self-destructive reform proposals, Scott Morrison has a major problem.
How does he respond to calls for economic reform when he has no agenda and no mandate for doing anything?
His solution: go through the garbage bin of neoliberal reforms and pull a couple out — and then tell business to make the case for actually doing them, hopefully sidestepping the small problem that the government has no electoral authority for change. Package them into a speech dropped — in the time-honoured fashion — to Nine and News Corp to ensure some positive coverage, and there you go.
Put a fork in them, the election is almost done.
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Morrison’s “reform” speech to a business lobby group hits two of the three clichés of neoliberal “reform” — industrial relations reform and deregulation (the third, company tax cuts, was ruled out during the election campaign, but give that twelve months). But the onus will be on business to make the case for them. On industrial relations reform of “impediments to shared gains for employers and employees”, Morrison says “we would expect business organisations such as yours to build the evidence for change and help bring the community along with you too”.
As we know, the Australian business community has been highly effective in recent years in bringing the community along with it on the need for reforms.
Indeed, contrary to the implication of Morrison’s speech that business somehow hasn’t done enough to promote industrial relations reform, they never shut up about it. Even as wages have stagnated, the profit share of national income has surged and industrial relations disputes have fallen to negligible levels, we’re constantly lectured that workers and unions have too many rights and that major reforms are needed to provide much-needed “flexibility”.
But Morrison also wants business to dictate the government’s deregulatory efforts: “By focusing on regulation from the viewpoint of business, we will identify the regulations and bureaucratic processes that impose the largest costs on key sectors of the economy.”
Note that this was reported by Nine and News Corp journalists as though the Coalition hadn’t been in power for six years, and hadn’t spent its first two years engaging in theatrical bonfires of regulations — all six iterations of the Lighthouses Act, out they go! — that it boasted would inject billions of dollars into the economy through savings for business.
Of course, if you actually thought about two of the major problems in the economy currently you might not think allowing business to dictate regulation was the best idea. We’ve just had a royal commission that detailed what happens when a government allows major financial services companies to regulate themselves (and whatever happened to the legislative agenda to implement the Hayne royal commission recommendations, or are we supposed to forget that now as a pre-election fever dream?)
And isn’t the east coast construction industry teetering on a precipice in which one more big construction project with major flaws — occasioned by a caveat emptor approach to building certification — will send buyers fleeing, so much so that the industry itself is calling for a more effective regulatory framework?
Still, regulation is just “cholesterol in the arteries”, eh?
Morrison actually has a list of reforms that would spur productivity and encourage investment and innovation. He asked the Productivity Commission for it when he was treasurer, and it delivered it in 2017. Virtually none of the items in today’s speech feature in the PC’s Shifting the Dial report. They focused on improving efficiency and effectiveness in health and education services, making infrastructure investments based on proper benefit-cost analysis, proper infrastructure pricing including congestion pricing, land taxes, breaking up the pharmacy racket and a carbon price (climate change being a major economic policy challenge according to everyone except the government itself).
And you can bet that Morrison’s call for industry-led deregulation won’t involve the removal of the iniquitous Anti-Dumping Commission which, as the PC has repeatedly shown, costs the construction industry hundreds of millions of dollars a year.
Instead, we get neoliberal Groundhog Day, where the same clichés we’ve been hearing for decades are trotted out, in the face of wage stagnation and industry chaos caused by lack of effective regulation. But worse, Morrison doesn’t even have the courage to push them himself. Instead, he wants business to his job of leading the country for him.
It could be a very long three years. And a lost decade of economic opportunity.