Me and the Secretary of the Treasury

Oh dear. No sooner have I gone out and criticised the "reform obsessed" than I find Treasury Secretary Martin Parkinson reported as saying "we need a new wave of reform".

Actually, his speech was a lot more measured than this. In reality his address was about the need to adapt and change - whereas the old "reform" agenda was pretty much a uni-directional retreat from Keynesian intervention and pseudo-socialist state ownership and an embrace of neo-liberal market ideology.

In fact he very specifically noted that one of the challenges we face is assuming that the most urgent reforms are a continuation of those of the past , saying;

We need to continue with reforms that increase the flexibility of the economy and its productive capacity in order that people and business are able to embrace change, adapt and innovate.

There has been a lot of talk about the need for a new microeconomic reform agenda. Whether one describes it as a new reform agenda or a continuation of the existing agenda, one of the challenges we face is the assumption that the most urgent reforms are a continuation of those of the past.

Microeconomic reform needs to be broader than this.

We do ourselves, and the nation, a disservice if we target reform efforts only on the same areas as we have in the past. It is in the areas we have not yet focused on that the largest gains are most likely.

Reforms to improve the productivity of the growing health and education services sectors, and make them more responsive to market signals, make sense. This is particularly important in the areas of vocational training and tertiary education.

Tax reforms that improve resource allocation and labour mobility, make sense — especially to state taxes like stamp duty and property taxation.

Appropriate policies to mitigate climate change at minimum cost also make sense.

At the same time however, it will be important to ensure that the vulnerable and disadvantaged are not left behind as the economy advances.

All of these reforms I have listed are fairly straight forward. What has proven to be difficult in the past, and will continue to be difficult in the future, is communication of the need for, and benefits of, action. This is especially so when so many Australian workers have never experienced anything other than sustained growth.

I can see much here that I embrace - especially if we recognise the importance of ICT to achieving the reforms in education, health and energy use. These all feature highly in the #au20 National Digital Economy Strategy.

I will repeat my criticism from the budget though, that nothing ostensibly about the change to a Digital Economy is embraced by Treasury as part of the way the economy needs to change.

Policy makers need to drop the word "reform" and embrace "change". In doing so they need to develop a better view of what we are changing into not just what we are trying to change from.


Novae Meridianae Demetae Dexter delenda est

For the "reform" obsessed

Since the stunning "success" of a series of micro-economic reforms (mostly competition policy) under Hawke and Keating, and some IR reforms under Keating and Howard (the first lot)a vast array of commentators keeps braying for more "reform".

But they are never very clear about what they want. Marisse Payne writing in The Punch has at least been clear about the value of what could be called "second order Federation reforms". These are the things like national registration of the professions that reflect a twenty-first century single market in services.

Elsewhere a section of the coalition pushes with a certain zeal IR "reform". In Crikey today Bernard Keane has done a stunning job of explaining why there is simply no case for further IR reform - there is no economic upside.

Meanwhile real reform is being pursued by the Gillard Government. Reform to the fundamentals of our economy through the adoption of ICT to a Digital Economy is driven by the NBN and the Digital Economy Strategy - though incredibly under-represented in the budget papers. Reform of our energy security and the creation of new energy industries will occur through the development of a climate change policy that prices carbon.



Novae Meridianae Demetae Dexter delenda est