Yesterday there was a report in the Australian that seemed somewhat strange:
An unprecedented gathering of business, union, community and policy leaders next month will chart a consensus approach to tackling the major issues facing the national economy and federal budget.
The one-day National Reform Summit supported by The Australian and The Australian Financial Review — collaborating for the first time — will seek to rise above the partisan politics that have stymied crucial fiscal reform.
Hardly unprecedented – there are academic conferences (in every meaning of the term) all the time. Today an op-ed in the AFR* provides more detail – and establishes the underlaying agenda:
Earlier in the year this columnist argued the case for a National Reform Summit to help bridge the political divide in Canberra by finding common ground on a new economic reform program (“Leaders’ consensus needed to shape economic reform”, AFR March 3). Agreement has been reached now by business groups, the ACTU and the community sector to pursue this worthy goal at a summit on August 26. The idea is to make good reform easier and opposition to good reform harder. If one or the other of the main political parties adopts a reform agenda based on agreement by representatives of a broad spectrum of the community at the summit, it will know it has a strong alliance backing it. Conversely, if the rival party seeks to oppose the reform program in an effort to harvest votes, it will struggle to find credible allies to help it prosecute the anti-reform case.
Well, yes. Just who are these community groups?
the Australian Council of Social Service, the ACTU, the Business Council of Australia and the Australian Chamber of Commerce and Industry and the Australian Industry Group, and seniors groups …
Some of the nation’s leading researchers and policy experts — from think tanks including the Grattan Institute, the Menzies Research Centre, the Chifley Research Centre, the McKell Institute, the Centre for Independent Studies and the Melbourne Economic Forum — are preparing preliminary position papers which will underpin the summit debate.
So let me make some predictions; an agenda to increase the GST, increase taxation on superannuation, increase the tax burden on “the rich”, and increase welfare spending will emerge from this conference.
To be fair idea generation is important but this conference is very different from what it hopes to be:
When Bob Hawke convened a national economic summit shortly after coming to government in 1983 he had backing him a broad community consensus that the economy was in trouble and Australia needed to face outwards to Asia. It was on this basis that his government implemented a successful reform program.
That is a very big difference – Bob Hawke drove the process last time. As far as I can see Tony Abbott isn’t invited and isn’t involved. To the contrary this process is largely being driven by ALP figures and ALP-aligned or ALP-funded organisations.
I did have a bit of a chuckle when I read this:
Large sections of the media enthusiastically hand vested interests a platform and a megaphone simply to boost their readership or audiences.
Large sections of the media – like the Australian and the Australian Financial Review? (I have subscriptions to both).
Vested interests – like the Australian Council of Social Service, the ACTU, the Business Council of Australia and the Australian Chamber of Commerce and Industry and the Australian Industry Group, and seniors groups?
Then I got a bit annoyed when I read this:
Yet in Canberra we had a budget emergency in 2014 but now we are expected to believe it is under control and the budget is on a credible path back to surplus. That path relies on a return to trend economic growth, and then some more, not by forecast but by assumption. It relies on Australia’s falling terms of trade stabilising at more than 20 per cent above their long-term average. It requires bracket creep to collect a rising share of the declining real incomes of Australian workers. And it assumes a resurgence of productivity growth, which it simply not occurring. In fact, by the broadest measure of productivity – multifactor productivity, which reflects technological progress – we are less productive today than we were a decade ago
I actually don’t disagree with that statement – in fact we here at the Cat have been criticising Wayne Swan’s bugdgeting process and assumption driven management for years. We have criticised Joe Hockey for his Swanesque approach to economic management too. Yet it is very rich coming from a man who was in government, and in the cabinet, when Australia abondoned the sound fiscal management of the Howard-Costello era and embarked on this strategy.
* This is not an invitation to launch into Craig Emerson – his singing abilty is terrible – let’s rather focus on the substance.
Update: It occurs to me that those organisations that opposed the mining tax and the carbon tax have not been invited to attend.