Now, I want to ask another: what temporary policies will best serve the restoration of commerce once the present emergency passes that is politically viable?
One mistake often made by Cats and even more by other commenters is that regulations that do not involve the collection or disbursement of money by government are costless: nothing could be further from the truth. Typically such regulations are outright prohibitions, barring all trade in certain commodities or at certain prices. Now there are some trades that deserve outright prohibition: contracts to murder should not be upheld. But generally, we can infer that the gains from trade from any transaction satisfy both parties. Yet for complex reasons of political economy, we have inherited an extensive body of regulation. In particular, over the past few decades, we’ve accrued a substantial body of ‘regulatory kludge’. Now is the time for a clean out, to stop it becoming the brake on recovery.
My starting suggestions are:
- Suspension of ‘responsible lending’ requirements for consumer lending and guarantees for a year
- Suspension of retail tenancy ‘protective’ legislation for leases of up to a year, for 2 years
- Suspension of unfair dismissal law for newly hired staff for one year from the date of hiring, with the restoration, if it occurs, to be staggered by employer size to avoid further shocks to the labour market
- Reinstating the ‘accountants exemption’ for financial advice
- Full portability of planning approvals
- A prohibition on the use of planning approvals that have the effect of substantially lessening competition.
- A balanced budget amendment, to take effect 3 years from the end of the crisis
- Price level targeting by the RBA.
Proposals should not require substantial tax collection or payment.
Over to you.