The Abbott Government has established a plethora of reviews covering a multitude of issues. Off the cuff they include Energy, Renewable Energy, Education, Defence, Competition, industry and yesterday we had a Green Paper on Agriculture released.
Some of the reviews – that on Agriculture being a prime example – are nothing more than wish lists. The agricultural green paper wants less regulation except where regulation might strengthen farmers’ hands: getting mining royalties, subsidising energy audits, bashing Coles and Woollies, concessional loans. The green paper also seeks expanded roles for the bureaucracy with counselling, debt mediation, and additional regulatory codes.
Barnaby Joyce picked the best eyes out of it, giving a heads-up to Sid Maher in which he identified 27 new dam prospects, an anathema to a bureaucracy with a thirty years of opposition to these.
Last week’s release was the Industry Innovation and Competitiveness Agenda. Its focus is on deregulation, skill formation and programs for skilled worker employment and investor immigration. It restores the conventional and generally available R&D support that Labor took from major companies, and re-establishes incentives for employee shares ownership.
The spending showpiece is $35 million a year for five new growth centres covering food and agribusiness; mining equipment, technology and services; oil, gas and energy resources; medical technologies and pharmaceuticals; and advanced manufacturing.
If this money is to be wasted it is at least an improvement on the $60 million a year for 10 “Industry Precincts” under the Gillard Government’s Australian Industry Participation Plan (AIPP). AIPP was also to include a $378 million venture capital finance facility, tailor made, like the Industry Precincts, to be headed by socialist luminaries who would fritter away the money in vote-buying failures.
More insidiously, Labor’s AIPP also brought massive new red tape to force major project firms into high cost local sourcing and it embarked upon a new aggressive anti-dumping program designed to ferret out area where overseas suppliers are just too competitive. Naturally, these aspects were greeted with warm applause from union chieftains, including Paul Howes, who saw it as a means of wresting back some of the jobs their cost-inducing industrial policies had destroyed. Deloittes in its client advice struck a sober note, saying, “major project proponents should not underestimate the significance or resource commitment of being required to submit and report on an AIP Plan”
The famous five new growth centres identified by the Competitiveness Agenda appear to fit with general perceptions of ideal Australian development (though “advanced manufacturing” in spite of its evocative title seems to cover everything from robotics to “sustainable green processes”). The problem is that the committees judging the beauty contests of worthy ideas and paying for them with Other People’s Money so often underperform and tend to be swayed by fads and political considerations. And that outcome remains likely even though the Liberals generally avoid Labor’s policy of appointing political time-servers onto such committees.
On a more positive note, the Competitiveness Agenda’s subsidy scheme is placed within a supportive framework that seeks to lower costs rather than increase them. And Josh Frydenberg, the Parliamentary Secretary for deregulation has focussed attention on aspects of the policy that promote this. He has claimed savings of $700 million a year with 10,000 regulations abolished from his first announced regulation cut. In foreshadowing further cuts, he instances 140 pieces of legislation burdening the plastics industry.
Mr Frydenberg also said the government will avoid duplication and recognise overseas approvals for chemicals and pharmaceuticals. Such a process was recommended in a 2008 Productivity Commission report but its antecedentary reaches back into the 1980s, when, as head of the Office of Regulation Review, I made the same recommendation in two reports to government. Nobody put a cogent case against this but political and bureaucratic interests ensured that, 25 years later, the same proposals emerge. Time will tell if Josh Frydenberg has the clout to ensure his proposals are followed through.
Time will also tell if all these reviews achieve mutually consistent outcomes.