During the past eight years the coalition government can claim some important successes. Financial management has been sound with the economy undoubtedly in a better condition than in 1996. Growth has not just been fuelled by some fortuitous raw materials boom or a buoyant world economy.
The Asian economic collapse and the terrorist attacks of 2001 had a more dramatic effect on Australia than did the fall of the Berlin Wall. But the coalition's ambitious international agenda has deflected its attention from a domestic program.
There is a sense that the coalition has lost its appetite for bold measures. It is not that the government has been without policies far from it. It is just that by the time many of its policies are implemented they are completely compromised.
After some early defeats in the Senate the coalition abandoned efforts at fundamental reform and opted for incremental change. But in policy terms merely tinkering at the edges can sometimes make matters worse. This is exactly what has happened, particularly in the area of corporate law.
If former industrial relations minister Peter Reith's original plan had been put into effect we would have gained a deregulated labour market. In 1997 the coalition considered a double dissolution to get the legislation through but decided the risk wasn't worth it. Seven years later the product of that decision is a labour market that is more centralised than that of even New Zealand.
Likewise the GST. The government's original idea of using a consumption tax to fund a wholesale reduction in personal income tax, and aligning the top marginal personal rate with the corporate rate was a good one. Instead the deal with the Democrats produced a new tax with additional regulation but without any substantial change in tax rates.
Last weekend the Australian Financial Review published its survey of the opinions of 17 chief executives of major companies. (AFR, August 7-8). About half said the government had run out of ideas and was suffering reform fatigue.
Here's an outline for a real reform agenda:
TAX
Start again. Regard the tax system as a way to encourage enterprise, not as a mechanism for government control over taxpayers' lives. Align the top marginal personal tax rate with the company tax rate at 30 per cent and increase the tax-free threshold to provide incentives for individuals to move from welfare to work. This can be funded by a combination of expenditure reductions and if necessary an increase in the GST rate. This would require an end to the automatic payment of GST revenues to the states.
INDUSTRIAL RELATIONS
Back to basics. Reinstate the principle that individuals should be free to enter voluntary contracts, and should be bound by them. Abolish the Australian Industrial Relations Commission. Expand the coverage of Australian Workplace Agreements, with their enforcement being the responsibility of the federal court system. Abolish the current unfair dismissal legislation and allow the conditions for termination of employment to be the subject of agreement between employer and employee.
BUSINESS
Encourage it, not persecute it. As the side of politics committed to free enterprise the coalition should suppress the urge to join unions and certain talkback radio hosts who attack business at every opportunity. The government should not allow its agencies to engage in gratuitous assaults on companies or involve themselves in general politicking. The approach of the Australian Competition and Consumer Commission has done much to injure the public's attitude to companies. Either reform the ACCC to limit its powers and restrict its anti-business campaign's or abolish it. Tax legislation needs to be simplified. It is so complex it can't be understood by taxpayers and allows the ATO excessive discretion.
CORPORATE REGULATION
Trust the market. Re-establish the principle that the primary responsibility of a company is to its owners it is not to the community and it is not to stakeholders or interest groups. Scrap Clerp and the Financial Services Reform Act.
SUPERANNUATION
It's a failure. The area is complex, confusing and over-regulated. Attempts to raise the national savings rates have been compromised by successive governments regarding superannuation as an area for revenue raising.
MEDIA
Another shambles. Apply one simple principle the only role for government in the area is to help lower the barriers to entry of new players. It is not the job of politicians to decide how many television stations there should be, what they can broadcast, and when. The growth of new media is making the cross-media ownership laws obsolete and they should be scrapped, as should local content regulations. The rest of Telstra should be sold with the money used to retire debt. As long as the ABC remains in public hands it will continue to be accountable to no one but its own staff. The coalition should either sell the ABC or stop complaining about its bias.
INDIGENOUS AFFAIRS
Continue reform. Make reform on the basis that practical reconciliation will make meaningful improvements to people's lives whereas symbolic reconciliation won't. There should be a shift of emphasis away from providing native title to communities towards having individuals possess freehold title, which they can buy and sell, and borrow against.
WELFARE
Full of contradictions. Decide that the objective of welfare policy is to have every person who can work in work. The introduction of Work for the Dole was a worthwhile first step. If the incentives are right individuals will leave welfare for employment. While in the short-term at least welfare reform could cost money, substantial savings can be made through the abolition of many measures of middle class welfare, for example the baby bonus.
In conclusion, there is no doubt that if the government controlled the Senate many of these policy ideals would now be in legislation. But the existence of the Senate cannot continue to be used as an excuse to avoid reform. In any case a double dissolution is available to a government that can't get its legislation passed. Given that the coalition is unlikely to win a Senate majority in the foreseeable future, the question the government has to ask itself is, what is it willing to risk for real reform?
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