Summit doesn't know hype from Adam

THE 2020 Summit was to bring together 1000 of our best and brightest to discover new ideas to help make us more healthy, wealthy and wise.

The summit was founded on undue optimism.  It is, in fact, very rare that a new idea emerges that allows government to make us all better off.

And it is rarer still that the useful ideas would involve the government doing more directing, bossing and taxing.  Yet, the delegates were hand-picked to deliver a majority in favour of bigger, more intrusive government and higher taxes.

So the answer to how many new good ideas were offered is nil, nada, none.

It could never have been different.

Although new ideas are rarer than hens' teeth, there are plenty of old and well proven ideas that we could use.

The ideas that would work to lift our material well-being were best formulated 230 years ago by Scottish economist Adam Smith.

Adam Smith developed his insights by examining the success of Britain, then emerging as the world's first economic superpower.  He identified four key factors:  low taxation;  secure property rights;  freedom of people to buy and sell goods and labour without being regulated;  and an honest and impartial legal system.

In today's words this means getting government off people's backs and its hands out of their pockets.  Contrary to these prescriptions, most of Mr Rudd's elite 1000 were pushing an agenda which involves greater action by government.

In cultural terms the 2020 "Big Idea" was a massive new taxpayer funded trough for artists to tap into.  This would offer a sure-fire means of multiplying subsidies for "cutting edge" movies which receive accolades from ABC and SBS film reviewers, but which you'd have to bribe ordinary people to watch.

The better suggestions repackaged well-worn proposals.  Among these was a call for a national regime to give greater regulatory certainty for those contemplating new infrastructure investments.

I have long promoted such a policy change which is essential to curb the regulatory overzeal that is impeding investment by firms such as Telstra, Optus and Rio.

The handful of gems like that within the summit's proposals brings us back to Adam Smith.

Britain was the first country to achieve economic superpower status through adopting his blueprint of small government, reduced regulation, open trade, impartial laws and secure property rights.

Every subsequent economic miracle has applied this same formula.  This was true of Japan and Germany post 1945, the Asian tigers such as Hong Kong and Korea in the 1970s, and more recently China and India.

Reduced regulation and taxation also works for developed economies.  Such reforms have been responsible for the transformation of Ireland into one of Europe's richest countries.

So there we have it.  Combing through the work of a long dead economist could have given us all the good ideas we need.  It could also have avoided the cavalcade of new regulatory measures.  The latest of these include changes to the Trade Practices Act, which will impede firms from lowering their prices.

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