Prime Minister Kevin Rudd likes to talk about the tough decisions he's making and the reforms he's pushing through. And the Prime Minister is promising more tough decisions and more reform in areas like tax, corporate governance and financial regulation. But what we've discovered this week is that under the Rudd government the reality of reform doesn't quite match the rhetoric.
On Wednesday the government announced two decisions. The first was to block the building of a new dam in Queensland; the second was to maintain the ban on the importation of cheap books from overseas.
None of this bodes well for future reform efforts. At the first sight of political difficulty (or in this case, unhappy greenies and grumpy authors) the government caves in.
The stimulus package was about spending a great deal of money, quickly, but it wasn't reform. Building school halls is not a revolution. Re-regulating the economy by abolishing WorkChoices and imposing an emissions trading scheme is not reform. And if you're a Telstra shareholder, you wouldn't call it reform if the government cut your company in half.
The decision on books was especially bad. If ever there was a clear-cut case for the benefits of competition, books was it. Less expensive books are a good thing: Australians shouldn't be forced to subsidise the income of local writers whose works they don't read.
This was the logic of the Productivity Commission and Craig Emerson, the Minister for Competition Policy. Emerson lost, but as one of the few people in the ministry who genuinely believes in the benefits of competition, he deserves credit for fighting to the bitter end.
In opposition and then in the first few months of being in office, Labor ministers made many fine speeches about reform. In April last year for example, the Minister for Finance and Deregulation, Lindsay Tanner, spoke eloquently about the evils of what he labelled "producerism". His words deserve to be quoted at some length: "Producerism exists wherever the state implements regulatory and ownership arrangements that favour or protect particular groups at the expense of society as a whole. Tariffs, monopolies and other distorting regulatory regimes are the most obvious examples of the producerist philosophy at work ... But producerism is more than just economic protectionism. Producerism is a hallmark of a closed society ... Every regulation needlessly protecting business from competition is a regulation driving up prices and hitting those with the least capacity to pay."
A year on, this soaring rhetoric can be compared with actual results. A few weeks ago, Tanner provided a handy checklist of what he described as the government's "significant reforms". These included: the introduction of new product disclosure statements for financial products; the effective corporatisation of Medibank Private; streamlining the approval of property purchases by foreigners; the removal of the restriction on the number of collection centres pathology providers can operate; and the abolition of the wheat single desk. Only the last one could properly be described as significant, and it was the only measure that faced any sort of substantial opposition.
Treasury secretary Ken Henry recently tried to claim "there is, domestically, a strong appetite for further policy change". Unfortunately Henry is wrong and nothing could be further from the truth. As Rudd and Henry urge Australians to confront the challenges of an ever-expanding population, the government seems intent on ensuring that future generations don't get to have the sort of quality of life enjoyed by the current generation.
In the past two decades, the population of south-east Queensland has grown by more than 1 million people without any corresponding increase in available water. The country's fastest-growing region now faces the possibility of running out of water. Just last month Rudd was talking about how "we must prepare for fresh water supplies coming under increasing pressure".
Queensland will now probably end up having to pay for desalinated water, which is more expensive and arguably more damaging to the environment than a dam would have been. And when its state budget goes further into deficit from building desalination plants, it will be federal politicians who will be the first to complain at the profligacy of state governments.
So far the government has done lots of things -- but not many of them can be called "reform".
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