YOU can put down the binoculars, this race is over. It is time to think about what the Abbott government needs to do in order to create the prosperous Australia that its leader is promising.
The business of repairing the federal government’s own accounts will be long and gruelling, but it is not the same as building conditions for wealth creation. The ease of doing business in Australia is declining. This decline must be reversed.
The Abbott government needs to work on two tiers – in two teams – to reverse the decline. In order to remain in government, the first tier must repair the budget and solve important headline issues such as boatpeople and abolishing the carbon tax and allied programs. The second tier must work away in the background, reinventing government.
Government is not simply a cash cow for electoral sweeteners, nor is it a Keynesian plaything. Its major purpose should be to assist where the market and individuals cannot reasonably be expected to cope: call them market and personal failures.
Where these are not warranted, it should get the hell out.
This story is about the second tier, the second team of government, “young turks” in the parliament who need to devote the next six to nine years to reinventing government. These members may not have to perform daily in front of the cameras and microphones battling the headlines, but they must steer culture change within the partyroom. They will come from the likes of members such as Jamie Briggs, Paul Fletcher, Alex Hawke, Kelly O’Dwyer, Christian Porter, Scott Ryan, Tony Smith, Alan Tudge, Ross Vasta and many others.
The question these politicians have to ask themselves is, can a politician build a career on this agenda? My plea to these members is that such work is not the graveyard of ministerial ambition. It is not the Public Works Committee or the Speakership route. It is possible to build a great reputation by doing the work that the nation needs to create wealth. Getting government off the back of business and workers is the work of saints, but the rewards can be earthly.
The order of business for the second tier is to understand the electoral and economic risks and rewards in three areas – taxation, federal responsibilities and business (including employment and finance) regulation. The first risk to be minimised is by not waiting for some inquiry to recommend answers. In taxation, courtesy of the Ken Henry review and many others, the results are in.
The issue for the turks is whether the pain will be worth it. Will tax change behaviour in the economy, or is it simply about revenue for government? If it is the latter only, then forget it. Leave it to the first team.
As for federal responsibilities, all federal programs that could, with strong contractual and fiscal incentives, be run by states should be run by states. In other words, there should be no federal programs in health and education, and no departments. Funds should be allocated to the states and performance against negotiated criteria should determine funds. The federal government adds precious little in these fields. Fight the first team on this one.
The most important area for the young turks is regulation of business and finance, including employment. Senator Arthur Sinodinos, chairman of the Coalition’s deregulation taskforce, launched the Coalition’s policy on the issue last month. Tony Abbott is to establish a deregulation unit in the Prime Minister’s Department to “set out an agenda over the first six months that would lead efforts to reduce red tape and green tape over three years”.
This is a good start, but it could be terribly bureaucratic. Movements for change need champions, not deregulation units. There must be young turks in the partyroom who are prepared to spend the time in the centre of the machine, grinding away at regulations (and “business support programs”), calculating the political risks of freeing business from rules that cause them to employ less capital and fewer people on productive ventures. Fight the first team on business support programs. Lead them on deregulation. The Productivity Commission has a decade of recommendations ready to work on. The Business Council of Australia’s call to refresh significant regulations from first principles is also good, but it can load up the public service. A bit like the plain-English rewrites that various attorneys-general were sucked into, rewriting regulations may simply mean more work and fresh legal interpretations, but little change to behaviour on the ground.
Remember Lindsay Tanner was minister for finance and deregulation – and oversaw thousands of new regulations. Do not let this happen again. Tony Abbott has vowed to devote two sitting days a year for repealing unnecessary or counterproductive legislation: make it 365 days a year. Go to it, young turks.