The Libs have been handed a golden opportunity. Now, watch them stuff it up
One of the great entertainments of political commentary in Australia over the past decade-and-a-bit has been speculating on what new and inventive way the Liberal Party will find to comprehensively bugger itself up. I can't help thinking this must have crossed Treasurer Jim Chalmers' mind as he fronted the National Press Club this week to announce that he will undertake a process to develop a new productivity agenda.
Chalmers' speech was solid, but then so it should be after so many have said the same things so often to so little avail. His words and aspirations have been written for him many times over, sometimes with hope, other times with emotions ranging from dull rage to despair. Sometimes even by the Coalition. We need productivity reform, politicians all know we need it, the media all know they know we need it, yet no-one ever does it. There's a simple reason for that: it's hard.
The treasurer dwelt in his speech on why it's hard. Reforming an economic system requires trade-offs. Some choices will cost some people. They may or may not be recompensed in the rejig. Chalmers doesn't want the media to simplify economic reform by explaining it in terms of 'winners and losers', as they do after each budget, but there will be winners and losers in the short, medium, or long term as a result of any new tax system.
And, naturally, the opposition will do what the name says on the tin. It will oppose. Given the last years of Liberal shenanigans, the real question is how it chooses to do that.
In one scenario, Sussan Ley leads a team which analyses and criticises the government's productivity proposals to ensure the best outcome for Australia and Australians. Should they choose this version of their own adventure, there will be plenty of material to tackle.
The prime minister has already shown that he has no instinct for making business more efficient or even any understanding that a healthy economy relies on the private sector, creating new wealth instead of just shifting existing money around. In the first term of the Albanese government, the size of the public sector grew relative to the size of the private sector, so now each private employee is supporting more public sector salaries.
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Then-employment minister Tony Burke passed through an industrial relations bill which makes it harder for businesses to scale up without locking themselves into costly arrangements. Meanwhile, the 'Future Made in Australia' slush fund has been 'picking winners' (code for government making decisions on industries it poorly understands) by investing in bringing in an overseas quantum technology firm rather than backing existing quantum technology firms – ahem – made in Australia. Labor is even trashing its own legacy by changing the rules on the superannuation system it forced people to contribute to, undermining trust that the money you lock away for retirement is really yours for later.
It's hard to see how a government which made policies of this sort a priority and prefers the public to the private sector will back a productivity agenda which turns Australia around. But one of the great paradoxes of politics is that sometimes you need the party which is seen to be the touchy-feely side to deliver hard-nosed decisions. Think Labour prime minister Tony Blair in the UK, Democrat president Bill Clinton in the USA, or chancellor Gerhard Schroeder in Germany, all of whom delivered welfare reform in the face of their countries' badly designed benefits systems, which were creating disincentives to work.
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