Time for action

Saturday, 01 August 2015

John Brogden AM FAICD photo
John Brogden AM FAICD
Former Managing Director & Chief Executive Officer, Australian Institute of Company Directors

    John Brogden explains why it is time to up the ante on public policy debate and address the key national concerns facing infrastructure, budget reform and productivity in Australia.

    It is critical for Australia to engage in a proper, open and mature debate about the issues that will confront our nation in the coming decades. Our ageing population, faltering health system and flagging productivity are all examples of the challenges that will threaten our future prosperity if left unchecked.

    These are governance challenges for our nation, challenges that demand the kind of long-term focus that the Australian Institute of Company Directors’ (AICD’s) members bring to the exercise of their governance roles. I think it is entirely reasonable for the AICD as the voice of good governance to say that Australia is not well governed.

    This is not a comment about the individuals who sit in our parliaments or the public servants who run the bureaucracy. It is about our broken structure of government and the negligible appetite for reforming it.

    The AICD will be one of the 80 organisations that will attend a national reform summit on 26 August in a bid to counter the paucity of debate that is acting to the detriment of sound policy-making in these and other important areas. Leaders from a wide range of groups including the Australian Council of Trade Unions, the Business Council of Australia, Australian Council of Social Service and National Seniors Australia will also participate in the summit.

    Our members have told us they are concerned with the quality of public policy debate, flagging tax and budget reform, gaps in infrastructure and poor productivity as key national concerns. The need for urgent tax reform will be among the items high on the agenda at the summit and we have already made our members’ views on this issue clear by publicly supporting NSW Premier Mike Baird in his recent call for an increase in the rate of the GST.

    Tax reform is, without doubt, unfinished business in Australia. Governments need to listen to the broad cross-section of the community calling for a broader, fairer tax regime. Almost 80 per cent of the AICD’s members supported a change to the GST system in the most recent results of our bi-annual Director Sentiment Index (DSI), which was released in May this year.

    The findings indicated that directors believe that GST reform is the top priority for any comprehensive review of the taxation system. This was a telling indication of a widespread desire for change as our members come from all parts of the community, not just business.

    Of course any model must be both efficient and equitable for the community as a whole, and effective reform will require a focus on national priorities that transcend partisan positions. Any change to the GST also needs to be part of a broad discussion about the taxation system as a whole.

    Our attendance at the national reform summit – which is jointly sponsored by The Australian Financial Review and The Australian – is part of the AICD’s desire to represent directors on a broader range of issues than we have traditionally done. The summit is designed to influence our governments to consider long-term measures that will spur the economy, support innovation and help balance the budget. In addition to tax reform, its agenda will also include fiscal sustainability, productivity, workplace participation and retirement incomes. Some specialised policy areas, including health, education and national security, will not be on the agenda.

    This one-day summit will not produce unequivocal answers to the many complex issues that must be resolved before significant reform can proceed. But it can serve to shift the focus of policy debate from a populist narrative to one that encourages robust analysis of issues and a recognition that not all of us will benefit from every single policy measure that governments might announce.

    Indeed, our latest DSI indicated that a  remarkable 85 per cent of respondents  rate  the  quality  of  current public policy debate as “poor” and this summit is an opportunity for us to rectify this ongoing problem on your behalf. By participating in such a broad and wide-ranging dialogue, we will be able to position directors as an important voice in the debate around the policies that shape both the economic framework in which business operates and the social services that can be provided to the community. The AICD can enrich the debate through our focus on good governance and as a voice for governance leaders across the nation.

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