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Sunday, 01 November 2015

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

    Early indications show the Turnbull Government is open to change. John Brogden explains why this is vital to stimulating economic growth.

    Malcolm Turnbull’s short, sharp reform summit last month showed good government and good politics are the key to reform. In a few hours he proved he and his government were open, listening, pragmatic and committed to moving forward on reform. By conceding on super tax for high-income earners and large balances, he gave ground to the unions and the community sector on an issue of great significance to them. At the same time, business groups demonstrated their willingness not to be wedged as the voice of the wealthy and support a sensible policy outcome.

    Of lesser interest to political commentators is that he joined Labor in breaking a promise not to make any major changes to the superannuation regime in this term of government. The sheer relief that the Prime Minister has listened to the shouting from the community, business and unions and put a stop to rule in/rule out political leadership has absolved him of the sin of a broken promise.

    The government has the most to lose by opening up the debate. Their hope is that there really is a genuine demand from voters for a reform agenda to deliver growth and innovation. Certainly that is what Australia’s company directors are telling us. Yet by allowing debate on an increased GST and changes to weekend penalty rates, the government is open to a scare campaign. Reform will, and always has, required all parties to give ground. Last month Malcolm Turnbull led by example. Unfortunately, the unions walked in and out of the meeting, ruling out any changes to GST or penalty rates. It’s time for the union movement to show it is willing to explore a reform agenda by dropping their outright opposition to consumption tax and wages reform.

    Sensible discussion on some elements of wages and the workplace must form part of the debate. And leaving out the GST as part of the tax debate yet again is an act of foolishness for us all. We are now at the business end of the reform discussion. Over the last nine years we’ve been subjected to endless reviews. Surely enough research and information exists to start writing policy. It’s time to put stakes in the ground.

    The cut-through line of the National Reform Summit in August was delivered – dryly and with superb insight – by Reserve Bank of Australia governor, Glenn Stevens, when he observed that the Australian people didn’t understand what “we” mean when we say reform. But they do understand economic growth and the need for it. The only man in the room not influenced by public opinion and who cannot be directed by politicians established the objective against which the debate must be measured.

    Australians feel the economy underperforming. They know growth has slowed. Unemployment is stubborn. The sharemarket has declined. Consumer confidence is sluggish. And confidence in government is appallingly low.

    Voters will forgive broken promises if the reasons can be explained as a response to current circumstances and a demonstration they will deliver economic growth. In this environment the only option for economic growth is bold policy. Mediocrity is bad policy and bad politics. As Mike Baird has shown in New South Wales, the public can follow a cause-and-effect dialogue and will vote their support in reward.

    To put our stake in the ground, we advocate five policy solutions for economic growth:

    • A comprehensive tax reform agenda to create a more efficient taxation system.
    • Reform to the parliamentary system to provide more stability in government, including four-year terms.
    • Skills investment to support an innovative and agile workforce.
    • Productivity boosts through greater workplace participation and reform.
    • A national infrastructure plan aligned to the needs of Australia’s transitioning economy.

    Reforms focused on these key areas will provide the foundations for a more robust and flexible Australian economy that is better able to weather the headwinds before it can ultimately allow our population to prosper.

    Malcolm Turnbull has reset the environment for reform and the crowd has cheered. All stakeholders need to reorient themselves and commit to what they asked of government – an open mind.

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