I was one of the panelists for the wrap-up session of this (always excellent) conference. It focussed on the political difficulties of reform today and the rise of populism. Other panelists were Paul Kelly, Jennifer Westacott, Glyn Davis and Melbourne Institute Director Abigail Payne. The session was chaired by David Uren, who wrote an overview piece about the conference in The Australian on Tuesday 18 July.
In my remarks I agreed that reform is undoubtedly a more challenging proposition these days. The politics are tougher, the media less supportive, the public less trusting. And howls of protest greet any initiative that has a hint of a loser.
But real reform has never been easy. Before giving up we need to ask if we have been trying hard enough. According to a major OECD study, success depends on solid preparation, extensive consultation and effective political selling. These have been lacking in more recent times. Underprepared policies are being foisted on an unprepared public. As a result there has been a succession of policy misfires and reversals in Europe and North America, and not least in Australia.
Take tax. A big ticket reform item like the GST was abruptly raised here and just as abruptly dropped, without explanation. Corporate tax reform has been heavily compromised. Personal income tax rates have been going the wrong way. And then we get a distortionary tax on selected banks literally out of left field.
Much public policy is being made on the run, when it needs more than ever to be well prepared and properly justified and explained. The table tells the story. As a consequence, too many policy and reform initiatives are failing the dual test for 'success' of (a) being likely to do good and (b) being accepted as such by the community. As noted both in David's article and at conference, if this doesn't change it is hard to be optimistic about Australia's future living standards. While the environment for reform is clearly more challenging, that is unlikely to change. The only way forward is for governments to lift their game.