James Campbell: It doesn’t pay to flirt with bad policy ideas
The government is mad to flirt with 1960s-style regulation when it has no intention of following through. If you can’t or won’t fix a problem then you’re wise not to talk about it, writes James Campbell.
James Campbell
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A frequent criticism of the Morrison Government since its surprise re-election five months ago is that it lacks an agenda; the idea being that beyond being returned by the Australian people with a clear mandate not to be Bill Shorten, the shelves of the policy cupboard are fairly bare — especially now it has passed the tax cuts it unveiled in its pre-election budget.
To be sure there are some good and useful reforms we know it wants to achieve — the introduction of a fit-and-proper person test for trade union officials and improvements to the Family Court, to name two — as well as others such as its religious freedom legislation which are of limited interest to most people but matter a great deal to the interested parties.
But leaving aside its “big stick” legislation which gives government the power to break up energy companies if they are found to be abusing their market power, there isn’t a great deal happening that would make anyone think this is a government interested in reform in the way the Hawke, Keating and Howard governments were; that is to say exposing Australians to market forces.
Indeed if you listen to the rhetoric from government ministers, you might think it is keener on regulating than deregulating the economy.
On Monday, Treasurer Josh Frydenberg announced he was directing the Australian Competition and Consumer Commission to probe banks big and small. In addition to investigating the prices charged for residential mortgages, the ACCC has been directed to consider “how banks make pricing decisions, including passing on movements in the official cash rate”. I don’t know about you, but I think I can answer that one myself. I reckon they take into consideration how much they are paying themselves to borrow and then they set their lending rates at a number they reckon they can get away with.
What is more — and I’m really going out on a limb here — in setting their prices I reckon they might keep a close eye on what their competitors are charging. It’s just a theory mind you. I haven’t got the benefit of the “$13.2 million of dedicated funding to undertake regular inquiries into specific competition issues within the financial system” that Josh has given the ACCC.
Frydenberg isn’t the only Morrison Government minister keen to get an agency report explaining why the sun comes up in the east and sets in the west. A couple of weeks back, Energy Minister Angus Taylor appeared shocked to discover that petrol prices are perhaps not a perfect reflection of the world price for oil.
Petrol companies “should be doing the right thing by consumers,” he told Sky News Australia’s Paul Murray, adding “it’s time to have a good, hard look at what’s going on”.
To that end he had been assured by the ACCC that over the recent long weekend in NSW “they’re going to be looking at the prices very closely”. And if the ACCC decides price gouging was occurring at the nation’s petrol stations, what would happen then?
According to the minister there will be “further investigations” and “if appropriate” then “action taken”.
What, one wonders, will that action be. Is Taylor going to start setting petrol prices? Is Frydenberg going to start setting mortgages rates? And while we’re about it, why stop there?
I don’t know about you but I’ve noticed that airfares go up at Christmas and school holidays. And in my experience, that happens every single year without fail. I really think it’s time the ACCC looked into that one too.
Then there’s the cost of wine. Have you ever noticed how it tends to cost more at restaurants than it does at Dan Murphy? There’s another market outrage right there for them to get their teeth into.
Really, when you think about it, the opportunities for government regulation are endless. And while you can mock Frydenberg and Taylor for raising public expectation of actions which they have no intention of following through on, there is a dangerous side to their posturing. Because the fact is that the deregulation of Australia’s economy was a hard-fought battle that was won by reformers in the teeth of public opinion.
If it had been up to the voters, we would still be living in Black Jack McEwen and Robert Menzies’s Australia, with tariffs walls, a national wage case, a fixed exchange rate and a two-airline policy. Nothing would have been privatised and Josh Frydenberg would actually have responsibility for setting interest rates as his predecessors did in conjunction with the Reserve Bank.
Now you can say that we could never go back to that world and you would be right — we won’t go back to the 1960s, lock stock and protectionist barrel. But in these populist times it doesn’t do to flirt with bad policy ideas, because if you do and then don’t deliver, there will always someone else to exploit the opening whether it’s an economically populist Labor Party from the Left or Pauline Hanson from the Right — who I should note in passing is busily trying to re-regulate milk production.
If you can’t or won’t fix a problem then you’re wise not to talk about it. You might have thought that of all people Taylor and Frydenberg would be living by this maxim given they have both had the job of energy minister, which, ever since Malcolm Turnbull nationalised the political problem of power prices, has been Canberra’s problem and one for which there is no solution in sight.
James Campbell is a Herald Sun columnist