Rod Sims names Labor’s 2028 policy priorities with tax reform at the top

Labor already has a strong platform for policy reform and can go even bigger when it next faces voters in three years time, argues former ACCC chief Rod Sims.

Prime Minister Anthony Albanese Picture: NewsWire / Martin Ollman

Former competition regulator head Rod Sims has urged the Albanese government to campaign on a carbon price and tax reforms at the 2028 election, while tapping its newly won mandate this term to boost productivity, project approvals and fix a wayward electricity system.

Mr Sims, an expert adviser to Treasury’s Competition Task Force, has issued an eight-part plan for reform after Labor’s thumping election win a week ago.

Both Labor and the Coalition were criticised for a lack of policy ambition during the campaign, amid frustration tax reform was discarded from the agenda.

Mr Sims argues taking a reworked carbon price to the next election would boost productivity and help finance true tax reform should Anthony Albanese win a third straight term in office.

“What about tax reform,” Mr Sims writes in The Australian. “It is true that the government does not have a mandate for this. It should go to the 2028 election seeking such a mandate. But serious tax reform needs to be paid for. The best way to do this is via a price on carbon to compensate for the damage fossil fuels do to our environment.”

Treasurer Jim Chalmers has signalled no quick fixes to address productivity reforms. After initially pledging Labor’s second term will focus on productivity without forgetting inflation, the Treasurer told Nine newspapers a third term would be needed to deliver progress on productivity.

Mr Sims and economist Ross Garnaut first proposed a carbon tax a year ago in a bid to raise hundreds of billions of dollars, but Labor and the Coalition both rebuffed the idea in a rare bipartisan move on climate action.

Business leaders, miners, oil and gas companies have previously declared the climate wars were over and pointed to the government’s safeguard mechanism as a policy to drive down emissions.

Even so, the former ACCC chair said the concept would stack up at the next election.

“The proceeds cannot just compensate households, they can also finance true tax reform and make it saleable to the electorate. Those who want true tax reform should get behind a price on carbon. The boost to productivity will be huge.”

Former competition regulator head Rod Sims. Picture: NewsWire / Martin Ollman

Australia is in the midst of its worst labour productivity levels on record, falling 1.2 per cent in the last year with average productivity growth over the past decade hitting its lowest levels in 60 years.

The ex-competition tsar said action must be taken.

“The government does not lack a mandate for reforms to boost productivity. But it now needs to act on its mandate,” Mr Sims writes in The Australian.

Moves to drive productivity including harnessing digital technology, innovation, skilled workforce, and the net zero transformation must now be acted on to deliver tangible benefits to the economy, he said.

Major Australian corporates including Rio Tinto, Wesfarmers, NAB and Alinta have already demanded Labor use its crushing election win to boost productivity amid ongoing concerns a fractious global trade war threatens momentum in the nation’s economy.

Mr Sims also singles out another common complaint of big business, the slow approvals process for projects.

“The government has promised to expedite project approvals, and it must act on this in a significant way. It is frankly a disgrace how long approvals take for major projects in Australia. Projects can be approved or rejected, but it is a policy failure that such processes take many years,” said Mr Sims, who also chairs the green energy-focused Superpower Institute.

Fixing the electricity system through a review underway this year was also named as a key area for reform amid fears over a poorly managed transition to renewable energy.

“Our electricity market is a mess at the moment, given the current range of arbitrary interventions, so the government now has the opportunity to fix it,” he said.

Tweaking settings to cut domestic gas prices should also be a priority for Labor.

“Australia has by far the highest domestic gas prices of any gas exporting country; this must change, and the government has the ability to make this happen.”