Labor and Coalition are both unwilling to tackle issues that matter

THE lack of reforming zeal in both major parties is the most depressing feature of the current election campaign.

THE lack of reforming zeal in both major parties is the most depressing feature of the current election campaign.

And with modern politics dominated by opinion polls and focus group research, it is unlikely to improve any time soon. Political courage is in short supply.

Kevin Rudd billed himself as a reforming prime minister, but there wasn't a great deal of reform to speak of. In the end it was his willingness to walk away from the one reform he was close to getting implemented -- a price on carbon -- that cost him his popularity and eventually his leadership.

Julia Gillard has found the prime ministership tougher than she expected. After cruising as the deputy for most of Labor's first term -- she was widely regarded to have been one of the government's best performers -- Gillard has come across like a footballer who wins promotion to first grade but finds the pace too quick at elite level.

It has only been in the past few days that she has steadied in the job, but that is a political improvement only. When it comes to reforming credentials, Gillard is no better than Rudd, and now she is only interested in doing what has to be done to win the election. That entails avoiding controversy, which means avoiding major reform. There is little reason to be optimistic that, if elected, she will suddenly morph into a prime minister prepared to take tough decisions.

Don't forget, when Gillard was asked in the leaders debate to name her toughest decision from Labor's first term she mentioned setting up the My School website. Setting up a popular website is an embarrassing thing to highlight as your toughest reform decision.

Tony Abbott sat around the cabinet table during the John Howard years and watched as the then prime minister and his treasurer, Peter Costello, reformed the tax system and the banking system, and set up true independence for the Reserve Bank. He even had a hand in industrial relations reforms designed to help the Australian economy compete in a globalised world. But Abbott only entered cabinet in the later stages of the second term, after the heavy lifting had been done.

Now that Abbott is on the cusp of the prime ministership he has junked his one-time commitment to IR reform, and he won't detail any plans to reform the taxation system if elected. Liberals have talked up welfare to work reforms, but ideological dogma is their only guiding principle. Such reform matters if it happens in unison with tax reform.

Timidity and political leadership just don't mix in a modern economy. We need to find the next giant of the political arena and hope that they get elevated to the political leadership of their party. There are no Bob Hawkes, Paul Keatings, John Howards or Peter Costellos left in the current parliamentary teams of the major parties, or none who have stood up to be counted. The machine men on both sides make it very hard for such figures to rise and take calculated political risks designed to promote economic prosperity.

Once this election is out of the way, no matter who wins, Australians need to make it clear they want their politicians to get back to inspirational leadership and reform, rather than a perpetuation of the politics of fear.

In this campaign, fear over asylum-seeker boat arrivals, immigration numbers, debt and deficit, and allegedly draconian industrial relations laws have overshadowed the real and substantive debates we as a nation must have.

House prices are out of reach for most Australians, yet the government provides enormous handouts for investors in the housing industry, which artificially inflates prices. Any economist will tell you a diversified investment portfolio is a must, yet the tax exemptions on the family home encourage people to put all their wealth into one asset class. Mobility is important in a modern economy, yet stamp duty and other transactional costs discourage people from selling their homes to move where work might take them. Something has to be done to correct the situation.

Infrastructure bottlenecks create concern about our large immigration intake. But without significant immigration, our ageing population could become a bubble that the taxation dollars accumulated from the younger working generations might not be able to sustain. State and federal governments need to find a way to stop blaming each other for the shortfall in infrastructure spending, and get on with preparing our cities for future population needs. Abbott, in his book Battlelines, wrote about the need to end the blame game between governments, yet he has announced nothing that will lead us in that direction if he is elected.

The Henry review had myriad reform suggestions for the tax system which would help us to be more competitive globally, but the government ignored most of the suggestions and only zeroed in on the mining tax. The whole point of Henry's mining tax was that it could be used in conjunction with a host of other reforms to income tax, company tax and so on. All Labor gave us was a minimal 1 per cent cut to company tax and modest super changes, which are really a cost for business.

Abbott has at least said that if elected he would want to host an equivalent of the 1984 tax summit, but unless he gives us more detail on what he would like to get out of it, he won't have the mandate to vigorously pursue major changes.

The major parties have become less adept at working together in modern politics, choosing instead to take partisan opposition to a new level. Labor did it to the Coalition between 1996-2007, and the Coalition did it to Labor over the past three years. In the next parliament the Greens will probably hold the balance of power, and we know how obstructionist they have been. With the exception of their worthy policy of a sovereign wealth fund to help with government spending after the mining boom dies down, the Greens are unlikely to constructively add to the debate over major economic challenges. Gridlock and inaction could be our future.

That means the major parties need to start working together to lock in future productivity, economic growth and reforms, just as they did in the 1980s. If they don't find common ground in key areas to help promote future prosperity, the next 10 years will come to be known as the lost decade.