Chainsaw reform or cordial experts? Roundtable outcomes in spotlight
Former prime ministerial adviser Maurice Newman, who attended a competing economic reform roundtable hosted by senator Matt Canavan on Wednesday, said Australia was facing such a bleak future on productivity that he was in discussions to bring out chainsaw-wielding Argentinian reformer, President Javier Milei to fire up stakeholders.
Former Treasury secretary Ken Henry, who described the last two days as “remarkably constructive” was circumspect when asked on Wednesday if the roundtable was enough to produce the kind of outcomes needed to lift 60-year lows in productivity.
“We’ll just have to wait and see,” Henry said. “We do have the session on tax reform tomorrow.”
Henry has criticised the Albanese’s government’s plans for a new tax on unrealised capital gains, and has been pressuring the government to reform the Environment Protection and Biodiversity Conservation Act.
Commonwealth Bank chief executive Matt Comyn, who has said corporate tax reform was not a priority, said he didn’t think participants were holding back because of the privilege of being under the Albanese tent on reform.
“It has been said multiple times that people can say what they think. I haven’t had any issue with that,” Comyn told The Australian.
Billionaire Atlassian founder Scott Farquhar said, “I’m not sure I have a good answer for you on that,” when asked about whether people were holding back because of the having the privilege of sitting in one of the 23 golden ticket seats in the cabinet room.
Another participant told The Australian, on background, that “the way some of us are feeling is that ‘this is my seat’ and ‘I have got buy-in now” and they didn’t want to jeopardise that by being too forceful.
Even the likes of opposition Treasury spokesman Ted O’Brien, who Chalmers implied was at risk of being a deliberate agitator, has been, for the most part, constructive and cordial.
But back to Newman, who famously paid for neoclassical economist Milton Friedman’s first trip to Australia in the early 1970s to inject some economic realism into an economy that had been subject to Gough Whitlam’s big-spending interventionism.
“I did that because I had become extremely concerned with the direction Whitlam had taken the economy,” he said.
Whitlam’s government’s spending as a share of GDP rose to 24.8 per cent in 1975, from 18.9 per cent in 1972.
Treasury expects that current government spending as a percentage of GDP, outside of the Covid stimulus, will hit the highest level since 1986 at 27 per cent of GDP in 2025-26.
“We need a catalyst for reform,” Newman said.
“Someone like Javier Milei is the sort of person you need. We are working on bringing him out to Australia.
“Milei got all the criticism in the world but he is getting results. Inflation has come down under him, and his government is spending less and getting economic growth.”
Newman said on Wednesday that he thought Friedman didn’t find a lot of friends in Australian government circles but he apparently found some favour in then treasurer Bill Hayden.
Savings slip highlights unanswered questions in Silver review response
As the high-profile participants of Jim Chalmers’ economic reform roundtable visited the Prime Minister’s Lodge for wine and cheese on Wednesday night, few could answer whether or not this group of hand-picked experts would be enough to push the government into the sort of reform needed to fix Australia’s dire productivity.