Bold reforms need big ideas and strong leadership

Anthony Albanese has emphasised his claim to the reform ambitions of former Labor leaders Bob Hawke and Paul Keating but has yet to confront the fact that grand meetings are no substitute for policy outcomes. The productivity roundtable with business and unions in August is an opportunity for the federal government to develop a reform vision that must not be missed.

In a keynote speech to the Australia’s Economic Outlook event in Sydney on Friday, the Prime Minister said he would cast a wide net for reform ideas and wanted the private sector to recapture its role as the engine room of national economic growth. With a big majority in parliament and at the start of a second term, Mr Albanese is well placed to manage change. But while welcoming ideas, Mr Albanese already is limiting its options.

He is keen to encourage debate about tax reform but reluctant to consider changes to the rate of GST. “I am a supporter of progressive taxation,” Mr Albanese told the forum. “Consumption taxes are regressive in their nature.”

Properly handled, this is not necessarily the case. And without changes to the GST the tax burden will continue to fall disproportionably on PAYE taxpayers in a way that will punish younger workers and act as a disincentive to work harder and lift productivity.

As The Australian editor-in-chief Michelle Gunn told the forum, the challenge for government is to create space for ambition. But too much of Mr Albanese’s first term was spent extending the reach of government and crowding out the private sector.

The increase in the number of federal public servants tells the story, just as the care economy has been mischaracterised as an economic driver when – even if the higher wages and additional services have public merit – it is more properly seen as an additional cost for taxpayers.

Meanwhile, the federal government remains fixated on a net-zero transition in which government increasingly is taking the risk as private enterprise heads for the exits. This includes the shift in costs from energy users to consolidated revenue through energy bill rebates and a capacity market scheme that excludes gas but guarantees profits.

On Friday, Energy Minister Chris Bowen announced another $432m to revive a green hydrogen project in the NSW Hunter Valley that was abandoned in October 2024 by Origin, a major partner. For a half-billion dollars, if successful, the project is expected to produce 12 tonnes a day of renewable hydrogen to displace about 7.5 per cent of Orica’s daily natural gas feedstock.

Proposed changes to superannuation are anti-investment and not supported by industry funds. Mr Albanese is on more solid ground with the need to reform the National Disability Insurance Scheme, which is unsustainable and represents a long-term threat to the federal budget.

The lesson is that no government can be all things to all people. Mr Albanese is right to highlight the role of private enterprise. But he must tackle the confusion at the heart of government policy. Freeing business to grow the economy requires a more flexible workplace, smaller government and less red tape. Bold reform needs bold ideas that can be explored beyond the confines of an invitation-only meeting of unions, bureaucrats and business.

As Mr Albanese acknowledged, the media has an important role to play, and we will continue to play our part.