Why the three-day roundtable won’t deliver a knockout blow
Yet the three-day economic reform roundtable in Parliament House is unlikely to be a bloodfest.
The first rule of this refined Canberra fight club is that everyone speaks respectfully about productivity and puts the national interest above self-interest.
That’s certainly the vibe of an event where, aside from welcomes from Anthony Albanese and Jim Chalmers, the three star turns will be conventional econocrats Reserve Bank governor Michele Bullock, Treasury secretary Jenny Wilkinson and Wood.
Still, the commission has led with its chin, while launching several roundhouse swings on carbon pricing, company tax, and regulating artificial intelligence.
An economy-wide market mechanism for reducing greenhouse-gas emissions as Wood favours, beloved by mainstream economists, is a political step too far amid a fresh skirmish in the climate wars and the traumas of Julia Gillard’s carbon revolution.
Big business is railing against the commission’s fiscal radicalism in a proposal to cut the company tax rate to 20 per cent for 99 per cent of businesses (and with all firms paying a new 5 per cent cashflow tax that allows immediate expensing of capital outlays). A proposal to water down local copyright protection to enable AI disrupters to have their way with the intellectual property of creators has also faced widespread opposition.
In a speech on Monday at the National Press Club, Wood brought together the themes of the commission’s five interim reports on the pillars of prosperity under the “growth mindset” banner. “This ‘growth mindset’ – an elevation of growth and the benefits it brings – has been missing from Australian policy for far too long,” Wood said.
The path to better living standards for our kids is through less red tape, fresh ideas, more investment in enabling infrastructure and technology, and a commitment by every bureaucrat and minister to see change through a growth lens.
This kind of talk, of course, leads to a spike in the blood pressure of the capital’s superannuated angry cardigans, who see every iteration of the commission’s role as a sign of approaching economic apocalypse.
As well, Wood has been drafted on occasion to play the role of the Chorus, delivering the prologue to the Albanese government’s big set-piece economic events.
Three years ago, a little over 100 days after Labor was elected, the then chief executive of the Grattan Institute set the scene for the great and good at the Jobs and Skills summit with a presentation about the economic state of play post-pandemic.
After all, Grattan had been Labor’s go-to shop for policy analysis and ideas during its nine years in opposition, and Wood had established herself as a skilled communicator in the think industry.
A bigger challenge now looms for the commission, as it seeks to keep nudging an increasingly interventionist government away from risking taxpayer funds, while finding the policy sweet spots that could revive bipartisanship on tax, housing, regulation and technology.
We’ve had no shortage of possible solutions to entrenched economic problems, not least the commission’s 2023 Advancing Prosperity blockbuster, that Dr Jim pronounced dead on arrival.
Political will, however, has been missing, and the ability to develop a bigger story the nation could get behind.
The task for Wood is not a knockout blow this week or this year, but what she describes as a reform “game of inches”, so that Australia, over coming decades, can record a win on points.
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Productivity Commission chair Danielle Wood often describes policy debate as a contact sport.