Reform summit: Malcolm Turnbull targets waste in bid to drive growth

Malcolm Turnbull is considering an overhaul of giant federal-state spending programs as a key plank of his reform agenda.

Job ID PD538211. The Prime Minister Malcolm Turnbull with Warren Truss and Treasurer Scott Morrison during a picture opportunity with key economic leaders at Parliament House in Canberra. Photo by Gary Ramage

Malcolm Turnbull is considering an overhaul of giant federal-state spending programs, targeting waste in health, poor outcomes in education and training, and in­efficient taxes as a key plank of his reform and innovation agenda.

The Prime Minister, after meeting key proponents of the National Reform Summit in Canberra yesterday, flagged involving them in the next Council of Australian Governments meeting to help improve major spending programs as part of the fiscal repair process. Mr Turnbull said a tax reform green paper would be released “shortly’’ and Innovation Minister Christopher Pyne told the meeting an innovation statement would be handed down before Christmas.

The Australian understands there was widespread agreement at the meeting on a “go for growth’’ strategy, which included tackling red tape, much of which is ­administered at the state level.

The mini-summit of 25 people headed by the Prime Minister, included 10 ministers, four officials, including Reserve bank governor Glenn Stevens, and 11 leading business, union and community figures. The three hours of talks in the cabinet room at Parliament House followed August’s National Reform Summit, sponsored by The Australian, The Australian Financial Review and KPMG. “Our shared objective is to ensure we are as competitive and productive in the future as we possibly can be ­because that is how we ensure our prosperity,’’ Mr Turnbull said.

“We embrace the future with enormous optimism.”

Resetting the political agenda after some areas of reform were ruled out by the Abbott government, Mr Turnbull said: “Everything is on the table.”

Along with ministers including Treasurer Scott Morrison and Fin­ance Minister Mathias Cormann, Mr Turnbull wanted to “listen” and “engage” with suggestions to drive innovation and productivity across the country.

Australian Council of Social Service chief executive Cassandra Goldie said after the meeting: “What binds us together is that we all want to see great economic growth, that is about opening up job opportunities.’’

There was widespread agreement on the need to tackle tax concessions that are “no longer fit for their purpose’’, which would see superannuation tax concessions for high-income earners and capital gains and negative gearing at the centre of the debate.

While participants agreed on the need for tax reform and have kept the GST on the table, there was disagreement about increasing the rate or broadening the base of the consumption tax.

In addition to cutting the corporate tax rate from 30 to 25 per cent, business groups are pushing for GST changes but the ACTU said this was “not the way to go’’. ACOSS believes there are higher reform priorities to pursue before considering the GST.

Business Council of Australia chief Jennifer Westacott said states had to be part of the reform conversation because the redesign of spending programs and tackling the burden of regulation crossed into the states’ domain.

But the issue was efficiency rather than spending less. She said federal government spending on schools had gone up by 40 per cent but results on every measure had gone backwards.

The government’s review of the Medicare schedule was widely backed.

Ms Westacott said the debate on spending should be about the quality of services. “We don’t require more spending, we require more focused spending,’’ she said.

Ms Westacott called for more infrastructure spending, particularly on mass transit in the cities but said it could be funded through private sector investment.

ACTU secretary Dave Oliver said while there were differences between the groups, there were also many areas of commonality. “We’re all on the one page when we are talking about growth,’’ Mr Oliver said.

He said he was pleased the government was not going to cut its way to growth but focus on issues such as skills, innovation and infrastructure. The meeting heard calls for a shake-up of the work-for-the-dole scheme to include training for long-term unemployed youth and a handover of TAFE from the states to the ­commonwealth.

It also discussed how the workplaces of the future would operate, including new jobs and barriers to participation, but did not discuss penalty rates.

There was a united view on the need for more collaboration between universities and business, particularly small and medium-sized enterprises to drive inno­vation and commercialise new ideas. One option being discussed to tackle the rising jobless rate is a proposal for small business to take on unemployed young people in return for being exempt from unfair dismissal laws.

Australian Industry Group chief executive Innes Willox said the meeting had been “really frank and fruitful”. “We had discussions around both the revenue side of fiscal policy as well as the spending side … And we are very encouraged that there will be many more including with the states; and that’s a key point that came out of today: that we all need to engage more with the states to push this growth and reform agenda forward,’’ Mr Willox said.

Mr Turnbull opened the meeting calling for “good ideas’’ and declaring the nation had to engage with the challenges it was facing “and the ways to take advantage of them’’.