We are in the midst of an election campaign where much concern is justifiably being expressed about the paucity of serious policy announcements by either major party – not to mention the paucity of most of those that have been announced. Perhaps the most important serious announcement has been by Abbott – if elected the Coalition will not increase the burden of taxation (that is, the proportion of tax to GDP) – but this has hardly been discussed.
Nor has much attention been given to the excellent Stan Kelly lecture given on 15 August by the former head of the Productivity Commission, Gary Banks. The occurrence of that during the election campaign is entirely coincidental. Even so it deserves much more attention because it identifies the need for major policy changes, both economic and political, to reverse the trend in recent years for government policies to become much more accommodative to special interest groups. Protective arrangements of various kinds now extend to a wide range of industries and these arrangements are reducing productivity and economic welfare generally. Just as importantly, it identifies a major problem with the political process now prevailing in Australia. Read more