Everyone wants a slice of the productivity action
- Written by Michelle Grattan, Professorial Fellow, University of Canberra
It’s too early to make a judgement about how productive the government’s economic reform (also known as productivity) roundtable will be, but the fact it’s behind closed doors is making it a rather amorphous affair to follow.
Its sessions are clearly defined, and there seems agreement Treasurer Jim Chalmers is proving a good chair. But, although participants are not sworn to silence about the conversation in the room, what’s coming out depends partly on which players decide to be interviewed or to chat in the corridors.
Talking to the ABC, the ACTU’s Sally McManus admitted to feeling rather lonely in some of the discussions. This followed business representatives on Tuesday predictably shooting down a union proposal for a training levy on employers.
Apart from the financial burden, a similar scheme was less than effective previously.
McManus also anticipated that “I think it may be a bit lonely on AI, but we’ll see”. The unions want substantial regulation of AI; business and Chalmers favour a light touch.
Meanwhile, Nationals senator Matt Canavan organised for Wednesday an alternative roundtable, held in a parliamentary committee room, that he dubbed the “real productivity roundtable”. Canavan worked for the Productivity Commission in an earlier life.
A while after the current chair of the Productivity Commission, Danielle Wood, addressed the Chalmers roundtable, Gary Banks, who once headed that commission, told the Canavan gathering, “the government’s productivity agenda is mainly a spending agenda”.
“It’s not one that involves, well as to date anyway, the kind of regulatory reforms that are needed.” Indeed, he said, energy and labour markets were areas that had been “casualties” of reform.
In the cabinet room, Wood had a stack of slides documenting the productivity problem and how to tackle the “thicket” of regulations.
On its day two, the roundtable had substantial discussions about housing and the Environment Protection and Biodiversity Conservation Act, both hampered by excessive regulation.
There was also consideration of a road user charge. That was strongly advocated by former treasury secretary Ken Henry.
The chair of the Australian Competition and Consumer Commission, Gina Cass-Gottlieb, told the roundtable Commonwealth regulators – all 22 of them apparently – were working together to improve the regulatory regime.
“There is a recognition of the critical element of reducing regulatory duplication […] including in information gathering,” she said.
Chalmers said that on the regulatory challenge, the government had “more than 100 ideas we’re progressing, about 100 that require legislative change and about 100 that we’re still considering”.
He said a lot of those ideas weren’t ambitious enough. “Some are”, he said, and gave the example of RG97 (a regulation relating to restrictions on superannuation funds that has the effect of discouraging investment in housing).
Chalmers flagged he wanted the regulators to be “even more ambitious” in their ideas to boost productivity.
Former head of the ACCC Rod Sims, talking in the session about competition, made an obvious but important point.
“Doing things that mean we ‘can’ increase productivity does not mean that we ‘will’ increase productivity. Boosting skills, or lowering taxes may increase the ‘can’ but not the ‘will’. To get increased productivity we need increased competition so that companies are required to increase their performance to remain competitive.”
Chalmers said at the end of day two that it had been “dominated by how we can boost housing supply, how we can responsibly reduce and improve regulation and speed up approvals”.
“I’m really encouraged by the consensus in the room for economic reform in these areas, and we’re enthusiastic about some of the policies that participants put on the table.
"We’ve already got a big agenda to ease the burden on businesses, cut red tape and build more homes but we’re keen to do more where we can.
"There is a real prospect of a useful consensus emerging on a number of key reform areas.”
The message from Canavan after his (much briefer) roundtable was: “to make our economy bigger, we need to make our government smaller”.
Day three of the roundtable is about budget sustainability. Minister for Health and Ageing, and Minister for Disability and the National Disability Insurance Scheme, Mark Butler has already announced his bit on that quest, outlining at the National Press Club on Wednesday plans to curb the huge growth in the NDIS.
On Wednesday evening, the roundtable participants went off to The Lodge for drinks, and to meet Toto the dog, who had played her part by posing with the prime minister and treasurer in their show of pre-roundtable unity on Monday.
The rebel roundtable attendees had earlier snacked on protein balls and Anzac biscuits.
