by John Daley

14.06.2016 report

Download the report

Australia faces many domestic policy challenges as it enters the last weeks of an election campaign. Yet a government that is prepared to forcefully articulate the public interest could stare down interest groups and win public support for a brave and powerful reform agenda.

Australia’s political system is not dealing well with the country’s problems. Our politicians are creating expectations that far exceed what government can ever do, while often failing to act on the things they can control. The result is an often barren debate and a dull campaign, yet surveys show the public accepts the need for reform, and is ready to slay sacred cows such as negative gearing.

The failure of reform nerve over the past fifteen years should not obscure the fact that reform could make a big difference.

Surveying seven years of Grattan Institute reports in health, school and higher education, energy, cities, transport, tax and other policy areas, Orange Book 2016 identifies numerous reforms to increase economic growth. They include:

  • Tax reforms to increase efficiency;
  • Transport spending based on clear need, not marginal seat pork-barrelling;
  • Road charging to reduce congestion and connect user demand with public spending;
  • Strengthening existing policies to create a stable long-term climate change policy;
  • Energy market reforms to align pricing with costs; and
  • Redirecting school education funding to lift student progress through more focus on targeted teaching and improving teacher feedback, among other reforms.

The Commonwealth also needs to improve the quality and reduce the cost of public services. Pricing reforms to pathology and pharmacy, and reducing the number of inappropriate procedures, would save money. Funding should be redirected to promote more integrated care, and support more people to live at home near the end of life.

Budget repair is a major priority. Commonwealth budgets have not come close to balancing for eight years, and younger generations will be taxed significantly more to pay for today’s spending. Both spending reductions and targeted tax increases are needed.

Australia has a proud history of enlightened public policy. It can continue to be the lucky country. But we must make our own luck.

Download the report