From Peter Hartcher:
The man whose job it was to “stop the boats” has developed a new three-word mantra to guide his work as Treasurer – his task is to help Australians to “work, save, invest”.
…”People can work more and be better off, save better and put themselves in a stronger position, and invest in their own capabilities in skills, in their kids’ education, in their health or any other way they choose,” he said.
The government needed to “make Australians a better offer” when they faced a choice between work and welfare.
OK, less entitlement is good. So what are we going to see?
“The disappointment about the tax debate recently is that all debate is on one tax rate,” a reference to the GST.
“Plucking that out and concentrating on that is an elite tax discussion. Families want to know, ‘how is this going to work for me?’ “
Running off course here. The nation does not need more hip pocket economics. It needs a fulsome narrative about where the national economy is and where it needs to go. That is that the mining boom is over. That the property boom has unreasonably distorted things. And that we need to restructure the economy so that we can compete in a tough world. Another level down it is all about productivity drivers, innovation and a recovery in tradables. Tax reform must deliver these goals.
That took 79 words to explain. It doesn’t need to be gloomy. It can be an exciting challenge. But it sure doesn’t need this:
“You’ll only throw up the shutters and say, ‘let’s go for it’ if you have great confidence” in Australia, he said.
“What you’re seeing is a similar level of confidence to that of the Hawke and Keating years.”
Reserve Bank governor Glenn Stevens said last year that Australia had many of the ingredients for growth but lacked “animal spirits”.
We don’t lack animal spirits at all. The problem is that the best lack all conviction, while the worst are full of passionate intensity.
Closer to the mark was an interview at the AFR:
“A key part of the response and a focus we are going to have over the next five years and beyond is that we have gone out of the construction phase as Joe would say and into the production phase,” he said.
“And that means that other parts of the economy need to take up the slack that has been left behind and that means diversifying, particularly, where we have got opportunities in the services area.”
He listed education, tourism, community and health services, all of which had “massive export potential” but also lots of room for domestic growth.
“With an ageing population, under the right settings, we are unlocking the capital of older Australians, then you are creating new markets for those services in Australia,” he said.
…”There is a huge amount of capital that is tied up at the moment,” Mr Morrison said on Wednesday, and did to rule out confining the incentives to housing.
That’s better! Though why these guys want to pick winners in services is beyond me. Just improve competitiveness and leave it to the market. We don’t need to choose to be just a bed pan economy. I mean, check this out:
Non-commodity tradables will also boom if you just focus on competing.
