Business Day’s Michael Pascoe has produced a good article today on the ensuing battle being played-out between vested interests seeking to maintain their taxpayer lurks and “do good” commentators and think tanks pushing for reform in the longer-term interest of the nation:
The good are doing that – trying to get policy thought about and in place ahead of a crisis that will force more expensive remedial action. While there are “no plans” to increase the pension age or remove the family home’s sacred cow status, the possibility exists to influence a new government to at least not say “no”.
The not-so-good are just busy protecting their patch and privileges, absent of policy principles. The “salary packaging” industry comes to mind, along with the wealthy few fortunate enough to live in a tax haven via the current superannuation system.
In the short term, the not-so-good seem to be winning, but the good are in there trying. They need to be. The case for politically difficult policy has to be steadily built, backbones have to be constructed for politicians. While they’re in the “no plans” stage, there’s hope that they might be brought to at least look at a blueprint.
Any half-reasonable person considering the demographics outlined by the Productivity Commission has to conclude that we need both tax and spending reform. The current crop of handouts, lurks, rorts and well-meaning largesse simply is not sustainable.
The official audit/inquiry/report season we’re embarking on will provide opportunities to build the cases for the required changes and flesh them out, but it will be a test of the integrity of all those involved that they perform with an eye to the equitable longer term and none at all to present politics. Quick examples: the Productivity Commission’s childcare inquiry will be second rate if it doesn’t include a solid analysis of optimum maternity leave policy; the taxation review will be tainted if it doesn’t include a comprehensive consideration of superannuation. Oh, and don’t forget the motor vehicle FBT arrangements that have just been reinstated.
Australia desperately needs a reformer like Paul Keating – someone that will stare down vested interests and clearly articulate the need for change and ‘shared-sacrifice’ – if it is going to successfully navigate the difficult challenges ahead. While I hope to be proven wrong, I cannot see such a person in today’s crop of populist politicians (except maybe Malcolm Turnbull who is rich himself and can only be there in the public interest), or an electorate amenable to reform, particularly in light of the growing retirement of the large baby boomer cohort, who will likely fight tooth-and-nail to hold onto their superannuation and pension lurks.
Unfortunately, this means that remedial action will likely only come once Australia is plunged into crisis and/or problems have grown too big to ignore.
