From Heather Ridout via Bloomie:
…“Malcolm Turnbull’s real challenge is to get a new business model for Australia,” she said. In many of the issues he will face, including changing the tax system and tackling workers’ pay rates, “he is going to have to run the gauntlet of the hard right of his own party, which is going to make life just as complicated frankly as dealing with a lot of other oppositions.”
…“He shouldn’t fight on too many fronts,” said Ridout, who is also chairman of pension fund AustralianSuper. “He should work with the states on a broad-ranging productivity agenda and tax is sitting there as a medium-term agenda.”…Turnbull “has enormous reservoirs of political capital,” Ridout said. “He needs to spend it and he needs to spend it wisely.”
Yep, and that model must be:
- increased competitiveness via
- productivity gains and cost-out deflation leading to
- a non-mining tradables recovery for exporters and import competers.
For that, Turnbull must:
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- explain to the nation the mutual sacrifices needed
- reform taxation so that land and property prices deflate
- reform banking policy to boost business lending
- reform competition and innovation policy
- bring the unions into a grand bargain of no wage inflation, and
- pursue other government productivity-related reforms including infrastructure.
It’s not complicated but it is hard. Then again, so is a deep recession, which delivers the same outcomes, only the guv’ment don’t look so good.
