10 things to fix for a better economy

This is Andrew Charlton’s list:

1. Falling investment: Private business investment is at the lowest point in two decades as a percentage of GDP.
2. Low business creation: New business entries have fallen nearly 30 per cent over the past two decades.
3. Weak labour productivity: Labour productivity growth in the market sector is 80 per cent below the long-term trend. This is a major drag on wages growth.
4. Growth constraints in the tax system: Australia has many state taxes (for example, payroll taxes and stamp duties) which create a welfare loss of 40 cents or more for every dollar raised.
5. Falling behind on digital: Australia’s ICT sector is about half the size of global peers as a share of GDP. Our listed tech sector is four times smaller than that of the US, as a share of the total stock market.
6. Low worker mobility: Workers are moving jobs 25 per cent less frequently than they were 20 years ago, limiting wages and productivity growth.
7. Gridlocked cities: The avoidable costs of urban congestion are about $20 billion.
8. Lack of skills for the future: Even before the crisis, nearly one in three young people in the labour force were either unemployed or underemployed, even though businesses were crying out for skilled workers.
9. Complex IR system: Partisanship has slowed progress in modernising our industrial relations system and prevented us from delivering labour productivity growth and fairly sharing its benefits.
10. Energy and climate policy uncertainty: 15 years of policy inertia on climate change has left us with slowing energy investment and rising costs.

The problem with this list is it is mostly symptoms. You don’t fix symptoms by treating them. That’s called a bandaid. You fix symptoms by curing the underlying disease. What are the ten things to do to fix that? In no particular order, here’s my list:

1. Have and education royal commission to root out corruption, rebalance it away from foreign students and towards pedagogical standards and restoration of VET.
2. Cut negative gearing to stop capital misallocation into property.
3. Ban political donations, revolving door personnel and lobbyists to end rent-seeking.
4. Liberalise innovation and competition policy.
5. Put the RBA and APRA back together to ensure monetary policy operates to keep the currency competitive.
6. Install gas reservation for cheap energy and a carbon price.
7. Reform stamp duty, the GST and install huge mining taxes to fund cuts for everybody else.
8. Cut immigration in half and temporary visas by 90%.
9. Invest heavily in infrastructure.
10. Industry policy to repatriate manufacturing supply chains.

In ten years that will give you a much more diverse growth structure, much more competitive economy, much more dynamic business culture, much more efficient cities, much cheaper energy as well as a leg up into low carbon industry, skills, ICT and every other tradable you can think of.