Recent Australian governments have lived off the gains of the reform era, but none of them have tried to blow these up the way this treasurer has done, writes Ed Shann.
Unfortunately, he lost in his rhetoric the benefits Australia gained from economic deregulation. It increased the flexibility of the economy, so we outperformed the major developed economies in recent decades.Alex EllinghausenHis thesis is that Australia is in trouble because neo-liberal policies relied on markets that left us vulnerable and exposed. The Labor government will redefine and reform the economy and institutions to increase resilience.
The measures Chalmers suggests will increase the government role and will not transform capitalism for the better. Over the past two decades, the Australian economy grew faster in output per head than any of the seven major developed countries. The country also rapidly increased resource exports to meet booming Chinese demand. Thanks to rising commodity prices, our real income rose even faster than output.We ended with unemployment near 3.5 per cent. Income inequality levels fell slightly and we have much less income inequality than the UK and the US.
Of course, the role of the government changes over time. Markets need to be regulated and competition encouraged. The budget needs to be repaired, so we have the resources to respond to new shocks. Out-of-control public programs such as the NDIS need reform, as does the health system, Indigenous welfare, aged care and education. The tax system needs broadening and the loopholes need to be closed.
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