Gillard is gone, but she can leave a good legacy: Kohler

It’s plain that Julia Gillard is not a lame duck; she’s a dead duck. With that in mind, the best thing she can do for the nation and herself is look to her legacy.

In fact, Australia has a golden opportunity: we have two full years of a government that has effective, if tenuous, control of both houses of parliament and is so unpopular that winning the next election looks out of the question. They might as well make this a period of important, unpopular reforms.

And you never know, liberating themselves from trying to be popular might actually lead to grudging respect and, eventually, to popularity. It’s worth a try, anyway.

The problem, of course, is that the votes in parliament depend on either the left-wing Greens or a Coalition that has given up all pretence of acting in the national interest and is entirely focussed on stymieing the government.

It means that whereas the great Hawke/Keating reforms in the 1980s on which the nation continues to rely were passed with the support of the Coalition, that’s unlikely to happen this time.

But that probably just cuts out further deregulation of the labour market, and it’s generally agreed that most of the important productivity gains from IR have already happened. From here the gains to national productivity from IR reform would be marginal.

The focus now needs to be on education, infrastructure and tax.

Last night, the prime minister was talking about tax, in a speech to the Australian Industry Group. She foreshadowed that next month’s tax forum would be focused on reforming business tax to encourage innovation and productivity. That’s a good start.

Earlier in the day, Treasury Secretary Martin Parkinson told the AIG conference that improving productivity requires “quality infrastructure, a competitive tax system, a highly skilled and flexible labour force and top notch management skills able to innovate and capture opportunities.”

“If we think that all that is needed is to reprise what’s been done beforehand, which appears to underlie some of the comments on industrial relations, then we have completely misjudged the magnitude of the transformation underway.”

It’s worth dwelling for a moment on why the very unpopular climate change legislation introduced last week is such a good reform – it’s because it will allow Australia to meet greenhouse gas reductions without doing it entirely within this country.

The worst thing we could do is try to meet any kind of meaningful target by cutting Australian emissions only. The system being set up by Greg Combet and the Labor government will allow local companies to buy up to half their emissions permits overseas, at much lower prices.

The Coalition’s policy, such as it is, involves meeting the same 5 per cent reduction target entirely by cutting Australian emissions. Given the carbon intensity of Australian industry, the cost and disruption of trying to do that would be horrendous.

However, Tony Abbott shows no sign of either understanding or caring about that and is being let off far too easily by the media scrutineers.

Julia Gillard and the ALP now need to throw caution to the wind and build on their good work on climate change by trampling all over states’ rights.

That’s what is required to fix national education and infrastructure. The states have generally mucked these things up comprehensively and on some things need to be overruled and/or removed from the picture.

The health sector is on the road to being fixed, although there is a long way to go; Infrastructure Australia is doing a good job but it needs more independence and support from the tax system to winkle dollars out of the super funds; the MySchools website was a good start to put power into the hands of parents in education, but momentum in this area has been lost.

Julia Gillard will never dig her way of the hole by trying to be popular, so she might as well be good.

This article first appeared on Business Spectator.