Less talk, more action

Today you have woken up in “Australia’s building decade”.

That’s the neat little slogan Prime Minister Kevin Rudd has come up with to describe the period of nation building he wants to see, to help Australia meet his brand new productivity growth goal of boosting the country’s productivity growth from 1.4% to 2%.

A fine target, I hear you say. When are we getting it done? In the next year? The next five years? The next decade?

Ah, no. Kevin’s bold goal is to be achieved by 2050 – a mere 40 years away.

Rudd’s vision – and his groan-inducing new slogan – was outlined in a speech yesterday that has been seen by some commentators as an attempt to tie the Government’s stimulus spending to nation building.

Unfortunately for Rudd, Access Economics boss Chris Richardson has been pouring bucket after bucket of cold water on the plan, pointing out that to achieve this goal would take massive, economy-wide reform across the tax system, the health system, education, state and government bureaucracy and microeconomic reform across countless individual sectors.

The low hanging fruit, Richardson argues, is gone.

Perhaps it could be done in 40 years, but as Richardson has pointed out, it would take a government completely determined to push a reform agenda regardless of the economic cost.

And on all the evidence to date, that ain’t the Rudd Government.

Its attempts to work with the states on issues such as health and education have stalled. It’s also developed a habit of calling for an inquiry and review and then taking an age to respond with recommendations or legislation which has become infuriating (ask those in franchising, innovation or financial services).

To be fair, these things do take time in Australian politics, and the Government has had to deal with the little matter of the GFC in the middle of its first term.

It should also be pointed out that having long-term vision or goals is hardly a bad thing – indeed, the Howard Government was always accused of lacking in this area.

But Rudd’s reputation as being a bit of a windbag means bold pronouncements like this fall flat.

If he’s serious about driving productivity, we’ve got a great idea to demonstrate his passion – work with the states to abolish payroll tax and take down on the big impediments to SME growth.

We’re tipping the effect on productivity would be immediate.