Media release issued Tuesday, 16 February 2010
The still tenuous global economic recovery, Australia's relative economic resilience, and the key issues for the upcoming federal and state elections are the focus of the Economic and Political Overview (EPO) 2010 report and conference series taking place this month. Feature articles in the report also examine the lessons learnt from the Global Financial Crisis and highlight the value of sound economic governance.
CEDA's EPO conference series commences in Tasmania on the 17th February. Over the next month Treasurers and the Premiers of each state will address CEDA audiences across Australia about the year ahead.
2010 will be a politically charged year with a federal election and three state elections in Tasmania, South Australia and Victoria.
"This will be the most comprehensive state-by-state pulse reading of the gradual recovery and the substantial policy challenges ahead ," said David Byers, Chief Executive of CEDA.
"In Australia and globally, the past year has been marked by a considerable expansion in the direct involvement of government in the economy. Stimulus spending with seemingly limited cost benefit scrutiny has been the order of the day. Through 2010, a disciplined reeling-in of expansionary policy settings will become the new order."
"Among the many challenges to be grappled with this year, the Australian Government faces difficult choices on climate change policy in the aftermath of the failure that was the Copenhagen Climate Change Summit. Its commitment to reform will also be tested in its response to the 'Henry Australian Taxation Review' and much needed decisions on health reform and governance at COAG."
"The challenge for the Rudd Government will be to pull back from its pattern of direct intervention to an approach that facilitates efficient market-based structures and individual consumer choice," he said.
CEDA's EPO series also sees the publication of CEDA's first report for the year, the Economic and Political Overview 2010, featuring four significant papers:
Alan Oster and Ben Westmore, analyse the economic downturn and gradual recovery. Their outlook for 2010 is for the continuation of a 'moderate and disparate' upturn in activity over the next few years, with global GDP forecast to grow by 3.2 per cent in 2010 rising to 3.5 per cent in 2011. Weak labour markets and limited scope for any further stimulatory government policy will constrain growth compared to previous economic recoveries. For Australia, they expect GDP growth to rise to 2.75 per cent in 2010 with fragile consumer and business confidence, and household and business deleveraging impeding recovery.
The authors caution that the challenge globally will be winding back stimulus spending once recovery is well entrenched.
Professor Kenneth Wiltshire reviews the Rudd government's performance along with the Opposition leadership turmoil in 2009. In this election year, Wiltshire interprets the polls and identifies the key 2010 political and policy issues. In his view, the significant looming political events for the year include climate change, reviews on tax and superannuation, border protection, Chinese trade relations, federal spending and the necessity of likely cutbacks. Although another term of Rudd Government is likely, Wiltshire highlights the closeness of the margin. He predicts marginal seats in Queensland and New South Wales will play a major role in determining the election outcome.
Peter Jonson, prominent company director and founder and editor of Henrythornton.com, traces the root causes of the global financial crisis, the warning signals we failed to heed and critiques the policy response to the crisis. He believes the biggest threat to the world economy is instability caused by policy swings and advocates the 'Goldilocks' solution to the withdrawal of stimulus spending. Bold tax reform, wise investing and entrepreneurial flair will be required in Australia. His outlook is that of a guarded optimist - Wall Street and Main Street having been given the kind of scare that should encourage responsible behaviour over the next decade or two.
Dr Michael Porter mounts the case for a return to the path of rigorous policy reform that has been effectively endorsed by both sides of politics over the previous 30 years and enabled Australia to successfully withstand recent external economic shocks. In a rebuttal of the Prime Minister's diagnosis of the 'failings' of the 'neo-liberal economic orthodoxy', Porter describes labels such as 'neo-liberal',' left', 'right', and 'conservative' as concealing rather than revealing substance.
The author argues that it is sound economic governance that counts. The key contribution from government lies in the provision of strong and credible institutions, transparent rule of law and the facilitation of efficient market-based structures and choice. He argues for sectoral extension of that model of accountability and efficiency - reviewing reform needs in telecommunications, broadband, emissions trading, water, health and hospitals and tertiary education. In countries suffering post the GFC, lessons can be learned from the Australian experience regarding what makes for sustained prosperity and the capacity to ride out crises.
In CEDA's 50th year, CEDA Research Fellow, Professor Ian Marsh looks at the history of the Economic and Political Overview publication. He delivers an insightful analysis of three eventful decades in a commemorative essay titled CEDA at fifty - the EPO at thirty.
The publication is being released in Tasmania on Wednesday, 17th of February at the first event in our 2010 national EPO series.
EPO conferences are taking place around the nation. For more information on the event nearest you, click on the links below:
To read the full EPO publication, click on the link below.
Economic and Political Overview