CEDA's annual Big Issues survey unsurprisingly has highlighted the major issues confronting Australia in 2012 will be productivity and infrastructure, but also provides insight into the economic downside of having a Federal minority government.
The Survey is based on responses from over 1100 CEDA trustees and Big Issue readers.
Rather than focusing on the substantive underpinnings of economic reform, we have witnessed a continued focus on policies that have been unresolved during several terms of government of different political persuasions.
The carbon tax is the primary example of this - a policy compromise adopted as a consequence of being part of minority government and an unresolved issue from two previous governments. The emotive issue of Refugees is another. Both are important, but considerable time has been wasted on political point scoring, leaving little capacity for robust public discussion on their implications for economic reform.
This policy housekeeping has meant that there has been little focus on the major economic policy issues confronting Australia, such as productivity, and unsurprisingly as a result, respondents to the Big Issues survey rated the Federal Government's policy decisions as relatively ineffective.
Productivity was the number one issue survey respondents thought would determine Australia's future prosperity. While there has been increased noise around productivity in national debate, genuine moves to examine or address this issue have been negligible.
What Australia needs is meaningful reforms that will enhance Australia's economic flexibility and capacity. This includes reducing the regulatory burden on business and providing suitable infrastructure, the second most highly rated issue by survey respondents.
Infrastructure underpins our economy's capacity to respond to external shocks such as the China resources boom, the European sovereign debt crisis or radical changes in weather patterns experienced at the beginning of the century.
Better planning from Government was a key imperative identified by survey respondents for ensuring the delivery of adequate levels of infrastructure.
If we fail on this front, our cities will become clogged, our ports and rail network will not be able to deliver goods with the speed and efficiency needed, and our trading partners will go elsewhere to source their goods and services.
CEDA is exploring the importance of infrastructure delivery in two major research reports: A Greater Australia, looking at issues around population, and the Australian Water Project. Final reports for both are due next year. In undertaking this research CEDA has found a major disconnect between what is needed on the ground and the political decisions being made.
The reality is that the last major economic reform was the introduction of the GST. Australia has been riding on the substantial successes of economic reform from the 80s and 90s for too long.
It has carried us through until now, despite a reform hiatus. However, with growing international uncertainty and increasing competition from emerging and developing economies our hard won economic prosperity will be short lived if action is not taken soon.
It is time for both major parties to return to a bipartisan commitment on economic reform. Both parties must acknowledge the need for such reform and engage in meaningful, robust and evidence-based public debate. If not the hard-won gains of the past will be but a fleeting memory as we are mired in political point-scoring, policy vacuums and Green anti-development rhetoric.
Professor the Hon. Stephen Martin
Click here to read the Big Issues Survey 2011 analysis.