As the Turnbull government struggles with the citizenship fiasco, with more byelections in prospect for early 2018, and a looming party-room brawl over how to protect religious freedoms in the same-sex marriage legislation, now is the time to fill the policy vacuum by identifying a viable economic reform program for the new year.
Obviously, business organisations can go through the motions and nominate a cut in the tax rate for multinational corporations, reductions in penalty rates for more Australian workers and tilting the bargaining table further towards employers against employees. They are all on the government's priority list but are no hope of passing the Senate.
So let's get real. The economic reform agenda is so vacuous that Australia risks a serious economic downturn through policy paralysis. The Australian economy is built on a house of cards, take out the low interest-rate card and the heavy indebtedness of Australian households could bring the whole economy crashing down.
Instead of asking what should be, the business community would be better advised to ask what can be. Ideally, that would be the mission of a second national reform summit, following the successful initial summit of August 2015, supported by The Australian Financial Review and KPMG.
In the absence of a follow-up summit it is still possible to nominate reforms capable of attracting bipartisan support. They include a new deal for women in the workforce, establishing and funding an autonomous infrastructure authority to implement projects in the national interest, digitisation of the public health system to improve its efficiency and quality, and strengthening the competition laws relating to mergers and acquisitions.
Progress in closing the gender pay gap is painstakingly slow. On average, it stands at 22.4 per cent, or more than $26,000 per annum. At a time when wages growth is at records lows, the major parties could work together on legislative and regulatory changes to close the gap more quickly by boosting women's pay.
A Senate inquiry into women's economic security in retirement, established by Senator Jenny McAlister, achieved a high-level of bipartisan support. The major parties could agree on ways to increase women's superannuation payouts, which are only a little over half those of men. A good start would be for the superannuation guarantee to be paid on the Commonwealth paid parental leave scheme.
While the major parties were at it, they could legislate measures to reduce the punitive disincentives for women with children to increase their hours of work. Through the interaction of the withdrawal of childcare benefits and women's marginal income tax rates, the effective marginal tax rates facing such women can easily be 80-90 per cent. Reducing these disincentives would provide a much-need boost to the labour-force participation rate.
An autonomous infrastructure authority could be established and funded to develop and implement productivity raising infrastructure projects, great and small. The authority could play a role alongside the Reserve Bank in macroeconomic stabilisation, committing projects to construction during economic downturns and easing back during periods of strong growth. Decisions on the quantum of funding could remain with the government of the day, but the project selection would rest with the authority, perhaps subject to the final approval of parliament.
Under the Turnbull government's 2017 budget classifications, the funds allocated to the infrastructure authority would qualify as good debt, increasing its bipartisan appeal.
Although the privatisation of the Medicare payments system would never attract bipartisan support, digitising health delivery services while keeping them in public hands is capable of doing so. As health costs continue to balloon with the ageing of the population and the introduction of marvellous new medical technologies, the public health system should be fully brought into the digital age.
Finally, the government is sure to attract bipartisan support if it strengthened the competition laws to strictly prohibit mergers and acquisitions that would substantially lessen competition. At present, decisions of the Australian Competition and Consumer Commission (ACCC) to reject proposed mergers and acquisitions can be overturned by the Australian Competition Tribunal. While the courts always have the power to reconsider a decision of the ACCC, empowering a tribunal to do the same effectively weakens the competition laws and creates a bias towards increasing market concentration.
Talks should commence between the major parties on a feasible reform agenda, including some or all of these suggestions. In view of voter dismay with the fractious nature of the government and the Parliament, co-operative reform would be not only in the national interest but also in the political interests of both parties.