Tax reform on the agenda of economic roundtable

Australia Broadcast Center

4 days ago

Sabra Lane: Independent economist Chris Richardson will be at the summit later in the week, specifically talking about tax. Chris Richardson, welcome back to AM.
Chris Richardson: Many thanks, Sabra.
Sabra Lane: Productivity might seem like a really dry topic, but why is this important for all Australians?
Chris Richardson: Because it's our living standards. The most overused quote in economics, and it's the most overused because it's the best, is that productivity isn't everything, but in the long run it is almost everything, and it is absolutely what underpins our living standards.
Sabra Lane: Now you point out that during the past 10 years, Australia's living standards rose 1.5% compared with 22% by the rest of the rich world. That seems incredible. What's happened?
Chris Richardson: We've run into heavy weather on a bunch of fronts. In many ways, we were able to slipstream the rise of China, but that is less available to us now as something to speed along our living standards. And whereas in decades past, governments of all stripes were a little more willing to take on difficult reforms, for some decades now those reforms have been harder to come by at the state level and at the federal level.
Sabra Lane: Now we had a federal election three months ago. Lots of promises were made by the major parties. Shouldn't this have been a big issue then?
Chris Richardson: Look, I think so, but I also think it is magnificent that the government has this roundtable to bring it front and centre. You can't change Australia until Australia needs to understand that it has to change. And that is the challenge. Many people think, well, there are problems, but what exactly do we do? And I would say that's a central thing that this roundtable in Canberra has to do, is to start to make people understand that we can and should change on a bunch of fronts.
Sabra Lane: Do you think this three-day summit can achieve meaningful change? There are lots of vested interests, unions and businesses arguing against each other's ideas. There are lots of egos. How worried are you this becomes a big conversation and nothing more?
Chris Richardson: Well, success will absolutely ride on compromise. I mean, if everybody says, you know, you can't do this, you can't do that, you can't do something that I 99% agree with because it's not 100% agreement from me. You know, basically, if everybody jumps into their usual foxholes, it does get harder. I certainly think that people need to walk into the room, check their egos and, you know, I'm as guilty as anyone there Sabra, but also check, I guess, their background, their hats, who they work for.
Sabra Lane: Compromise is pretty hard to achieve, isn't it?
Chris Richardson: And I would say it's become harder to achieve over time. And more broadly, if you want to change any nation around the world, including Australia, that's a tougher gig than it used to be. Change is hard. And some of the changes, Productivity Commission is out this morning pointing out that, you know, you can only float the dollar once. Some of the things that Australia has successfully done in times past have been great. But we do need to look around and say, well, what else can we do?
Sabra Lane: In the lead up to this summit, there's been a lot of attention about taxes, artificial intelligence and regulation. What about spending and reining that in? At a time when parties are talking up spending on defence, health, the National Disability Insurance Scheme, should we also be having a conversation about government spending?
Chris Richardson: And spending's on the agenda as well. That's there on Thursday, the last day. Yeah, you know, the I think back at the very start, the Treasurer said, you know, don't rule anything out. And you absolutely need to consider everything if you're going to ask the basic question of, well, how can we do a better job around Australian prosperity, Australian fairness into the future?
Sabra Lane: What's at stake?
Chris Richardson: It is so hard to get any nation to change. And national conversations get lost in a welter of voices these days. You can't do this, you can't do that. It's the point you mentioned, it's the point that I jump up and down about. Our living standards haven't done well under either political party for quite a while now. I think Australia needs to rise to that challenge.
Sabra Lane: Thank you, Chris Richardson. And good luck.
Chris Richardson: Many thanks, Sabra.