Albanese's guru talkfest won't make you richer - he's chosen the wrong people

The Age

5 days ago

Why isn't there a seat for the CSIRO, which has given us life-changing and productivity-enhancing inventions as Wi-Fi, solar hot water, gene shears, polymer banknotes and permanent-crease clothing?
Where is the expert in AI or cancer therapy or environmental trends or agricultural science?
Scott Farquhar, co-founder and former chief executive of Atlassian, will be there as the lone voice of the technological future. He'll be sitting next to three former or current state treasurers who will tell us all about the fiscal problems they face.
If you were to list the most important developments that have made the world more productive, would tax reform even get a look in? (Perhaps the creation of income tax to help Britain fight Napoleon might get a mention.)
The telephone, the internal combustion engine and the lightbulb are three of the most transformative pieces of technology in humanity's development.
The phone allowed us to communicate quickly. The internal combustion engine enabled us to move goods and people really quickly. And the lightbulb – the creation of cheap light – meant we could work when we wanted to.
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These three pivotal productivity enhancements weren't driven by tax reform. They were driven by ingenuity, by the circumstances faced by their creators, by the need to improve the lives of everyone.
What's also important – and more than a little disheartening – is that all three came into being between 1876 and 1879. Three inventions that underpin today's society are approaching their 150th birthdays.
That's why there is so much interest in AI at present. This is an invention that could utterly change our lives.
As US Federal Reserve governor Lisa Cook noted in a speech last week, AI is a general-purpose technology (a transformative invention like the steam engine and electricity).
'AI is poised to alter the contours of the global economy. AI is transforming the economy, including by accelerating how quickly we generate ideas and making workers more efficient,' she noted.
It's ideas that make the world, the economy and productivity go round.
That's not to say tax doesn't matter. If you impose huge imposts on businesses or individuals, then you distort the economy in a way that is unlikely to be productive. If you don't raise revenue, then say goodbye to roads, hospitals, a judicial system and defence networks.
Governments often build incentives into the tax system for a major policy aim. That's the whole reason, for instance, that superannuation is taxed lightly and why excises on cigarettes and alcohol are so high.
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The idea put up by the Labor-aligned McKell Institute this week, to increase the capital gains tax concession on new apartment builds (and reduce it for investors who simply buy an existing detached house), is another example of how the tax system can help.
However, it's aimed at acting as an incentive for investors to build more homes – not to build those homes more productively.
Apart from, perhaps, some incentives directly aimed at research and development, inventions and productivity-enhancing breakthroughs are rarely driven by the tax system.
Terrible events and diseases drive change (Alexander Fleming's penicillin discovery was transformed into a useable medicine by Howard Florey and German-born Ernst Chain, but it was only World War II that made it cheap and mass-produced lifesaver).
Penicillin has saved an estimated 500 million lives. In terms of productivity improvement, this single medicine has done more than any tax concession to improve our lives and our economy.
Yet when you look around the cabinet table next month, don't expect to see anyone carrying out health-related research.
We can hope that some of the specialists who get to sit in on certain parts of the roundtable might pique the interest of those who will ultimately have a say over what policies get supported.
But I wouldn't bet on it. When all you have is a hammer, everything looks like a nail.