June 2014


This was first published in The Mercury.

This is the original, full version.

Former Australian Prime Minister and Treasurer, Paul Keating’s public appearances are a nostalgic reminder of a golden era of economic leadership.

Reforms like floating the dollar, reducing tariffs on imports, reforming the tax system, moving to enterprise bargaining and deregulating the banking system meant when his time was up, he had shaped a modern, robust Australian economy.   

Under Keating's economic leadership, Australia's real GDP per capita increased by 32% over 13 years. A staggering figure when you consider the level of changes he was implementing – many of which led to short-term pain for long-term gain.

Keating’s unquestionable thirst for economic reform contrasts strongly with today’s economic policy malaise at both a state and federal level.

In Tasmania today, economic reform is inevitably difficult.  We deal with three waring political parties instead of two, we are instinctively distrusting of Government (perhaps even more than the rest of Australia) and education levels are the lowest in the nation.

Opponents’ voices always cry loudest and the need for reform is not acknowledged, communicated or understood. 

Politicians with longevity (or perhaps ‘success’ under their own definition) are almost always guilty of taking few risks, shirking difficult decisions and as a consequence, upsetting very few.

There is little meaningful policy debate.

That’s why Tasmania needs its own Paul Keating.  I don’t mean Labor, arrogant or conceited (although I don’t really care if any of those attributes apply), but at some point we need a leader who has the policy credentials and communication skills to cut though the haze of today’s political quagmire, articulate a vision and executes a plan that gets reform happening.

Reforms like water and sewerage centralisation, electricity competition and even the most minor of voluntary public service redundancy measures caused the former State Labor Government considerable pain. 

In 1998, proposed local government reform and electricity asset sales caused the Liberal Government so much pain it was fatal. 

It is little wonder there is no political appetite for reform.  There’s no reward for it.

Tasmanian politics isn’t being contested by waring philosophies.  It is being run in as a cyclical game of Government vs Opposition.  Politics is always the key consideration while policy is a distraction from winning or losing elections.

If you’re in Government you’re a realist; restricted by political realities, boring bureaucrats and the distrust of your electorate.  You’re pandering to a pre-existing public opinion and you’re unwilling to risk making the case for change.

If you’re in opposition you’re a populist. Unencumbered by reality, you’re prepared to say whatever is needed to get into Government.  Your policy-making vehicle is public opinion.  If what you actually believe in lines up with public opinion – good.  If not, you’ll sacrifice what you believe to be good policy (and your beliefs) for the chance to win.

All of that is ‘overseen’ by an outdated Legislative Council which sees itself only as a house of review and contributes almost nothing to public policy development or debate. 

Tasmania desperately needs a leader capable of smashing that now tried-and-trusted opposition populism via sound bite model. 

Ordinary leaders pander to public opinion.  The best leaders change it.  They can reform because they have a vision, understand policy and they can sell their message. 

Tasmania’s critical issue continues to be its unsustainable budget position.

The Tasmanian budget problems are undeniable.  Operating deficits are forecast through the estimates with no realistic chance of delivering an operating surplus unless wholesale reform is undertaken.

We can only hope the August Budget contains a plan to fix it.

Basic logic says the only two options to solve the problem are to raise revenue or reduce spending.  But raising taxes will only make Tasmania more uncompetitive compared with other states and territories.  New businesses won’t come here and existing ones may disappear.

That leaves the only option: reduce spending. That means review of the services we provide and the way we provide them.

A sustainable budget on the back of a more efficient public sector will provide the flexibility that is desperately needed to undertake taxation reform.  Tasmania should attract business by offering the lowest taxation environment in the country.

Whatever the option, Tasmania needs a vision people can believe in and a way to get there we understand. 

The status quo is completely unsustainable and needs to change.  Tasmania needs our own Keating. 

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