The word reform is broken
by Richard Denniss
[Originally publioshed in the Australian Financial Review, 09 July 2019]
We need to reform the way we talk about reform. Unless we urgently implement "reform reform", it’s likely that hard-working mums and dads will lose their jobs and life savings and, obviously, that would be the fault of the Labor Party. And the unions. And anyone else opposed to the reform reforms.
In Australia, powerful groups act as though they own the word reform. Anyone who opposes their preferred changes is labelled retrograde and a hater of "hard-working mums and dads".
Words matter, and when politicians and business leaders strip words of their meaning they’re really stripping themselves of the ability to change anyone’s mind. The word reform simply means "change for the better". Arguing that we need to change the tax system for the better is like arguing we need to reduce childhood obesity or congestion in cities. Everyone agrees. The question is what constitutes a better tax system, or a better industrial relations system, or how to best improve kids’ health.
But because those who want to cut company tax rates and make it easier to sack workers are afraid they won’t be able to convince the majority of Australians that such tax and IR changes would be "for the better", they keep the details of their proposals to themselves and simply call for "reform". It’s an Orwellian abuse of language, and it works a treat.
Neo-liberalism’s best trick has always been to pretend there is no alternative. Countries can either embrace low taxes, low-quality services and low wages or they can become uncompetitive wastelands in which mums and dads fear for their and their children’s futures. But of course, alternatives do exist.
The countries with the highest incomes, levels of productivity and levels of happiness are also the highest taxing countries with high levels of public funding and high levels of union membership. While it’s easy for the government and business to airbrush Nordic out of debates about economic reform in Australia, it’s impossible to airbrush them from the IMF, World Bank and OECD league tables.
Nordic countries with the weakest determination to cut taxes have the wealthiest economies. Countries with the highest rates of union membership have the highest output per worker. But in Australia, facts are disregarded for their well-known left-wing bias.
Only a month after the Morrison government was re-elected on the basis that its tax cuts would make the economy strong, the head of the Australian Industry Group, Innes Willox, warns: “It’s clear our economy is neither robust nor in good health. This situation threatens the strength of our communities and our ability to continue to lift living standards.”
Luckily, Willox has the solution to the problems he couldn’t see before the election. It seems we need to, drum roll please, reform our unfair dismissal laws to make it easier to sack workers (presumably except Israel Folau), and make it easier to deregister unions. According to Mr Willox, “What we seek are a few key measures, backed by strong evidence, to make the system work better for all”.
According to the proponents of new IR laws, the need for change wasn’t worth mentioning three months ago but now we need urgent change. What better example of the need to reform the way we debate reform could there be?
If Australia really wanted to make changes for the better it might seek to emulate the world-class education system of the Scandinavian countries, the world-class industrial relations system that drives German productivity, or the world-class rapid transport systems of Hong Kong or Singapore. And if Australian policymakers wanted to start taking economic advice seriously, then they would introduce a carbon price, stop subsidising pollution and spend a lot more money on preventative health.
But there is no indication the Morrison government, or our leading business lobbies, take evidence or economics seriously. Which is why the public take neither government nor big business seriously when they claim we have no choice but to reform the things they feel like changing – but can do nothing about rising emissions, rising inequality and rising congestion.
The election campaign was the time for business to make their case for change, and they were so committed to their "reforms" they said nothing. The word reform is broken. We need to fix it or find a new one.
Richard Denniss is chief economist at The Australia Institute.