PM's strong-arm tactics ignore failure on vital reforms

In what is becoming a familiar pattern, Prime Minister Julia Gillard began the week leading up to today’s COAG meeting by demanding that the states sign up to her education “reforms” - which are really just cuts - with nary a mention of a host of productivity-based reforms that have ground to a halt.

Billions of dollars in productivity gains are still being lost because Labor continues to neglect these reforms in order to grab headlines and paint the states as belligerent and obstructive for daring to question the Government’s back-of-the-envelope proposals.

Whilst reforms to our education system are crucial to the nation’s future wealth and prosperity, Julia Gillard is actually undermining the case for real reform by pitting universities against high schools and primary schools and cutting $2.8 billion from the tertiary education sector.

Labor knew all along that it could never hope to fund the $9 billion worth of reforms recommended by the Gonski report and has instead resorted to its usual pre-budget money-shuffling, ahead of what we all know will be a multi-billion dollar deficit.

All the while, 15 Seamless National Economy Reforms are still at risk of delays; eight are in danger of not being completed and four reforms - Occupational Health and Safety, Mine Safety, Chemicals and Plastics, and Directors’ Liability – are in the “red-zone”.

The Government’s reform failures also extend beyond the business sector and into the lives of everyday Australians. As thousands of families struggle to find affordable rental accommodation, the Government’s National Rental Affordability Scheme (NRAS) is at grave risk of not being delivered. Just 11,300 dwellings have been completed, far short of the Government’s late 2008 promises of 50,000 dwellings by 2012.

However, while new COAG Reform Council Chairman John Brumby rightly highlighted the delays in the Seamless National Economy reform program during a recent speech to the European Australian Business Council, he then went on to say that the objective set out in the government’s Asian Century White Paper is “about the future beyond the Seamless reforms” and referred to the National Compact on Regulatory and Competition reform agreed at COAG last December.

Mr Brumby also said: “In my view, even with the completed Seamless reforms and the Compact, there is much more to be done if we are to meet the Asian Century goal of being in the top five most efficiently regulated places in the world”.

Mr Brumby and Ms Gillard need to focus on actually completing these reforms before talking about what will happen after they are in the bag.

This brings me back to Ms Gillard’s combative approach to the states and territories ahead of COAG meetings. How can the PM front up at COAG, demanding premiers and chief ministers sign on to major reforms when her own government’s record on reform is so abysmal?

Former CRC Chairman Paul McClintock hit the nail on the head in an opinion piece this week, highlighting the Commonwealth’s flawed approach.

After detailing the difficult health reform process that started under Kevin Rudd, Mr McClintock went on to say:

“COAG then had to deal with the Commonwealth’s mining tax process, which appeared to largely ignore that mining tax was a core state revenue – one of the only ones left – and almost at the same time states began to absorb the Commonwealth’s plans for a national disability insurance scheme. Similar tactics were used for the NDIS, with details lacking, long-term funding unclear and states attacked for being uncaring when they failed to embrace another new vision. The latest reform stream on school education funding is following the same pattern, and again, failure to sign up to a surge in school resourcing would be seen as being unwilling to support our children”.

Sadly, Ms Gillard hasn’t taken Mr McClintock’s advice in the past and is unlikely to now. With the May Budget and the September election fast approaching, expect to see more political games from Labor and even less commitment to real reform.

We as a nation will be all the poorer for it.