The road to recovery: restoring prosperity after the crisis

The most far-reaching and challenging micro-economic reform process that's under way is of course in telecommunications. The government's national broadband network project is half of a wider reform agenda in telecommunications. The other half is regulatory reform.

The Rudd government inherited a terrible stalemate in telecommunications: a private company that completely dominates the sector through its control of monopoly infrastructure; a complex regulatory regime that encourages gaming and discourages innovation and investment; and broadband outcomes well behind most comparable nations.

Regulatory reform and infrastructure investment are inextricably connected. The government is committed to ensuring Australia has world-class infrastructure that is accessible to all market participants on equal terms. Under the Howard government private monopoly model, this couldn't happen. In the modern economy, telecommunications services are of similar importance to financial services. The notion that we should tolerate third-rate arrangements is unacceptable. Most of the critics of the government's proposals would regard themselves as supporters of the free market, but they are somehow unable to address the need for genuine competition in telecommunications.

The hard grind of improving Australia's productivity performance is at the heart of our economic strategy. There is hardly a sector anywhere in the Australian economy that is not touched by the government's micro-economic reform agenda.

Our economy is changing all the time. That means the reform task is also always changing. There is always more to be done. And the influence of political realities can never be completely discounted. In aggregate, though, the economic reform challenge is one that Australia can't afford to fail. We are emerging from the global financial crisis in better shape than virtually all other developed nations.

That's no reason for self-congratulation. It's a very good reason for grasping the nettle of difficult reform challenges. We have survived the war, now we have to win the peace.