The selling of reform

The critics are coming from everywhere to pile into Prime Minster Julia Gillard at present and the business community appears to be leading the charge.

Yesterday it was elder statesman Don Argus, who came out swinging in a wide-ranging speech that addressed everything from the carbon tax to productivity to the NBN to the process of governing.

At the heart of his speech appeared to be the idea that the Labor Government has taken a “lazy” approach to reform and had a “woeful” record.

“Instead of basking in how good things are right now in Australia, we need to ask the more important question of whether the decisions being taken today by our politicians will put Australia in a sound position a decade hence,” Argus said in a speech to the Minerals Council of Australia’s biennial tax conference.

“On that score I fear we are found wanting… I fear our political leaders are opting for the most politically convenient outcome, and not what is in the best interest of future generations.”

He slammed the lack of consultation on big policy initiatives such as the initial mining tax and the carbon tax and took a shot at the NBN, saying that improving productivity needed “more careful consideration than throwing billions of dollars at projects which have not been risk assessed”.

On ABC’s Q&A last night, Climate Change Minister Greg Combet hit back with a list of Government reforms, including the $16 billion health package negotiated with the states, a $2 billion mental health reform package, the deal to separate Telstra’s retail and wholesale businesses, the NBN and of course putting a price on carbon.

That’s not a bad list, to which you could add paid parental leave, the Henry Tax Review, the new R&D tax credit scheme and the mining tax as Labor Government (Rudd or Gillard) reforms.

You might not agree with all of these reforms – and as readers will know, we have been critical of the R&D tax credit and the mining tax from time to time – but it is hard to accuse Labor of lacking some big, bold ideas.

The problem has been with the way these ideas have been executed and then sold the business community and the wider electorate.

The Government’s response to the Henry Tax Review was really the start of all this rot. By ignoring most of Ken Henry’s work, burying much of his background research and assumptions and then launching the mining tax with little consultation, Labor got the vast majority of the business community offside.

The poor reaction the mining tax also seemed to force the Government into a change in the way it announced major policies. Instead of suddenly landing something in the public arena, information about the NBN and the carbon tax has been delivered almost painfully slowly, with many of the detail that business groups really wanted left out entirely.

The carbon tax is a good example of this – business groups such as COSBOA are still calling for the Government to release scenarios and case studies that illustrate in detail how various businesses will actually be affected.

There is an argument that says we can’t have it both ways. Business can’t on the one hand blast reforms as “lazy” when they don’t include long periods of consultation and lots of detail and then complain when the Government actually tries to hold a long period of consultation and get as much detail out there as possible, even if this takes a bit of time.

But surely there is a middle ground that Labor had failed to find – as highlighted by their inability to sell difficult but worthy concepts like the NBN and fighting climate change. Gillard is paying the price for the Government’s lack of sales skills in today’s polls.

But at a time when Australian industry is undergoing a period of incredible structural change – with big employers such as retail and manufacturing the worst hit – business groups need to focus more on actually driving reform and less on politics.

Reforms such as the NBN, the carbon tax and industrial relations might need tweaking or even major reworking, depending on where you sit. But as our business leaders know, these things do take time and they do require proper public debate.

That is what we need to get back to.