What was distinctly absent from Senator O’Neill’s contribution there was the extent to which Ms Wood has actually contributed to the debate on productivity in our country. My major concern here is that the—
Senator O’Neill: She just got the job, Matt. Give her a go. She’s just been appointed.
Senator CANAVAN: I’ll take that interjection, Senator O’Neill! You’ve appointed her to lead the Productivity Commission, not work in it! If she’s going to lead it, you’d think you’d be able to point to a record of Ms Wood advocating for significant policy reform in this country which would deliver productivity growth. I’ve read some—not all, of course, but some—of what Ms Wood has contributed to the public policy debate since her appointment and it seems to me that she has been extremely devoted to looking at tax increases, as we have described here this afternoon, and to extra spending on child care. As admirable as these debates are, they don’t go to the core issue of how we lift our productivity growth.
I should put on the record of this contribution that I worked for the Productivity Commission; I was a graduate there. It has been a hugely influential institution in our country but I think its influence has waned over the past decade or so. The original debates it had on microeconomic reform and economic rationalism have waned somewhat from the policy debate and it has struggled to find a new footing to contribute to Australia’s public policy debate. I think it’s regrettable that the Productivity Commission has said very little about the energy policy debate—very little at all, despite probably being one of the most important microeconomic policy challenges that we face today.
It’s very important to understand what the Productivity Commission is meant to be. It’s quite a unique organisation around the world. It’s meant to be an independent form of advice to the government on microeconomic matters—not on taxation matters, which I mentioned that Ms Wood has taken a particular interest in, and not on the fiscal balance, which she has also contributed greatly to, but on microeconomic reform matters. And we need a voice on those matters right now, given the parlous state of productivity growth in Australia. Just over the past year, productivity has fallen by around 3.6 per cent. That’s the biggest fall we have ever recorded while we’ve been measuring productivity in this country and it directly means that Australians will be poorer over time unless we can rectify that situation.
Prior to her appointment to the Productivity Commission, Ms Wood headed up an organisation called the Grattan Institute. The Grattan Institute was founded by the former Rudd and Gillard governments; they were given a grant by them and have traditionally always come from the left side of politics and provided a left-wing conversation or elements in the public policy debate. It greatly concerns me that this has been a partisan appointment by the Labor government. As qualified as Ms Wood is, she will be, unfortunately, tarnished by the fact that she headed up an organisation that was set up by a former Labor government to pursue Labor ideas. That’s why they gave them funding and that’s why the Grattan Institute almost always advocates for higher taxes and higher spending, as Labor governments traditionally do.
Whatever your views are here on the merits or otherwise of high taxing and high spending, it’s pretty hard to establish a case that higher taxes and higher government spending lead to higher productivity growth. That’s not the historical record on these matters. You may want those higher taxes and higher spending, regardless of their impact on productivity growth, for other reasons, but it’s a massive missed opportunity by the government here that we have not seen the appointment of someone who is widely respected in the economic policy-making field, who is not seen as partisan and who actually has a clear record in being able to advocate for policies that may sometimes be uncomfortable for the Labor government but which are the hard truths which we desperately need people to tell Australians right now.
If there is one thing which is absent from our public policy debate, it is some hard truth—the hard truth that we cannot keep spending billions and billions of dollars on extra debt every year and expect to get away with it. There is the hard truth that one of the reasons our inflation is out of control is because we no longer take control of our own energy destiny. There is the hard truth that tough decisions—difficult decisions—must be made to restore our economic strength and prosperity. That’s because at the moment we’re taking the lazy decisions of increasing government spending and advocating for higher taxes, and those will not deliver economic prosperity to the Australian people.
It should be noted that Ms Wood has advocated for an inheritance tax and that there are Labor senators, like Tim Ayres over there, who have long advocated for an inheritance tax. This should send a chill down the spines of all Australians, because the Labor Party has pretty much never seen a tax that they don’t want to put on their backs.
