Give that government an easter egg

It's school holidays and parents across the country are bribing their kids to do the right thing.

So if an extra easter egg can get my nine year old to clean up her room, would the same approach work for governments?

It's a concept which has been one of the less commented recommendations of the review into competition policy chaired by Professor Ian Harper.

The review recommends a new wave of reforms aimed at increasing competition, including deregulating retail trading hours, adding a public interest test into land use planning controls, deregulating pharmacies, and introducing a controversial 'effects test' into competition law to restrict actions of big business where these effect competition.

But it also asks how state and local governments should be encouraged to wade into difficult reform areas. After all, why would a politician take on regulatory reform which upsets existing beneficiaries for the mere purpose of improving the overall economy? The short-term politics often outweigh the lure of good economic outcomes.

The Harper Panel's suggestion? Give them an easter egg (metaphorically speaking).

They propose a return to the successful competition payments model of the 1990s, where the states agreed to a wide-ranging set of microeconomic reforms in exchange for incentive payments from the commonwealth. The rationale? Tough reforms will boost economic growth and lift tax revenues, which can then be used to fund incentives.

Imagine if we used this model to tackle one of the most intractable challenges affecting the economy and housing affordability: planning reform.

There's an idea that should be on the agenda when Treasurer Joe Hockey meets with his state and territory counterparts this Thursday.