Over the years we’ve seen too many examples of where our federation hasn’t worked as well as it should have. Different levels of government often prefer slinging mud at each other instead of focusing on their own areas of responsibility, or ensuring that their activities are aligned for the greater good.
However the Treasurers of our two biggest states have gone out of their way to signal that they want to break this mold. Dominic Perrottet and Tim Pallas used two events last week to sing from the same songbook on the need for a new round of productivity-boosting reform and investment. Rather than wait for Canberra, they say they want to present Josh Frydenberg and their state and territory colleagues with some reform ideas.
Their argument is that much of the productivity agenda facing Australia requires heavy lifting from the states, but the way federal funding is divvied up often contains reform disincentives, penalising states who do the right thing.
If this could be flipped – so that reform incentives were built into the system – then states and territories could get on with a raft of changes that would drive economic productivity, which is the only long term way to lift wages and living standards.
The property industry has plenty at stake in this conversation. In a landmark report in 2017, the Productivity Commission identified five big reform areas that could really shift the dial on productivity. Getting rid of stamp duty, fixing land use planning systems and having well-functioning cities and towns were central ideas in this work.
The country’s treasurers will be meeting next month and Josh Frydenberg has asked his colleagues to bring forward their ideas. In the lead-up, we’ll be urging other state and territories to join in and make it a genuinely national chorus.