What came out of the Economic Reform Roundtable?

What came out of the Economic Reform Roundtable?

Last week in Canberra, the federal government brought together a group of politicians, business leaders, unions and experts for the Economic Reform Roundtable. The aim of the game was to brainstorm ideas to boost productivity and strengthen the economy, so in this Squiz Shortcut, we’ll take you through…

• what was on the table

• and what the government came away with…

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Squiz the Shortcut

First things first - was it actually round?
As you can see from the pic above, it was indeed a roundtable - an oval-shaped one, to be precise - so that's a good start. But one reason this event is referred to as a roundtable is the idea that everyone will get an equal say.

Who made the cut?
Around 26 people turned up to take a spot at the roundtable, which was held inside the cabinet room in Parliament House. Those leaders included CBA boss Matt Comyn, Tech Council Chair Scott Farquhar, and ACTU secretary Sally McManus… There was also Business Council of Australia Chief Executive Bran Black, Productivity Commission Chair Danielle Wood, and Coalition Treasury spokesman Ted O'Brien.

How long did it run for?
The roundtable brought together this very select group of leaders from business, unions, government and civil groups for 3 days - 29 hours in total - to discuss some of the big economic challenges Australia is facing.

Why did the government decide it needed a roundtable?
This is the Albanese Government's second term, and shortly after they won the federal election in May, Treasurer Jim Chalmers flagged that we've got some pressing economic issues that need attention.

What kind of issues?
The main things Chalmers wanted ideas for are ways to boost our lagging rate of productivity growth, to take pressure off the budget, and to build a more resilient economy.

What's the deal with productivity?
Productivity was a big theme of the roundtable - and by productivity, we mean how efficiently Aussies use their time at work to produce products and services. Currently, our rate of productivity growth is the lowest it's been in 50 years…

Why does that matter?
It's not ideal because productivity is what drives higher wages, better living standards and more money for things like schools, hospitals and infrastructure - so if productivity is going down, all those things take a hit too.

Can you give me an example?
Think of it this way: if a baker makes 4 loaves of bread per hour, in order to increase productivity, they'd need to increase their output to 5 loaves per hour using the same or less time and resources. By selling more bread, the baker would pay more tax, which means the government has more tax revenue to spend without having to raise general taxes. The baker also has more money to pay themselves and staff, and living standards go up.

What else was on the agenda?
The roundtable was also looking at ways to address our ageing population - over the next 40 years, the number of Aussies over 65 will double and those over 85 will triple. This means added pressure on health and aged care services, and fewer people of a working age contributing income tax, meaning less money to spend on infrastructure and services.

Any tensions going in?
There were some… In the lead-up to this, Chalmers was quoted as saying "all ideas are welcome" and "nothing would be off the table", but PM Anthony Albanese pretty quickly shut that down, saying that major tax reviews were most definitely off the table.

So people weren't expecting much?
Exactly. Because of that, some political analysts weren't expecting any huge reforms to come out of it.

But did they achieve anything?
As he wrapped up on Thursday, Chalmers was upbeat about it. He outlined “10 quick wins” and “10 reform directions” for the government to work on.

What's the common theme?
A focus on tax reform and what he called 'intergenerational fairness' - basically helping young people who feel like they've been handed a raw deal with high house prices, wages that aren't rising fast enough, and a changing work landscape as AI shakes things up.

Give me some of those quick wins…
The main one is ‘freezing’ part of the National Construction Code until 2029. The NCC is a set of design standards builders have to follow - it's 1,500 pages worth of very detailed requirements. By pausing changes, the government says it'll speed up housing approvals.

What about AI?
They also want to incorporate AI into the approvals process to clear a backlog of millions of development applications awaiting environmental impact assessments.

Any other ‘quick wins’?
Another one is a potential road user tax for electric vehicles (EVs) - the reason for that is because their drivers use the roads but aren't paying fuel excise, which is a tax on petrol that the government relies on for revenue. It's been going down with the uptake in EVs, so this new tax would help replace those losses.

What about the longer-term stuff?
The 'reform priorities' are a bit harder to quantify - they involve things like "better regulation" and "deciding how to make AI a national priority." Those are some pretty big buckets… 

Any progress on AI issues?
One interesting development was that unions and tech seemed to make progress on AI and copyright issues - the Secretary of the ACTU, Sally McManus, said unions had productive discussions with the Tech Council about how to move forward fairly on that.

What about tax reform?
Another key reform direction was "a better tax system", though what constitutes that is anyone's guess - there are a lot of differing opinions about what ‘better’ means in this context.

So it’ll be tricky to get agreement on…
Tax is definitely tricky… Especially because the government didn't take any sweeping tax reform policies to the election, and the PM was clear that there would be no major tax reforms before the next election. Maybe after that, though… 

So what’s the bottom line?
Whether this 3-day talkfest actually leads to meaningful economic reform remains to be seen - but what we do know is that there are plenty of things to be getting on with…

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Onto our Recommendations

Reading: Michelle Grattan’s piece for The Conversation includes a handy list of all 10 quick wins and 10 reform directions, in case you'd like to make your own government progress checklist.

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