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Is the Morrison Government Running Out of Puff?

What has happened to the Morrison government’s reform agenda? It appears that the national cabinet has become bogged down in the COVID 19 crisis and is reluctant to take the bold moves necessary to get the economy back to growth and rising productivity.

There seems to be general agreement that the health crisis needs to be fixed before economic recovery can occur. However, on Monday, Graham Turner, founder of Flight Centre, published an article in the ‘Australian’ that argued we need to learn to live with the virus while we open up the economy. Mr. Turner says we have to open up the economy to domestic and foreign tourism while at the same term learning to contain the virus through more effective contact tracing and personal hygiene.

There would be greater confidence in this strategy if the Covidsafe App was effective in isolating clusters of the virus. However, the evidence seems to be that the App is of little or no use. On Channel Nine on Monday it was reported that there was no contact tracing using the App for any of the clusters in New South Wales and Victoria.

Turner’s solution would undoubtedly have a positive impact on the travel and tourism sector but there is no compelling reason why it should lead to a revival of consumer confidence or a wave of new investment. When the National Covid-19 Coordination Commission was established it was charged with developing reforms in the energy, manufacturing, and finance sectors as well as skills training and tax reform. So far there has been no indication of any bright new reform idea emerging. Instead, key participants are indicating that they are reverting to the status quo positions that stifled growth in the economy.

Last week ACTU secretary Sally McManus announced that she would oppose the bringing forward of tax cuts unless the government agreed to the extension of jobkeeper for an additional four months. She also indicated that she would not agree to the extension of the suspension of awards.

As she said in a message to workers:

“It is essential that working people know they have people in their corner and who are committed to protecting their interests.

“Working people are concerned about their take-home pay and having confidence they will be protected and supported at this time.

“Some in the employer lobby have been publicly arguing for permanent cuts to workers’ rights and take-home pay. These are cuts that would be passed onto the next generation and be felt long after the coronavirus passes. The union movement will not entertain these extreme claims. Where sensible changes and improvements can be made we will work constructively with employers and the Government to achieve them, but we cannot accept anything that would entrench inequality.”

The Technology Investment Roadmap Group has given no indication of what it intends to recommend by way of reform to our expensive and unreliable electricity grid but the government has ruled out using nuclear power to support the transition to sero emissions. It seems to want to promote the use of gas but there is no indication that the states will lift their restrictions on gas exploration.

The NSW treasurer Dominic Perrotet has put forward a proposal for tax reform that involves the extension of the GST. However, the Morrison government has already squelched this.

It is hoped that when the Prime Minister gets back from his holiday next week he will have a new appetite for reform.

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