In my more cynical moments, I have a horrible suspicion that we our losing our capacity for major economic reform.

And by reform I mean the real stuff, the hard stuff that costs governments support and seats, the sort of reform that political realists roll their eyes at.  Some reform — valuable reform — is easier; usually it involves spending more money, either temporarily or even permanently.  Paid parental leave, for example — a significant economic reform that will lift female workforce participation — is an easier reform to sell to the community than, say, tax reform or removing industry protection, where the losers will raise hell.

That’s partly because the template for how losers should oppose economic reform is now well established.  This what you do:

  1. Commission a report from one of the many of economics consultancies that have broken out like a plague of boils in the past decade.  This should feature modelling demonstrating the near-apocalyptic consequences of even minor reform.  Even if your industry is growing strongly, you should refer to any lower rates of future growth as costing X thousands of jobs, without letting on that those jobs don’t actually exist yet, and might never exist due to a variety of other factors.
  2. Dress up the report as “independent”, slap a media-friendly press release on the top and circulate it to journalists before release, with the offer of an interview of the relevant industry or company head.
  3. Hire a well-connected lobbyist to press your case in Canberra.  When the stakes are high, commission some polling to demonstrate that a crucial number of voters in crucial marginal seats are ready to change their vote on this very issue.

But if we take a step back, we should also remember that economically reformist governments are the exception rather than the rule in Australia.

At the federal level, only the Whitlam government, on protectionism, the Hawke government on financial deregulation and protectionism, the Keating government (IR, superannuation, privatisation and competition policy) and the Howard government (Reserve Bank independence, IR, privatisation and tax), can lay claim to strong records.  And in each case, their reform achievements were partly offset by second-rate decisions in other areas — think Kim Beazley’s awful telecommunications reforms, or Howard’s middle-class welfare.

Moreover, the Hawke/Keating record comes with an asterisk — they had the support of a reform-minded Opposition, except on superannuation.  Howard and Costello, in contrast, had to push reform through against Labor opposition.

Peter Costello was the last of that reform generation.  There remain survivors on both sides from the 1980s and 1990s, of course, but they’ve now mostly been replaced by the next generation of MPs, and the party leaderships on both sides has now moved to politicians who either entered Parliament after the bulk of our most important economic reforms had been completed — Kevin Rudd — or give no indication of interest in economics — Tony Abbott.

This new generation is yet to prove itself on hard reform.  Doubtless they are cautioned by the example of Workchoices, where Howard lost his head and pursued not an economic reform — there was no demonstrated case for IR reform after 2004, based on wage or industrial disputation data — as a final venting of the anti-union malice he had harboured since his own days as Treasurer.

But if we take an emissions trading scheme as an example — bearing in mind an ETS removes the carbon protectionism embedded in our current economy — our current Parliament has failed miserably.

Remember we started with a bipartisan consensus in favour of an emissions trading scheme.  On that basis, how we’ve ended up further away from an ETS than ever must rank as a public policy disaster of the first order.  The government’s own scheme started life as a fairly poor but workable response to the long-term challenge of taking us from being one of the most carbon-dependent major economies to the sort of low-carbon economy we eventually must become.  It was then neutered by the government in response to a successful campaign by rentseekers and big polluters, allied with the conservative media.

But the government was also determined to exploit climate change politically, seeing not the bipartisanship bequeathed by Howard on the issue but an opportunity to split an Opposition that could barely keep itself together anyway.  When, eventually, the government began seriously pursuing passage of its Bills with the coalition and, more to the point, the political protection of joint ownership of the scheme, the coalition had reached a near-terminal state of fracture on the issue, paving the way for a climate denialist to take the party leadership.

It wasn’t just a tactical failure on the part of the government, it was a communications failure.  The government had also badly faltered in its efforts to sell its scheme, with the hectoring, unimaginative Penny Wong as the public face of the government’s efforts to address climate change, leaving a gap that climate denialists, with a far simple message based on lies, dodgy graphs and doubt, happily filled.

Quite a contrast with Hawke’s and Keating’s efforts to sell economic reform, with Hawke providing comfort and assurance to voters and Keating’s formidable salesmanship directed at the commentariat and industry.

This doesn’t excuse the deluded and malicious denialists among the coalition.  But there are always opponents of reform.  There are always vested interests and opportunists ready to oppose genuine reform.  Often they’re to be found within your own ranks.  Out-thinking them is part of a real reformist’s job description.

Tomorrow: what does this mean for our most significant emerging issue, housing?