EDITORIAL: Hopes are fading roundtable will deliver reform

Treasurer Jim Chalmers hopes his economic reform roundtable will put a rocket up the Australian economy, boosting our nation’s ailing productivity.

To listen to his boss however, that rocket may turn out to be more of a damp squib.

Anthony Albanese moved to temper expectations around the reform festival on Monday, downplaying its importance to the Government’s agenda.

“To be very clear, it’s not a meeting of the Cabinet; we just had one of those. It is a meeting in the cabinet room,” the Prime Minister said.

“I expect that there’ll be a whole range of ideas put forward, much of which is contradictory with each other. So it’s fine. In a democracy, we shouldn’t be frightened of people being able to put forward ideas.

“We should not be frightened of ideas. It doesn’t mean that they’re Government decisions we’re making, because they’re not.

“This is a roundtable and just that. No more than that, not a replacement of the Cabinet, we are not contracting out our decision-making processes. What we will do is be prepared to listen as we always are.”

It seems unlikely Dr Chalmers is going to get his Keating moment

Fair enough too; Australians elected him as Prime Minister in May, not a cadre of trade union bosses, industry lobbyists and public service economists.

But it’s hard to interpret his remarks as anything other than a caution against buying too much into the hype.

Mr Albanese’s comments are in contrast to those of Dr Chalmers, who has spoken of his desire to “grasp the nettle” to shove the country in the direction of bold reform.

The Productivity Commission has certainly taken the Treasurer at his word.

The first of five major reports commissioned to inform this month’s roundtable argued for a bold reworking of Australia’s corporate tax regime.

Released last week, it proposed that Australia lower the company tax rate to 20 per cent with revenue below $1 billion, while offsetting the budget losses with a new 5 per cent tax on net cashflows, which the Commission says would provide an incentive for companies for reinvestment in capital expenditure. The company tax rate for Australia’s largest businesses, with turnover above $1 billion, would remain at 30 per cent.

The commission has modelled that the changes would have a minimal effect on the budget, while boosting GDP by $15 billion.

It fits the mantle of “bold reform”.

But that proposal attracted the ire of big business, which warned it could result in Australian consumers paying more for essentials including groceries and fuel.

Dr Chalmers has spoken repeatedly about his desire to “build consensus” before implementing any major economic reform.

Given the competing priorities among those invited to the cabinet room at the end of August, that is a near-impossible task.

And with Mr Albanese now also moving to temper expectations, it seems unlikely Dr Chalmers is going to get his Keating moment after all.