From Alan Mitchell of the AFR this morning:
Gary Banks’s 2013 Stan Kelly Lecture is a landmark of the public economic policy debate against which the performance of post-mining boom governments will be measured.
…The Coalition’s best chance is to generate the additional revenue from stronger workforce and productivity growth. Productivity growth will accelerate as the new mining projects come on stream but that already is built into the Treasury and Finance Department projections and it is not enough.
..But that will require Abbott to turn around the rising tide of rent-seeking behaviour that he, in his single-minded dash for power, has helped encourage.
Abbott’s promise to reverse the onus of proof in anti-dumping cases is highly irresponsible.
However, Abbott was raising the stakes on an already well-established game of distributing government preferment, with subsidies and anti-competitive favours going to car manufacturers, food processors, steel producers, coastal shipping, defence suppliers, alternative energy technologies and, most of all, the unions.
The signal to business is crystal clear: Grab your union and jump on a plane to Canberra; the Department of Handouts is open for business.
Spot on (though the issue of manufacturing is more complex given it is key driver of productivity). The Mitchell critique rather poses the question: what ideology drives Tony Abbott and his future government? It’s certainly not Schumpeter and creative destruction.
Abbott is socially conservative and there is little evidence to suggest he is economically liberal either. His carbon policies are based upon regulation not markets, his parental leave plan is based upon tax and redistribute, his northern Australia development plan has all the hallmarks of central planning and favoured vested interests. He’s adopted the Labour Party’s overly restrictive industrial relations laws, education policies and disability insurance scheme. His current budget position is some $35 billion more generous than that of Labor so, at this stage, he looks more Keynesian than fiscal conservative.
There’s a few tax cuts that suggest Tony has a penchant for miners and the wealthy which rudely approximates some kind of Thatcherite “trickle down” economics and maybe a bit of bastardised Lockean libertarianism. But he’s clearly no fan of Schumpeter, doesn’t follow the tenets Adam Smith any more than Labor does and as a religious fellow has little in common with other English pragmatist philosophers or later French Revolution liberal radicals.
None of this is necessarily meant as critical. But what exactly is Abbottism? Professional politics?
