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National Reform Agenda: Good deal for a better federation

01 May, 2007

"Industry will be looking to this week's COAG meeting for decisive breakthroughs in advancing the National Reform Agenda (NRA)," said Australian Industry Group chief executive Heather Ridout.

"The NRA proposals, embodying as they do a broad range of issues where national cooperation can deliver real improvements and enormous gains, can provide the basis for a better working Federation.  The Productivity Commission estimates that reforms in the competition and regulation areas alone could boost GDP by two percent. 

In today's dollars that works out at about $20 billion and adding longer term health and education benefits the gains could be up to five times this amount.  The net boost to government revenues could be as high as $5 billion per year.

"The Agenda, launched with great excitement some 14 months ago as 'a new wave of collaborative reform', has fuelled the work of 40 or so Ministerial Councils, working groups and other forums which have been active in trying to advance the program.  However, there is little certainty that this week's meeting will deliver anywhere near the extent of reform that is needed to generate the benefits that the Productivity Commission estimates could be achieved.

"For all the good intentions and hard work there appear to be any number of sticking points. There are political sensitivities to addressing the cross subsidies in road transport. Jurisdictional arguments are standing in the way of getting the best solutions to an integrated approach to urban congestion.

"Some States are reluctant to move ahead on reforms in the areas of power generation and transmission. There is also a reluctance to commit to regulatory improvements in an area as important as occupational health and safety and a lack of openness to reform is inhibiting progress in the health and education areas.  Some of the States seem to be reluctant to push the envelope on reforms to make their TAFE systems more autonomous and business-focused to better serve the needs of individuals and industry," Ridout said.

"On the Commonwealth's part there has also been the abandonment of one of the most successful features of the old National Competition Policy:  the money on the table to induce the States and Territories to keep on coming to the party.  The Commonwealth could probably achieve a quantum shift in momentum if it indicated it would be prepared to give the states half the extra tax revenue it will collect as a result of the reforms.

"There are significant challenges in the days ahead for all levels of government. It is imperative for them to take the big picture view and sign up to major reforms. The meeting on April 13 is not the last ever chance but it provides a real opportunity to show the way for the rest of the NRA program and for subsequent generations of collaborative reforms," Ridout said.

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