One year isn’t enough – why the government needs to keep up the pace of economic reform

One year after convening its economic reform roundtable, the Australian government still has work to do to keep up the pace of reform, according to the Grattan Institute. The roundtable, which followed extensive submissions, meetings, and ministerial gatherings, aimed to drive a more prosperous Australia by tackling productivity, economic resilience, and budget strengthening. Despite the challenges and distractions, some progress was made, particularly in the area of tax reform.

Treasury chief Jim Chalmers highlighted the capital gains and trusts reform package as the government's top achievement. These reforms, which replace the previous 50% capital gains tax discount with an inflation-based discount, restrict negative gearing to new properties, and set a 30% minimum tax rate on capital gains and trust income, are expected to have a significant impact on the budget bottom line. This, in turn, could help reduce the budget deficit and provide tax relief for working Australians.

While the government has made strides in various areas, such as updating the National Competition Policy, reforming environmental protection laws, and abolishing paywalls for Australian Standards, there is still a long road ahead. Productivity, a crucial factor in economic growth, faces challenges that governments cannot directly control. However, each measure taken, no matter how small, should help lessen the drag on productivity.

The government must now focus on fostering a culture of reform both within its own ranks and across society. Building this culture will require transparency and candid discussions about the challenges facing the nation, similar to the approach taken by New Zealand's tax officials. By embracing this culture of reform, Australia can work towards a more prosperous future.