Flat White

Hire two new pen-pushers: that’s economic reform, NSW Liberal style

21 March 2019

7:38 AM

21 March 2019

7:38 AM

Last May at the New South Wales Business Chamber, Treasurer Dominic Perrottet announced with great fanfare the state would establish its own Productivity Commission. The business community and voters were told the NSW equivalent of the federal body would examine measures to address housing affordability, escalating living costs and policies to make the state a more competitive place to do business.

Almost a year later we’re still none the wiser about this new organization’s institutional structure, what it has accomplished since being brought into existence and whether it will be publicly releasing any of its findings. What we do know is that taxpayers have been billed $2.8 million to create the NSW Productivity Commission and it appears to amount to little more than additional staff within the Treasurer’s own department. There’s been not one word of recommendation about how to make doing business in the state easier.

Of course, any effort to establish a state-level equivalent to the federal Productivity Commission would be welcome. Independent, authoritative and expert advice to government operates to keep politicians accountable and provides guide rails for public policy that even journalists seem to respect. Such additional guidance at the state level is sorely needed, as the policy drift of recent years attests.

The limited information we do have about the Treasurer’s thought bubble is that Peter Achterstraat has been appointed the inaugural NSW Productivity Commissioner and Stephen Walters has been slotted into a newly created position of NSW Chief Economist. However, hanging spiffy titles off hand-picked public servants that report directly to the Treasurer does not a Productivity Commission make.

These appointments appear to be merely additional Treasury Department roles and seem to have no statutory or substantive independence from the Treasurer. A key feature of the federal Productivity Commission is that it is independent of the government of the day and has an institutional framework that establishes that independence in legislation. Bolting a few extra warm bodies onto the NSW Treasury fails miserably to meet any standard of independence.

Perrottet in announcing the creation of his NSW Productivity Commission stated that the new body was being set up “with the aid and advice of eminent Professor Gary Banks”. Banks is the widely respected former head of the Commonwealth Productivity Commission. Had the Treasurer actually sought the guidance of one of Australia’s most distinguished and trusted public servants, he might have come up with something more robust and intelligent than a handful of extra Treasury staff.

Banks it turns out was merely invited to express his views on the government’s plans, a level of involvement far removed from that suggested by Perrottet. It’s particularly humiliating for the Treasurer to be caught out verballing a figure as illustrious as Banks. Seeking to burnish your lacklustre policy credentials by falsely associating your ill-crafted policy prosthetic with an economic luminary is embarrassing behaviour for a state Treasurer and betrays deep insecurity about his own abilities.

All of which speaks to the likely intended role of the NSW Productivity Commission, to act as a stand‑in for the Treasurer’s own lack of leadership. Presumably, this came with the expectation that the body and its key staff would also wear the political damage that comes with making the case for difficult economic reforms. Keeping the organisation within his own department enables the Treasurer to ensure that he maintains control and that the Kabuki theatre exercise never gets out of control and makes his life more difficult politically, the way a genuinely independent Productivity Commission would tend to do with its objective advice. So much for the Liberal Party being the party of small business.

None of this is to detract from either the NSW Productivity Commissioner or the NSW Chief Economist themselves, both of whom are accomplished economists and professionals in their own right. However, the sad fact is they are being used as hand-puppets by the Treasurer to make up for his own leadership inadequacies.

At his core, Perrottet is a lawyer and his understanding of economics is limited. His lack of a solid economics background appears to underlie his evident lack of confidence. The attempt to outsource leadership and accountability to surrogates within his own bureaucracy is a dereliction of duty but no doubt seems like intelligent political strategy within the spin factory of a political office.

All we know of the NSW Productivity Commission and its activities since its inception is that, apart from preparing some internal briefing, it has acted as a $2.8 million-dollar post-box for receiving ideas from the community about what the Treasurer’s government should be doing to lift productivity. Its sole substantive function appears to have been to enable the Treasurer to announce that he’s created a Productivity Commission, even if it’s a Productivity Commission in name only without any of the distinctive features of such a body.

Certainly, the NSW Productivity Commission, so-called, has kept a low profile since entering the policy landscape. It has issued no reports or policy recommendations. Given the staff of the body appear to report directly to the Treasurer in the same way that other Treasury officials do it’s not hard to guess as to reasons why. There were likely told to do whatever suited the Treasurer politically, like all bureaucrats.

Barring any evidence to the contrary, we are left to conclude that the organisation is little more than a sham. At least that would provide some insight into why the broader policy direction from the government is so poor. So much for the NSW Productivity Commission making it easier to do business.

Dominic Perrottet is an ersatz Treasurer, hiding behind an ersatz Productivity Commission, providing ersatz leadership in the face of an anti-business opposition that threatens to turn the state over to union rule. Conservative voters looking for real leadership at the upcoming election have no choice but to look to alternative parties like the Small Business Party. Unlike the Treasurer we won’t be found hiding behind bureaucrats when advocating policy.

Angela Vithoulkas is the Founder of The Small Business Party and Lead candidate for the NSW Upper House.

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