Champion of an open and competitive economy

After decades of protectionism, Australia has begun to embrace the open and competitive model, first through the Whitlam Government’s across-the-board 25% tariff reduction, but globally through the Hawke-Keating Governments’ tariff reductions and the elimination of import quotas.

The Howard government finalized the process by reducing tariffs to a maximum of 5% and in many cases to zero.

Throughout this time, the Financial analysis supported the creation of an open and competitive Australian economy. In Bob Hawke’s office, we welcomed the many columns of support from a bespectacled and slightly younger Michael Stutchbury when many media outlets attacked the Labor Party’s reform agenda.

The proposition that ministerial cabinets are smarter than the market in allocating scarce resources is absurd.

But today, the open and competitive model is under renewed pressure. Geopolitical tensions between the West and Russia and China, the rise of Trumpism in the United States, the malfunctioning of the WTO and the clamor for economic sovereignty created by the COVID-19 pandemic threaten a backsliding towards protectionism .

So far, the pushback has come in the form of government subsidies to businesses. Frankly, the proposition that ministers or ministerial staff members are smarter than the market in allocating scarce resources is nonsense.

The government has a role to play in circumstances of true market failure, such as research and development, where business initiators are unable to capture the full benefits of the activity and therefore will not provide them enough. But decisions on which proposals to fund and which to reject must be made by qualified officials, independent of politically motivated ministers.

The repudiation of liberalism

The decision of a minister in Morrison’s government, Stuart Robert, to block university research projects with which he personally disagreed set a shocking precedent. Vetoing research projects that do not accord with the government’s political philosophy is Stalinist, a repudiation of liberalism.

While sovereign capacity is an understandable sentiment in a time of geopolitical tensions and a global pandemic, it should not be used as a pretext for new protectionism and an excuse for governments spending taxpayers’ money on projects in the main purpose of increasing their chances of retraining. -election.

While the Financial analysis over the years has been pro-business, he understood the difference between being pro-business and pro-competition. You can make a lot of money from anti-competitive behavior, but the Financial analysis supported pro-competition reforms such as Australia’s Competition and Consumer Law.

the Financial analysis saw climate change as a plot by the left to destroy the capitalist system. His new series on the opportunities for Australia arising from the transition to a low-carbon future demonstrates his focus on analysis rather than partisan ideology.

Open and competitive travel with the Financial analysis had a few potholes. She was troubled by unionism and mandatory pensions.

Unless the benefits of productivity-enhancing economic reforms are shared equitably, workers’ interest in and tolerance of the reforms will vanish. As became clear with Work Choices, fair sharing is not a feature of a system dominated by individual contracts.

Mandatory retirement relieves much of the pressure on the taxpayer-funded old-age pension. As Australia’s population continues to age, the surging number of older pensioners in the absence of mandatory retirement would become an irresistible pressure group. These voters would demand and receive large increases in the old age pension, which would require large increases in taxes.

In the event of a political disagreement with the Financial analysis exist, they are tolerated, not repressed. This tolerance of well-considered alternative opinions is perhaps the reason Financial analysisis the greatest strength. He has no interest in culture wars or in excluding progressive thinkers from his pages and condemning them as “woke”.

That the Financial analysisThe anniversary dinner brought together three former Liberal and Labor prime ministers, two former treasurers, the Federal Treasurer and the Shadow Treasurer, as well as current and former Reserve Bank Governors, business leaders and senior government officials , says a lot about the respect the newspaper has earned over its 70 years.

In a troubled world, the Financial analysis will be called upon again to support and defend the open and competitive model.

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