OPINION PIECE: Recent policy making has not been best practice



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This opinion piece by CEDA, Chief Executive, Professor the Hon. Stephen Martin was published online by The Australian Financial Review on 20 August, 2013.

SM2013To put it bluntly Australia's recent policy making has not been at a best practice standard. The Federal election campaign is the perfect time to examine and reflect on the role of leadership in public debate and the crying need for the implementation of substantial policy change to sustain Australia's future.

It is vital that Australia rediscovers its ability to clearly identify and implement challenging economic reforms. As the stimulus from the mining boom fades, Australia's prosperity will become increasingly subject to the pressures of the international marketplace. This will occur in an environment of heightened human and financial capital mobility and fast paced technological advances that can rapidly undermine sources of traditional comparative advantage. Whether recent economic success fades into memory or continues will be substantially determined by the quality of policy implemented by government.

Reasons for the decline in the quality of public policy debate and execution include the heightened emphasis within political parties on opinion polls and responding to perceived popular opinion, changes in the media landscape and its influence on public information, and changes in the relationship between the public service and politicians.

Politicians must lead if they are to implement a long term vision rather than short term reactive policies. They must have the courage to take reform ideas to the public, explain them in detail and persuade people to support their policy, not just their personality. They must make the hard decision to deliver effective reform and policy management to ensure the country's future prosperity.

Research undertaken by the Committee for Economic Development of Australia (CEDA) released this week provides a starting point for how leaders can successfully implement economic reforms. The report highlights the need to engage with key groups within the reform process - cabinet, the public service and most importantly the Australian people.

In examining leadership styles the research notes that previous leaders including Bob Hawke and John Howard implemented difficult reforms with the support of these key groups and a number of success factors can be identified from these experiences.

It is imperative an effective leadership style is adopted in the development and execution of reform. Former Prime Ministers Hawke and Howard had the vision to foresee economic problems and requirements before others. They had the ability to engage and persuade people to adopt policy before it was needed or at exactly the right time.

A significant part of implementing and developing reform is to create a sense of urgency for economic change. This includes developing a carefully developed communications and government strategy which enables Australia to accept change.

Another key element of successful leadership is having a cohesive set of values and a clear philosophy that determines the direction of policy and the country. Cabinets and internal discussions should be used to test ideas and garner support for proposals.

For example, when Hawke began to develop the Prices and Income Accord evidence analysis was used as the foundation of policy proposals. His government also centralised planning and collaboration with key stakeholders such as the ACTU.

Forward thinking, evidence and meticulous planning are not the only characteristics of successful reform. So too is a leader's ability to engage and empower others to act. Once there is widespread support for economic reforms in the business community and public service, it becomes easier to develop public understanding.

It is also important to note former leaders and politicians enabled an environment of bipartisan support, putting aside political differences for the sake of the economy and long term prosperity. Our current leaders must also set aside political differences and negative rhetoric to develop a climate in which long lasting public policy can be developed for the benefit of all Australians.

Previous leaders have made the hard decisions, to implement reforms such as financial deregulation, tariff reductions, taxation changes, superannuation and workplace relations. As we enter the next phase in Australia's economic cycle, our current leaders must do the same. In the lead-up to 7 September both the Prime Minister and Leader of the Opposition must present clear, well communicated plans for economic reform to ensure Australia's future.

Now is the time for Mr Rudd and Mr Abbott to engage in meaningful public policy discussion and become leaders rather than be pre-occupied with opinion polls and the 24/7 media cycle.

This opinion piece by CEDA, Chief Executive, Professor the Hon. Stephen Martin was published online by The Australian Financial Review on 20 August, 2013.

To read more about CEDA's Setting Public Policy report click here.