COAG reforms will improve Australia’s productivity

The reforms outlined in COAG's report, Seamless National Economy, will assist in improving productivity by "saving money, driving the economy, and by widening opportunities for people to live and earn a living in this country", COAG Reform Council, Chairman, Paul McClintock AO told a CEDA audience in Melbourne.

"This report is three years into a four-year agreement. Where government stand on some of the key reforms now, and how they respond over the next 10 months will mean the difference between achieving the outcomes COAG set down in 2008 or failing to do so," he said.

Of the 49 reforms in the COAG report, 37 are well underway or have already been completed.

Some implemented reforms include:

• A standard business reporting system;
• A national system of trade measurement;
• A national system of registration and accreditation of health professionals;
• National rail safety regulations;
• The regulating licensing supervision of trustee corporations;
• The regulation of consumer credit (eg Mortgage broking);
• Three transport intergovernmental agreements;
• Heavy vehicle regulatory reform;
• Commercial vessel safety reform; and
• Business name registration scheme.

Mr McClintock warned that 12 reforms were at risk of not being completed by the December 2012 deadline. However, he said it was important all reforms are introduced as they will assist in improving productivity growth.

"Australia had a labour productivity growth of 1.5 per cent over the past 10 years to 2009-10 compared with 2.1 per cent in the previous decade. Our international position in productivity growth has been falling," he said.

"Australia cannot stall these reform commitments in the face of this uncertainty and we must keep on building on it. It is essential we address the underlying productivity challenges, and put in place measures which encourage productivity growth, flexibility and competition.

"We must focus on areas where we have the potential to lift Australian productivity, and identify and introduce measures to facilitate economic reform and growth.

"It's time for COAG to deliver results in the areas that matter most for the national economy by prioritising its focus on the reforms that will have the greatest impact on lifting Australia's productivity and national competitiveness.

"I think there is a tendency to over rely on COAG to take on the heavy lifting in relation to productivity reform and ignore the fact that most productivity reform as far as government is concerned is done at the individual government level and not at a national reform level."

Mr McClintock warned that without a more political and bureaucratic focus and commitment, the Council is concerned that the 12 reforms at risk won't be achieved.

"It is incongruous that at a time when lifting productivity is so important that the delivery of these reforms should be at risk," he said.

"The Productivity Commission estimated regulation priorities and competition reforms could boost economic output by two per cent of GDP.

"Seventeen of the vocation and education reforms could reduce business costs by $4 billion a year when fully implemented.

"If the Department of Deregulation and Finance were to introduce 10 of the reforms, it could add $3.5 billion to the economy and $1.8 billion in savings to business."

Some reforms at risk include:

• Occupational health and safety harmonisation reform;
• Mine safety reform;
• Director liabilities reform;
• The regulation of the legal profession; and
• Competition reform for the energy sector.

He acknowledged that real reform requires commitment and leadership from all sectors.

"Business needs to be a lot more effective in interacting with this process. It has been hard to get business to coherently focus on contributing to this process, and keep the pressure on state governments," he said.

Mr McClintock emphasised that for benefits of the reforms to be truly felt, COAG wants all reforms to be completed and, 80 per cent complete isn't good enough.