Comment

A lot to prove ... the Coalition.

A lot to prove ... the Coalition. Photo: Andrew Meares

Real government policy - not the slogans tarted about in the election - is up for grabs over the next several months so the good and the grubby alike have been putting their bids in. The early bird catches the minister.

Of course the most dedicated players - those with something to protect or wanting to get something to protect - are always at the game and were working on the government when it was the opposition. The process now though moves up a step and goes much further than the headline possibilities of commissions of audit and financial system reviews and specific Productivity Commission references. With numerous posts still unfilled amid the confusion of opposition becoming government, every vested interest and its lobbyist are offering their very best “advice” - along with shiploads of special pleading.

How open the possibilities are can be measured by the phrase “no plans”. Areas of “no plans” fill the vast space beyond the election's specific promises - theoretically uncharted territory, ripe for a cunning squatter to grab.

This is an accidental discovery made while searching for a specific quote about when the possibility of expanding the GST went from “no plans” to “no”, well, to “no until the states demand it”. Turns out you can have a lot of fun by Googling “SMH Joe Hockey no plans”. There are chortled-filled gems such as “No plans to cull the bureaucracy” back in May and sad passing betrayals of principle - after a brave moment questioning the family trust loophole in 2011, Joe had to clarify that “the Coalition has no plan to alter the tax treatment of trusts”.  No, Eddie Obeid didn't get to him - it was the Nationals and the conservative end of the Liberal Party who understood and protected a good tax lurk when they saw one.

It's hard to imagine the Coalition having a taxation review that recommended anything disruptive about their family trusts and, if it did, such a recommendation would quietly sink traceless. So “no plans” can sometimes mean “no” and sometimes mean “maybe”. The latter is when there's an invitation to others to provide a plan.

There was a flurry of that last week with the Productivity Commission's excellent research paper on ageing Australia and its costs, followed closely by the Grattan Institute's related contribution on responsible budgeting as we age. There were others already active in the space, for example the Centre for Independent Studies has prescribed an “Emergency Budget Repair Kit”  for the new government and out on the far Murdoch/Bolt/Rinehart edge of the right, the Institute of Public Affairs has long had plans for ending taxation and selling off the poor.

Predictably and honestly, a spokeswoman for the Treasurer was quick to reassure that the government “had no plans” to change the pensionable age. They're nowhere near close to thinking that far down the track.

But like the Henry tax review, the important and difficult ideas tend to be too difficult for politicians whose primary interest is immediate power. On the evidence before the court, that's the majority of both sides. How easy it was for the superannuation industry to scare both sides into a five-year moratorium on changes, even when the industry peak body itself acknowledges the need for some unpopular improvements.

Maybe such matters were what the Productivity Commission chairman, Peter Harris, had in mind in his foreword to the ageing paper when he warned:

“The policy issues are carefully chosen to address needs that if not immediate, will necessarily be so tomorrow. The intent is that the paper supports an informed discussion and leads towards policy thought in anticipation of need, rather than in the face of it.”

The good are doing that - trying to get policy thought about and in place ahead of a crisis that will force more expensive remedial action. While there are “no plans” to increase the pension age or remove the family home's sacred cow status, the possibility exists to influence a new government to at least not say “no”.

The not-so-good are just busy protecting their patch and privileges, absent of policy principles. The “salary packaging” industry comes to mind, along with the wealthy few fortunate enough to live in a tax haven via the current superannuation system.

In the short term, the not-so-good seem to be winning, but the good are in there trying. They need to be. The case for politically difficult policy has to be steadily built, backbones have to be constructed for politicians. While they're in the “no plans” stage, there's hope that they might be brought to at least look at a blueprint.

Any half-reasonable person considering the demographics outlined by the Productivity Commission has to conclude that we need both tax and spending reform. The current crop of handouts, lurks, rorts and well-meaning largesse simply is not sustainable.

The official audit/inquiry/report season we're embarking on will provide opportunities to build the cases for the required changes and flesh them out, but it will be a test of the integrity of all those involved that they perform with an eye to the equitable longer term and none at all to present politics. Quick examples: the Productivity Commission's childcare inquiry will be second rate if it doesn't include a solid analysis of optimum maternity leave policy; the taxation review will be tainted if it doesn't include a comprehensive consideration of superannuation. Oh, and don't forget the motor vehicle FBT arrangements that have just been reinstated.

Michael Pascoe is a BusinessDay contributing editor.