TERRY MORAN. The next long wave of reform — where will the ideas come from? Part 1

I want to talk about, what I’m going to describe as a mission – Australia’s next long wave of reform. It is this third wave of reform which must bring us to a compact on the big ideas which will drive policies and programs at all levels of government and within our national community for a generation. It should give effect to consistent Australian attitudes on government and democracy described by Rebecca Huntley in the latest Quarterly Essay, citing CPD’s research prominently.  

I hope this third wave may have something of the impact we experienced from the second wave.

In the late sixties, we started a long national conversation. Over fifteen years economists, some journalists, academics, government economists (mainly from Canberra), leading business and union figures and a few parliamentarians began to debate how to energise Australia and open it to the world.

But, we are now established on a descending path of trust in our parliamentary and political institutions.

  • 70% of Australians don’t think their elected representatives are serving their interests.
  • 75% of Australians believe our politics is fixated on short-term gains instead of longer term challenges.
  • Just 20% of Australians think the only responsibility corporations have is to create value for shareholders.

We have reached a point where general public support for the second wave of reform has dissipated.  Yet we are in aggregate prosperous and something of a national economic success story. Why then are so many Australians grumpy?

Well, seen from a community perspective:

  • the proceeds of economic activity have shifted from families to business, with wages stagnant;
  • the outsourcing of Commonwealth service delivery to the private sector (for example, employment services, aged care and VET) has failed and it is clear Canberra knows this;
  • reduction in the value of key benefits, such as those received by the unemployed, has left large numbers without dignity and hope;
  • social housing for those displaced and impoverished by Commonwealth reforms was neglected while we led the world in rising house prices;
  • the Commonwealth has been very late to recognize the consequences for our larger cities of rapid population growth flowing from the time of Peter Costello’s Intergenerational Reports;
  • too many corporations have become rent seekers with little serious commitment to investing in R&D, product and service innovation and staff training (all of which are in aggregate decline across the private sector); and
  • until recently, many of these corporations have been at the heart of deflecting attention at the political level from what most Australians believe is a must do reform in the third wave –  urgent attention to decarbonizing our economy.

Democracy’s Triple Helix

You may be familiar with the concept of the triple helix, used to model University-Industry-Government collaboration.

I want to use the triple helix as a metaphor for critical relationships between the strands of Australia’s democracy on which the future of our country depends.

Firstly, Institutions, which embody the health and vibrancy of our representative democracy, its parliamentary expression and the professional and ethical public sector agencies accountable to parliament through Ministers. Trust in these institutions sustains legitimacy. But this extends beyond public institutions. Royal Commissions and inquiries into the Banks, Aged Services, Child Sexual Abuse, and now VET tell us that private and community institutions matter too.

Secondly, Big Ideas, which respond to long term challenges and give birth to major policies and the effective program initiatives which define what governments do in the community and the economy. Those ideas also define how government works in concert with industry and civil society. Nation Building and then economic thought reflected different sets of critical big ideas. They were right for their time.

Thirdly, Delivery: the efficacy, honesty and accountability of public administration and the institutions of which it is comprised and the quality of their services.

The Axis of the triple helix is the legal foundations, conventions, values, expectations, democratic practices including public discourse, and the acceptable path to the future on which most agree. Taken together, these are accepted by the community generally as the rules of the game — the boundaries defining what is acceptable.

We know quite a lot from CPD’s attitudes research over the past two years about the public’s view of the axis of the triple helix. And it isn’t captured by the slogan “Aussie Rules” carried on the front page of The Economist last October — even that article articulated the growing uneasiness Australians feel about the future.

The results of CPD’s attitudes research suggests to me that, to a varying extent, institutions, big ideas and delivery are now weak reflections of the axis of our democratic system – the views and expectations Australians have of their democracy.

Importantly, the axis of Australia’s democratic system is not the same as the axis of the American democratic system. It’s not the same as the ever-shrinking axis of Britain’s Brexit democracy.

What we have found is that Australians don’t want to blow up their democracy, they want to save it. When Australians are asked what they think the main purpose of democracy is, the answer twice as popular as any other is “ensuring people are treated fairly and equally, including the most vulnerable in our community”.  This is actually the Australian story from times past and it remains valid.

In my view, a big problem is the absence of agreement on the big ideas to drive the next long wave of policy reform designed around an Australia which citizens aspire to live in.

Certainly, institutions and delivery need reform but this is best done in the light of agreement on where we are to go — what the light on the hill is, and where that light is.

There is much around at the moment on improvements to the systems and processes of Australian democracy. I think some of the suggested reforms have value but will not in isolation solve the problem. Much of it is embroidery at the edge of the real debate we need to have.

To be clear: we’ve reached the end of a nearly 50-year policy cycle, dominated by ideas derived from macro and micro economics. Community sentiment has swung away from the primacy of light touch regulation of markets, the unexamined benefits of outsourcing, a general preference for smaller government, and a willing ignorance of public sector values and culture as a means of underwriting commitment to the public interest and the needs of communities.

Instead, there is increasing acceptance of a larger role for government, including involvement in service delivery, more effective regulation and bolder policy initiatives. Australians want government to be active and collaborative players, not just investors or market fixers. We know they support reinvestment in the delivery of essential services. Interestingly, local government is now trusted more than the Commonwealth Government.

The changes ahead will be comparable in their breadth to our national experience of economic and social reform from the early 80s to the late 90s. That period of immense change transformed Australia. Just like then, we’re going to need fresh ideas. Big, bold ideas which can drive new policies and the programs to foster a more sustainable economy and greater wellbeing across society.

Missions’ Mindset

You may have heard of Mariana Mazzucato, an economist CPD hosted for her first Australian tour last year. Mariana’s work on the entrepreneurial state and public value has struck a chord worldwide — from Martin Wolf, Theresa May, the EU, and even new American congresswoman Alexandra Ocasio-Cortez. Mariana made a big impact in Australia, speaking to around 2000 people and briefing the heads of the CSIRO, Clean Energy Finance Corporation, the Chief Scientist, senior public servants and the Shadow Economic Team.

Mariana doesn’t just speak of bold ideas. She speaks about missions and moonshots. It’s another way — perhaps a more powerful way — to describe the light on the hill and a story about Australia all of us can believe in. A mission is something we can all buy into, not just watch.

Mariana’s work urges governments, industry and the community to identify core “missions” and go for them. Her missions framework doesn’t pit government against business or the community. It doesn’t speak about picking winners. It picks the willing — those in our society who believe in a better future for all Australians who are prepared to chance their arm (and balance sheet) to get there. Interestingly, philanthropic foundations have already started to play a role in helping to shape possible missions and underwrite a collaborative model to achieve them.

My view is Australians want government to seek tailored, smart, creative solutions that draw on the experience of civil society, business and the public. They want missions. They want government to admit they don’t have all the answers and organise the search for them. And they must work across departments and other levels of government, industry and the community to find the best entry points.

It’s precisely this frame we need to think about Australia’s next long wave of reform.

What are our missions?

Tempting as it is to invent a set of big ideas to frame the third wave of reform, I can only mention those things I believe are strong candidates.

  • Decarbonizing our economy;
  • Equipping our workforce and businesses with the capabilities to succeed in the new digital era,
  • Finding a new configuration of national security and diplomatic relationships for Australia as China and the US struggle for dominance in our region.
  • A new emphasis on successful integration of new national, ethnic and religious communities into an Australia which has dropped the ball on settlement. To this we must add our shameful failure with respect to empowering indigenous communities and embracing the Uluru Statement from the Heart.
  • An approach to national economic development which emphasizes goals of national competitiveness, regional integration and a fuller embrace of the region and its peoples in all their diversity.
  • Subsidiarity, driven by a respect for individuals, families and communities seeking to find comfort and support in local connection within new approaches to governance and service delivery.

In fact, I want to suggest that subsidiarity is one imperative to underpin success. I see it as a means of providing new respect for communities at the local level while equipping them with resources, strategies, systems and opportunities to work within local community and business networks and systems of democratic accountability.

Terry Moran AC FIPAA is Chair, Centre for Policy Development.  He was formerly Secretary of Premier’s Department in Victoria and Secretary, Prime Minister and Cabinet in Canberra.  

The above is edited extracts from an oration he delivered at the University of Melbourne, 25 March 2019, in honour of Jim Carlton AO.

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10 Responses to TERRY MORAN. The next long wave of reform — where will the ideas come from? Part 1

  1. John Doyle says:

    I saw part 2 before I read Part One here.
    When I mentioned MMT there I saw Mariana Mazzucato mentioned here. She is a proponent of MMT so her advice would indeed . be beneficial, because all future plans rely on getting the economics on a real base. But I would still suggest getting Bill Mitchell on board. He has advised many governments over the years with solid results while they stuck to his advice and stayed the course.

    • John Doyle are you and I lone voices in the wilderness or are these people just living in a parallel universe to us? How is it that they can’t see macroeconomic reality and they have no in depth understanding about future, sustainable development? Their obsession with budget balance, budget surpluses and budget deficits, beggars belief. Why can’t they see that we need to BALANCE THE ECONOMY NOT THE BUDGET for long term ecological, economic and social well-being?

      Australia has limited, finite natural resources but if these resources were put to work for the common good, via government expenditure on social and economic infrastructure combined with a job guarantee, we might just be able to survive successfully into the 21st century and leave a decent planet for our children, grandchildren and great grandchildren.

      Wake up Australia!!!

  2. Simon Warriner says:

    In a previous life I used to engage in “root cause failure analysis”. It was uncany how many times it came down to leadership character, although I was tasked to sort out why machines stopped working. My take on this issue is as follows.

    The current malaise is the inevitable result of the inbreeding that party politics engenders. Farmers face exactly the same problem if the keep raising their own sires. The party vision becomes narrowed down and the membership increasingly ideologically focused and unwilling to consider alternative perspectives.

    The solution cannot come from the current political party players, and the author is, regardless of what he might think, a party political creature.

    The solution is for the electorate to search out and elect independent political representation that honestly represents the electorates ambitions, needs, weaknesses and strengths. That independent representation needs to be able to work together like sensible adults to seek out and deliver outcomes that serve the widest possible common good. Only when a critical mass of such independents is installed will sensible, forward looking policy start to be developed and implemented. Until then, we can only pray the idiots are too busy squabbling to do anything really tragic.

    If, as voters, we start a public conversation about this we might find the standard of representation on offer improves almost magically. This will be because decent, talented and conscientious individuals are not likely to offer themselves up to wallow in the sewer that is party politics, even if hell freezes over.

  3. Kien Choong says:

    I would argue that the 3 key challenges for our generation are: (i) addressing climate change (mitigation & adaptation), (ii) ending the refugee crisis, and (iii) fostering sustainable and inclusive growth, not just within nations, but across nations. In all of these, the world has to work together.

    So I would argue the priorities for Australia is to work with Europe, the US, China, etc. to address these key challenges.

    And for Australia specifically, I would add to the list: (iv) promoting public health and education levels among Australia’s indigenous peoples to give them the same freedoms that non-indigenous Australians enjoy to live lives and pursue goals that they have reason to value.

    It’s up to indigenous Australians to decide how they want to live and what goals are important to them, but to do this successfully, they need good health and good education.

  4. Geoff Davies says:

    Yes Evan Hadkins, the Fair Go, children, politics – get the money out, Parliament is systemically corrupt.

    Recall our origins, especially pre-1914, recognise that market fundamentalism was never going to work, recognise we are social *and* competitive, make our goal ‘quality of life’ instead of mindless ‘growth’. Manage markets. Restrain banks as we used to.

    See my Desperately Seeking the Fair Go, BetterNature Books (.net.au).

    • Phil Henry says:

      Thanks Geoff. Reform automatically reminds me of Brendan Behan’s Borstal Boy. That’s a universe away from what needs to be done.

  5. Spot-on Phil. The use of the “reform” word by Keating and co to sanitise the neoliberal rip-offs of the last 30 years was brilliant propaganda. I wrote to newspaper editors at the time urging them to use a less coloured word such as “change” or “alteration.”

    The “reform” word was stolen from the standard English history textbooks used by generations of high school students who studied the 1832 extension of the male franchise by Earl Grey, the abolition of slavery by Wilberforce and Shaftsbury’s reforms of child labour and improvements to public health.

    This curriculum gave generations of students including mine a positive view of the word “reform” in politics. The so-called reforms of our era were regressive and the job now is to gradually repair the damage. Bill Shorten understands the issue and if he forgets, Sally McManus will remind him.

    Terry’s post above sounds a bit too third way. Also a bit complicated.

  6. eva cox says:

    Surprisingly, I agree with much of your analysis but would argue that your perception of solutions is far too limited to deal with a population that has been reduced over the past few decades from optimists, benefitting from the serious changes to social inequities that the judicious mix of social and liberal democracy tensions was producing. The work of sociologists, political scientists and psychologists that dealt more broadly with human society had create waves of change and shifts to more inclusive citizenship and stakes in the communities and public structures that had some stake in the possibility and desirability of working towards utopias. I can clearly remember the ideological and discipline shifts that occurred post the arrival of Thatcher, then Reagan. The market based economic beliefs started undermining the still fragile post war experiments of rights and responsibilities that made up the still new social democracy models that were seen as trustworthy. Over the next decades we became customers, a distrust role and no longer felt like citizens in the Common Weal. repairing this is what is needed and your suggested framework won’t do it!

    Am working on alternatives that include social capital and trust as the missing glue that makes societies more civil and is what is really needed.

  7. Phil Henry says:

    The first task is to find an alternative word to “reform”. Reform automatically implies that something is wrong which, from the previous mixed economy to today, was (arguably) the case.

    However since the microeconomic reform tsunami of the 90s, and the simultaneous elevation of a “strong economy” (however defined) above societal wellbeing, the public has come to understand that every new “reform” means they’re going to get it in the neck while some rent-seeker will get the cream. Hence the belated recognition of the necessity of more fairness to societal wellbeing that will, in time, flow through to the economy also.

    Words like “growth” and “improvement” kind of suggest business development, but maybe something like “transformation” goes some way.

  8. Evan Hadkins says:

    There’s lots that Aussies can unite around.

    The Fair Go. The reaction to the first Abbott-Hockey budget shows that it is still potent.

    Prioritise the wellbeing of children. This has emotional appeal and leads to huge cost savings in policing, health, education and much else.

    What is the problem? The professionalisation of politics. This can be remedied through including citizens in decisions about policy (citizen juries and whatnot).

    It is only the wealthy pollies standing in the way.

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