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05 March 2015


Media Release


BIPARTISAN POLICY BANK CAN GIVE US THE LONG VIEW


I FLEW into Papua New Guinea last week for the opening of a First World private hospital and made a facetious comment: I said it was good to be back inside a stable democracy. People laughed but itís no laughing matter. After five prime ministers in eight years, with two more likely before the end of next year, Australia has no right to wag a superior finger.


Thatís not even counting the churn of premiers, increasing one-term governments and a chief minister stabbed in the back at midnight only to promote his assassin to deputy the next morning.


So whatís happening in Australia? Itís simple: weíve taken democracy for granted. Like any relationship taken for granted, itís falling apart. In Australia, weíve become fixated on personality politics, career politics, party politics, entertainment politics and blame politics. Weíre fixated on the game of politics and forgotten the purpose of politics: to protect and secure Australiaís future.


Blaming the other side irritates people. Every time a government blames the other side it divides the country. Hating Labor, Liberal, Nats or Greens is hating fellow Australians. After 27 years of imprisonment, Nelson Mandela realised "no one is born hating another person. People learn to hate, so they can also learn to love. Love comes more naturally to the human heart than its opposite."


John F. Kennedy was another leader who spoke to the core of things. He was a change agent. He made the point: "Things don't just happen. They are made to happen." Itís time to "make things happen" in Australia. We need to start turning the ship of state now.


Australia is a commercially young democracy. We donít carry the historical baggage of civil wars, race riots, religious strife, slavery, starvation or occupation. In short, weíve had it too good.


That wonít last. As with many other Western democracies, lower living standards are on the way. All over the world, the gap between rich and poor is growing. Many private equity players tell me Australia will be in recession by 2018. So we need to convince politicians now to create new structures and institutions to protect our future.


In todayís world, politicians think short term. But unfortun≠ately, you canít run a country thinking short term. That's why to develop and execute long-term economic policy that survives successive changes of government we need to improve structures and create new institutions.


Democracy is like any piece of hardware or software. It needs to be constantly upgraded. Yet our national leaders have failed to continually upgrade Australiaís democratic model. Consequently, Australia is being strangled by our past rather than preparing for its future.


A bunch of bearded dudes with no women cobbled together a Constitution in 1901 by plagiarising the US and British handbooks. They did last-minute deals with the states over rum and late-night brinkmanship. If they were alive today theyíd think we were idiots for not improving on their original stopgap model.


Letís start by creating an Australian Long-Term Policy Bank. Thereís precedent. Politicians were smart enough to create a ≠Reserve Bank and give it increasing independence over time. Politicians knew they couldnít resist the temptation of setting interest rates as a political tool so they handed the job over to a respected institution.


Itís time to hand over more things and create another respected institution. Politicians will hate the idea. Thatís why people power is needed to push it.


The Australian Long-Term Policy Bank could be established by an act of parliament in late 2017 after two years of debate. Parliament should give the LTPB, a bipartisan and independent organisation with its own board and governor, one initial job that neither side of politics could argue against: tax reform.


There have been at least 10 major reviews of tax policy in Australia during the past 50 years. Another is on the way. Hundreds of recommendations are put forward. Few are implemented because theyíre too politically hard for any side of politics.


The LTPB would deliver drafted tax legislation back to the parliament in 2019 to be introduced by the government of the day. The work of the Australian Long-Term Policy Bank would be reviewed in a bipartisan way by parliament every five years, but never in the lead-up to an election. The review focuses on improving the LTPB, not politicising or dismantling it.


As years roll by, the LTPB would find its feet. It would be given more vital long-term economic tasks that couldnít be achieved within the gladiatorial arena of short-term politics.


The establishment of the Australian Long-Term Policy Bank and giving it tax reform as its first task needs to be put on the agenda for the 2016 election.


Neither side can say the status quo is working. But if they donít want an Australian LTPB, then whatís the alternative?


There are many other ways to improve the structure of our federal parliamentary democracy. Itís time we started putting them on the table.


For further information contact Greg Rudd on 0408 687 606 or at [email protected]