The 44th Parliament led by Tony Abbott is faced with substantial challenges which must be overcome to ensure that Australia remains the land of opportunity and wealth which we all take for granted. The Coalition should be bold in the decisions they make, and disregard the political costs of some decisions, as they will be high. Reforms to the industrial relations system, the reform of the welfare system and an overhaul of the taxation system are priorities for Australia.
Tony Abbott has pledged that he wants to run a 'no surprises government', where he upholds his election pledges and offers a return to stable government, which has so lacking in the past 6 years under the Labor Party. The Australian public lost all trust in the Labor administration to provide quality reforms and services, and this is a vital area which needs to be tackled. However, one way to rebuild from the deficit of trust is to be daring, both politically and economically. Using a reform agenda, and successfully communicating the benefits to the Australian people will enable Government to become more efficient and establish more trust.
The Industrial Relations system in Australia is again in need of reform, as the current Fair Work Act legislation has pushed the pendulum to far towards employees and unions. The establishment of a more flexible system of dismissal and a balanced wage system are vital to ensuring that businesses can remain profitable and employees are increasingly productive. The Coalition will be politically scared of making too many changes to the industrial relations system due to the campaigns run by the AWU and the Labor Party in 2007, however this is a necessary reform. The manufacturing sector in Australia is suffering under these rules, and so are small businesses. If Australia wants to have a viable manufacturing sector, then addressing award flexibility is absolutely vital as often small manufacturing or retail businesses cannot afford to pay double time on weekends. Just ask any university student these days, there are huge shortages in casual employment and this is because of the current regulations in place, as firms wish to hire more part time employees as they aren't subject to the same regulations. The Abbott Government must cop the political flak for changes to this system, for without these courageous reforms, Australia risks a stagnating and increasingly unproductive labour market which will contribute to the slow death of manufacturing in Australia.
The Australian Welfare System is in drastic need of reform, as it is naturally the Government's biggest expenditure. One only needs to look at Europe and the United Kingdom to analyse the huge burden that the welfare state placed on the government finances. The current system is quite complicated and this makes it harder to administer, for example, when applying for Youth Allowance, even when you reach the age of independence at 22, requires many hours of preparation and waiting on the phone to Centrelink or waiting in long lines. So simplifying the current system is an important and necessary reform as it allows for welfare to be administered in a cheaper and more efficient manner. Also, with the introduction of the National Disability Insurance Scheme (which is a great reform), the welfare bill to tax payers will continue to rise. It is important then to offset the rises in the NDIS expenditure with cuts to other welfare measures. The expansion of the Work-for-the-Dole is important as it is vital that long-term claimants on unemployment benefits are moved back into the workplace, this could be achieved through the introduction of a cap on the time one is able to claim under unemployment benefits before they are moved onto an education or work-for-the-dole scheme, or the combining of the many different benefits into a more efficient universal credit, like the system introduced into the United Kingdom. Also a reduction in middle class welfare is important to reduce the size of the welfare bill, however I personally do not advocate removing all of these measures as some having been important in moving people into the middle class and continues to create an aspirational lower class. The Abbott Government should focus on returning the welfare system back to its ordinary purpose, as a safety net, rather than the age of entitlement which we are currently experiencing.
Australia has not seen any major taxation changes since the introduction of the Goods and Services Tax, by Howard and Costello. This is an area which the Abbott Government has promised to address with a comprehensive white paper on taxation reform, nearly exactly the same as the Henry Review undertaken by the Rudd Government. Abbott and Hockey should embrace the taxation changes which will be in this review, unlike Rudd and Swan who cherry picked certain parts of the review, including the introduction of the Mining Resource Rent Tax, which was one of the factors of the first downfall of Kevin Rudd. The inclusion of the GST in this taxation review is a good idea, to remove it and disregard any changes to this tax would be folly. Looking at the GST, comparative to the rest of the world, it is quite low. Euro Zone countries must have a rate greater than that of 15%, the United Kingdom has a VAT of 20% and even New Zealand has a higher rate, with 15%. Australia must consider all options for taxation reform if we are to achieve a sustainable budget surplus and ensure financial and economic viability for future generations.
There is no doubt that these changes to industrial relations, the welfare system and the taxation system are challenging, and may come with great political costs to the Abbott Government, however the Coalition must use the political capital it has accumulated to be a daring and reforming government. The Coalition musn't spend all its time worrying about polling and leadership speculation, but deliver 'real change' to government and restore trust in Australian polity.
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