Australia’s next treasurer emerges from the shadows

Heritage said this: “Australia’s economic freedom score is 82.6, making its economy the 3rd freest in the 2013 Index…Australia’s strong commitment to economic freedom has resulted in a policy framework that encourages impressive economic resilience…Openness to global trade and investment is firmly institutionalized, and the economy has rebounded relatively quickly from the global recession.”

Their assessment of the U.S, in contrast: “The United States, with an economic freedom score of 76, has lost ground again in the 2013 Index…More than three years after the end of recession in June 2009, the U.S. continues to suffer from policy choices that have led to the slowest recovery in 70 years. Businesses remain in a holding pattern, and unemployment is close to eight per cent. Prospects for greater fiscal freedom are uncertain…”

So which government will the Coalition emulate when it next gains power?

Mr Hockey again: “This competitive disadvantage is compounded by a government which has declared war on the business community with new and increased taxes and capricious policy decisions.”

Is this true? Heritage offers this: “The financial system has remained stable, and prudent regulations have allowed banks to withstand the global financial turmoil with little disruption. Public finances are soundly managed, and sovereign debt levels are under control. A transparent and stable business climate makes Australia one of the world’s most reliable and attractive environments for entrepreneurs.”

Mr Hockey continues: “What we do need to do is to ensure that our workers have the skills and knowledge that our industry needs. Education, training and retraining is a key step to unlock labour productivity gains.”

Correct. The Rudd/Gillard program. No?

Mr Hockey: “More broadly, the way to accommodate and indeed thrive with high wage costs is to focus on lifting productivity so that the per unit labour cost is competitive.”

Correct again. Wayne Swan’s program precisely. Australia’s productivity has surged in the last six consecutive quarters to an all-time high of 164.82 points.

Mr Hockey continues: “Business has been damaged by the sheer capriciousness of tax policy. This government has announced 27 new or increased taxes since coming to office in November 2007.”

Maybe. But how many has it abolished and reduced? The key issues are the weight of the tax burden, equitable load-sharing and administration costs.

The evidence suggests all three have improved significantly under Australia’s current administration. According to the OECD, overall taxation has dropped significantly since 2007. For the entire Rudd/Gillard period taxes have been lower than the lowest point during the Mr Howard years.