We can’t govern by focus group

I got to thinking about all this after a brief appearance this week on Sky News to talk tax reform.
Right now, the Australian economy is attempting to emerge from its deepest, darkest crisis in a century. There is already lots of talk about stimulus and ongoing government support for households, businesses and ailing industries.

But all of this support must have a purpose beyond a press release with dollar signs in the headline. That point must be to get households and businesses standing on their own two feet again, striding confidently along the path to self-sufficiency and prosperity. Stimulus has a role to play, but to ensure it is effective, our recovery must have another component: reform.

There isn’t much use giving the economy a boost if the households and businesses we are trying to propel into action are being held back by inefficient taxes and too much red tape. We have to eliminate as much friction as possible if we are to make any serious headway.

That’s why tax reform is the conversation we have to have. And in a federal system, with a massive mismatch between where people pay their taxes (mostly to the Commonwealth) and where they need those taxes to be spent (mostly state services and infrastructure), tax reform only makes sense if we tackle it as a nation, not separately at the state and federal levels.

Piecemeal changes to one tax or another won’t cut it. We need to look at ways to lower the overall burden, and that may mean expanding some taxes so we can eliminate others, or swapping inefficient taxes for more efficient ones.

The point is to streamline our economy so tax causes as little drag as possible when we hit the accelerator on recovery, but also to realise the long-term benefits of a fairer more efficient tax system.

Of course, this requires a serious conversation about adjusting the GST in order to remove other taxes, something the federal government isn’t game to broach, even now, when the case for change is strongest. Perhaps that’s because, for the pollsters, this kind of policy thinking sets off focus-group alarm bells.

My interview on Sky was immediately followed by a segment featuring two well-known political strategists – Grahame Morris and Bruce Hawker – who, giving their best impression of Statler and Waldorf from The Muppets, immediately began to hype the political and electoral perils of tax reform.

Missing from their discussion was any consideration of whether it might be good policy. This attitude is sadly all too familiar in federal politics over the past decade, a period in which pollsters and lobbyists have reigned supreme, and ultimately held the nation back. It is a period in stark contrast with the two preceding decades, when serious, beneficial reforms were steered through treacherous political waters by the likes of Keating, Howard and Costello.

The reforms they achieved were electorally fraught, but they pursued them because they were the right policies for the nation at the time. These reforms have passed the ultimate test of politics, which is not the poll on the front page of the paper, but the judgment of history decades down the track.

It is strange to think that one of the people most synonymous with conservatism in Australia is John Howard, and yet he and Peter Costello orchestrated one of the most radical policy changes in the nation’s history: the goods and services tax. But while their commitment to true conservative values meant building on the past to create a better future, it seems to me that the worst conservative political instinct – the stubborn attachment to the status quo even when change is necessary and right – is most often observed in the poll-addicted pollie or pundit, regardless of political allegiance.

At times like these, however, politicians of all stripes would do well to remember that while polling can set up a party for electoral success, good public policy can set up a generation for success.

From the depths of economic crisis, that must be our ambition. We don’t need faster horses. We need roaring engines. We don’t need focus groups. We need new ideas and new thinking. And that comes from leaders, not pollsters.

Dominic Perrottet is the NSW Treasurer.