Mark Baker (Braddon, Liberal Party) Share this | Link to this | Hansard source

My question is addressed to the Treasurer. Would the Treasurer outline to the House results from the latest Productivity Commission report on the potential benefits of the national reform agenda? Is he aware of any alternative policies?

Peter Costello (Higgins, Liberal Party, Treasurer) Share this | Link to this | Hansard source

I thank the honourable member for Braddon for his question. I can tell him that the Productivity Commission has done an assessment of the national reform agenda which was agreed between the Commonwealth and the states at COAG in February 2006. The findings of the Productivity Commission are that improvements to competition and regulation could, after a period of around 10 years, increase GDP by 1¾ per cent, or about $17 billion in 2005-06 terms. The reforms that could benefit Australia to that degree on the competition and regulation side include nationally consistent road and rail regulations, including safety and technical standards; the introduction of performance based standards to promote flexibility and innovation for heavy vehicles; and more efficient investment spending on road and rail infrastructure. For electricity, this could arise from structural and organisational changes in the generation sector, enhanced demand-side measures and improved regulatory governance. For gas, this could result from streamlined regulatory arrangements and the establishment of a spot market for gas. Similarly, the Productivity Commission found that reforms on the human capital stream could, after a period of around 25 years, raise output by about nine per cent. The commission has modelled improvements that would come through increased workforce participation and higher work incentives.

This assessment by the Productivity Commission has found tangible, real economic benefits to our country as a whole in terms of increased living standards and increased revenues for government from a reform agenda—a wide-ranging agenda to get regulatory reform in these areas. This, of course, is coming off the back of the last 10 years of the competition agenda, which had been administered under the Competition Principles Agreement, under which the Commonwealth has now distributed billions of dollars to the Labor states, according to their progress in relation to reform. As the person who administered the competition agreement I can say that it was hard work getting those states to the barrier, but the gains are worth it. This finding by the Productivity Commission is that the government’s next agenda over the years to come in competition, regulation and human capital has the capacity to drive the economy forward. That is why the Commonwealth is working on them, and they are the gains to be taken from it.