Wed, 10 Feb 2010 - 23:00
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Paul's Blog: Maiden Speech Summary

For twenty five years, Australia pursued a path of economic reform.  It included floating the dollar, opening up the banking sector to foreign competitors and reducing tariffs.

Australia today is vastly better off.  Our economy is much more competitive, flexible and efficient. 

It is no coincidence that we have broken down social barriers at the same time as economic ones.

The role of women in the workplace has grown enormously and Australia is much more ethnically diverse.  

I enter Parliament after nearly fifteen years working on public policy in the communications sector. This experience has reinforced my belief in economic reform – and the consumer benefits which flow when a protected sector is opened up to competition.

It is not so long since Telstra had a monopoly, there was no pay television, no internet, and a tiny number of mobile services.

Today, there are over twenty five million mobile services supplied by three separate networks; we have broadband internet, pay television, wireless data and many other services which did not exist twenty years ago.

There are always voices raised against reform.  Introducing change is not easy. That is why the politicians I admire are the reformers – people like John Howard, Peter Costello, Nick Greiner and Jeff Kennett. 

Under the current government, regrettably, the reform momentum of the last twenty five years has ground to a halt.  There are many reports, inquiries and taskforces – but no action.

Even minor reforms get squibbed – like removing the parallel import restrictions on books.  In fact, we are going backwards.

Labor markets are now more heavily regulated after Labor’s so-called Fair Work Act took effect from 1 January this year.  Already we are seeing evidence of workers suffering as flexibility is lost.

There is a new hostility to markets, to competition and to economic freedom. In his 2009 essay, the Prime Minister called for a new phase of social democracy in which markets would be ‘unambiguously regulated by an activist state.’

I think this is going in precisely the wrong direction.

I do not share this government’s unbridled faith in its own omniscient capabilities. I do not admire its massive, complex, bureaucrat-administered spending programs.

In just two years, the federal government’s outlays have risen from $280 billion to $338 billion – an increase of over one fifth – and debt will peak at over $150 billion.

Consider their $43 billion plan for a fibre to the premises network to ninety per cent of the nation.

Having high speed broadband widely available is socially and economically desirable. But the current plan is ill-judged.

On the cost side, the network design is hugely expensive - when compared to alternatives like fibre to the node or wireless. 

The revenue side is even riskier.  How much will be charged per customer per month for the service?  Is it $40, $100, $200? 

What will be the retail services that drive take-up?  Will it be high speed data?  Will it be pay television or video on demand or something else? 

How many customers will take up the service? And how quickly?

What will the cashflows be in year one?  In year five?  In year twenty?

Remarkably, the government did not know the answers to any of these questions before it committed to this venture.

Twenty years ago, state Labor governments in Victoria and South Australia learned the painful lesson that banking was not as easy a business as it looked – and squandered billions of taxpayers’ dollars as a result. 

This government looks likely to learn the same lesson about building new telecommunications networks.

There are several areas I hope to pursue as a parliamentarian.  I would like to see an aggressive push to choose amongst our leading universities a select few whose scale and brand can be built to a world standard.

A second, closely related priority is the process of commercialising innovation: moving smart ideas from the lab to the marketplace.

That means closer ties between research institutions and industry. It means choosing key areas of research where we can build real scale – and leverage that into a national competitive advantage.

My third area of focus is building a society which makes best use of modern information and communications technology.

A fourth interest is making Government more efficient and productive.

That includes more use of contestability and contracting out in choosing the providers of Government services; and also better use of information technology in delivering government services.

In the private sector there is a huge focus on giving customers a simple one-click approach to completing a transaction. Where is the one-click mentality in Government?

In the way that Government deals with citizens, let us have less compulsion and more persuasion. The recent book by American scholars Sunstein and Thaler, Nudge, is full of examples – in areas as diverse as retirement incomes and healthy eating.

Let us get serious about evidence based policy – using randomised trials to test whether specific programs actually work. And we could use the price signal much more extensively to best allocate scarce resources – be it capacity on roads or water for irrigation.

I hope to be an effective advocate for the people of Bradfield – and a thoughtful champion of long term reform which improves the lives and well being of all Australians.

This is an edited version of the First Speech delivered last week by Paul Fletcher MP, the newly elected Member for Bradfield, in the Federal Parliament.