Recently I started reading a book titled No Ordinary Disruption which was written by three McKinsey Institute bright sparks Richard Dobbs, James Manyika and Jonathan Woetzel.
It is a compelling read, perhaps summarised in an early line that “the familiar world is no more.”
The speed at which the heart of our nation’s economy beats is vital to the lives of not just 24 million Australians, but also hundreds of millions of people around the world that want to see a strong and productive Australian economy.
From those in Indonesia and the Middle East that rely on our agriculture, to the Japanese and Koreans that rely on our coal; from the Americans that are our biggest foreign investors to the Parents of Indian and Chinese students that send their precious children to our Universities, our prosperity influences many others.
So we must be contemporary and benchmark everything we do against the best in the world in each field of endeavour.
This is easy to say, but difficult to do, because the world is changing faster than at any other time in the history of humanity.
To paraphrase again from No ordinary disruption: Britain took 154 years to double economic output per person… the United States achieved the same feat in 53 years… India has done the same with 100 times more people in just 16 years – China, in only 12 years.
Much of this change has been driven by the emergence of consumer sovereignty.
The empowerment of individuals, wherever they may be located, has created a massive class of new innovators, risk takers, traders and builders. They feel massively empowered by better access to information and money.
They have little regard for tradition and expectations. Consumers do not want to be told what to do or how to behave.
For those of us that believe in liberalism and democracy this is great news.
The word “reform” will be heard often today.
“Reform” is organised change. It is a word that describes structured and well considered change when it is used in the public policy sense. But with new technologies, freer markets, less regulation and global and immediate capital flows, consumers are the great reformers and now Governments need to make a choice.
Either we can continue to empower consumers and allow them to be sovereign, or we can try to regulate and tax the new emerging economy into a newer version of a 1990 Commodore.
This room is full of hugely experienced economic reform advocates. Many of you have been at the cutting edge of economic reform for decades. The big mistake from today would be to shape future reform based on a wistful glance in the rear-view mirror.
In some areas – like technology, financial services and communications – reform will be rapid and we will struggle to get ahead of fast moving consumers.
In other areas like healthcare, aged care, disability care, indigenous affairs and broader social policy, reform will be need to be responsive and compassionate. Ongoing demand for services is predictable.
In defence, national security and biosecurity, reform must be measured and reassuring.
In workplace relations, industry policy, innovation and the environment, external drivers will be the great disruptors. For example, having a debate about deregulating shopping hours is almost redundant given the emergence of 24/7 internet shopping.
The Abbott Government’s reform agendas in competition policy, financial services, trade policy and taxation need to carefully weigh the expectations of the sovereign consumer.
Our productivity agenda must carefully consider the dynamics of an ageing population, private investment in public infrastructure and the need for our education system to be better and more responsive to global trends.
Your collective efforts today must deliver real outcomes that consumers understand and are willing to embrace.
The community is not against change. It just wants to make sure that reform has a purpose. The community embraces change when it can see a better life as a result of the dislocation.
As my great Dad once said to me “Ideas are free, but good ideas are gold nuggets.”
Australia is uniquely placed to take advantage of the future.
We have the skills, the knowledge, the innovation, the infrastructure and the capital to sear the good fortune of prosperity into our nation’s DNA forever.
We are however, to our detriment, our harshest critics.
So let us all be enthusiastic advocates for reform, rather than ignorant critics of change.
* Joe Hockey is the Australian treasurer. This is an edited extract of an address he gave at The National Reform Summit, organised by the The Australian Financial Review and The Australian, in Sydney today.
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