Former prime minister Tony Abbott has attacked Malcolm Turnbull in a media column, accusing his successor of abandoning a program of economic reform that would help Australia respond effectively to shifting global economic conditions and the election of Donald Trump.
“It’s high time for people everywhere to stop lamenting [Trump’s] rise and to start responding to it,” Abbott writes today in a column for The Australian.
“If [Trump] does what he has said he would, and we have to assume he’ll try, economic policy here in Australia will need to respond fast. It will be a good opportunity for the government not just to talk about agility but actually to be agile.”
Abbott argues that the global trend towards protectionist policy means Australia needs rapid responses, and uses the column to sketch out a scenario under a Trump administration in which “trade barriers go up and trade volumes come down, [and the] the world is plunged into a deep recession.”
This comes at the end of a brutal week for Turnbull, in which he has lost one of his most senior ministers to a travel expenses debacle.
Good times make economic reform easier, bad times make it imperative. Whether Trump turns out to be good or bad for the world, our economic reform challenge is becoming more acute. If Trump’s tax cuts work, we will need to cut tax to stay competitive; if his tax cuts fail, we will need to reform fast or suffer a swift loss of confidence in a highly exposed economy.
As always, our challenge is to maximise economic growth. That means getting taxes down and regulation down so that we can get productivity and profitability up. But getting taxes down responsibly means a ferocious clamp on all new spending other than that with a clear growth (or necessary national security) dividend. It’s a pity that Malcolm Turnbull abandoned the tax reform and federation reform white papers that had been well under way under my government. This process was the best hope of securing a shift from taxing production to taxing consumption and for making government more efficient.
Abbott’s full column is at The Australian.
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