Putting productivity on the Reform Roundtable

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Australia's productivity chief Danny L.

Wood says growth has not been a priority in policy for far too long.

It's one of the final bids being made to the Labor government for what should be on the top of the agenda for this economic roundtable.

It's happening over the next three days.

It's going to be big, or is it?

And after a string of stories of children being abused in childcare centres around the country how long is too long for us to expect concrete changes that will make childcare safer welcome to politics now

hi i'm patricia carvelis and i'm jacob krieber jacob it's economic roundtable week yes the economic gods are shining upon us we are here to tell you what you should and shouldn't care about.

This morning, the Productivity Commission Chair Danielle Woods said she will call for ministers to embody a growth mindset.

Now, if you interact at all with the education system, you'll be hiding under a doona right now because basically the entire education system is full of telling young people to embrace a growth mindset.

What does she mean by it, though?

Is she going to use the language of we're on a journey, Patricia?

I think we are.

We're on a journey.

We are on a very interesting journey.

Is it a journey that will lead to big, bold reform, or are we getting the lowest of the hanging fruits?

Look, I'm sure we'll get to that, but I guess that growth mindset thing is really

the first sort of few weeks after this thing was announced and the government said, look, bring out your ideas, bring them all out.

We want to hear them all.

We're not going to judge any of them.

There tended to be a rush for things that would raise revenue and then you could spend money.

on whatever your favorite thing was and that would be a great thing and you'd be applauded for it.

And I think what the Productivity Commission chair, Daniel Wood, is trying to do here, Patricia, is say, Look, that's nice.

We all want nice things,

but actually, I'm a boring economist, and I'm going to tell you that actually to get those nice things, you've got to grow the economy.

So, that's what she's saying.

In that growth, horrible, horrible, I agree with you, horrible phrase, growth mindset.

But that's, I think, what she's saying.

So, the coalition is in a very fascinating kind of political play here.

Poor Poor Andrew Bragg, he is the shadow productivity and housing spokesperson.

He's going bananas, this guy, because he thinks they are the red tape cutting political party.

And how dare Labor be claiming that they want to cut red tape?

Just a memo to both of them.

None of this is sexy for normal people, but it does need to happen.

Does he have a point that they were the party of cutting red tape and now Labor's come late to the party on this because they read Ezra Klein's book.

The government would strongly contest that claim of Andrew Baggs.

And in fact, I think they already have this morning with the Treasurer out saying, you know, the nerve of these guys to suddenly discover this stuff when regulations really did grow under their watch as much as they've grown recently under Labor's watch.

Regulations are going to regulate and grow.

Like, it's just one of those things.

In a modern, sophisticated, advanced society like ours,

you do layer layer on additional requirements.

And I don't know, like, so it's interesting, you started the show talking about how we've got this problem in the childcare sector.

Terrible, terrible things are happening in the childcare sector.

And one of the responses is to regulate them more heavily.

And this is tricky.

That is a cost.

That will go somewhere.

Someone will have to pay for that.

But we're doing it for a good reason, which is to look after children, to keep them safe.

But it's when regulations get introduced that don't fix that underlying problem.

They just sit there gumming everything up, costing everyone more money, but they haven't actually fixed whatever the thing was that we're worried about.

And I think in that childcare space, there's a bit of this happening.

I do think when it comes to the vulnerable, when you're actually dealing with human beings who are without a voice, regulation is a no-brainer.

When you're talking about building houses and you've got the same environmental protection at three layers or whatever, like I'm making that up, but but I'm saying, you know, something cumbersome I'm inventing for the point I'm trying to make, then that's a different story.

So I think it's about which lane you're regulating in.

Little children, absolutely.

And that's a regulation about figuring out what humans have interactions with them.

Regulations of checks, like that's a different form of regulation, I think.

And I think the community thinks that too.

So, okay, let's go back to the roundtable.

Three days of this.

In the cabinet room itself.

So they, I don't know if they get special iced vovos or something, you know, the one, the sort of special Commonwealth ones that come on the little parliamentary plates.

They're not allowed to take their phones in there, Pico.

I don't know how you'd cope with a whole day without your phone.

Well, I do it once a year for one day, which is budget lockup.

And I'll tell you how I cope.

Not well.

Yeah.

So these are professional gossips, most of them.

And they've been locked in.

Look, these are talkers.

These are talkers.

They are storytellers.

They are.

And we've got a whole collection of 20 odd people.

Yep.

Some of them are exactly selling a bill of goods.

Others are saying they are for the national interest.

Others are protecting whatever groups they represent.

So it'll be interesting.

So the format, Patricia, is it's not, I don't know, it's strictly Chatham House rules where you're not allowed to

talk about what happened inside.

You can come out and talk about it.

all you like,

but we, you and me, will not be listening listening in in real time.

So it's an interesting dynamic.

Each one of these summits has its own unique

sort of driving force, presentational effects.

If you go back to the 2022 one, that was all very public.

Everyone's speeches were recorded.

People would listen in, judge them, comment on them.

This is slightly different.

It's going to be a different format.

It'll only ever really come out maybe sort of at lunchtime or during the breaks or in the evening what was discussed.

And maybe others will put out their talking points beforehand to the media.

So I'm not quite sure how that changes the dynamic and effectiveness of it.

What do you think?

Not sure.

Jury's out on that.

I understand why they don't want them to have their phones.

It's, you know, I think it's generally

the same way.

You don't let people bring them into classrooms.

It's a distraction.

You want people to be really focused as well.

And I like the idea, but the idea also that somehow this is a private meeting is laughable.

The people who are invited all have agendas and things they're publicly advocating for.

And I don't think that's going to preclude them from sharing.

So it'll be interesting to see what rules they try and put about it.

But I mean, I think what is happening here is the government is trying to play down expectations.

And if you look at what the treasurer has been saying, I mean, he's been basically declaring it a win before it even starts, right?

Because we're having a conversation.

Yeah.

So I do love the sort of modern world that we have to congratulate ourselves for talking now.

Like, fantastic.

We are having a conversation.

Good.

It's like every kid gets a prize.

It's a low bar, but hey, let's go with it.

It's the low bar perhaps we had to have.

They need to come up with some serious stuff.

And I am going to put it out there, Jacob.

I'm not afraid to say it.

Drum roll.

Drum roll.

I think if they just walk out saying we're going to cut red tape.

Hold that front page.

Yeah.

Yeah.

I can already see the spot down on the lake down on lake burley griffin where they will build a statue to commemorate that moment the day that they announced that they would be taking on regulation that day

to be commemorated forevermore one of the applications that you have to make in the bureaucratic hellhole of trying to you know make look it'd be great if they cut down some of the sillier regulations that duplicate but they're going to have to do more than that so what are the other areas we've got?

We've got maybe something on artificial intelligence.

I think there's been a lot of talk in the lead-up to that.

So, could that be some facilitation, just putting it out there, because okay, it's not, they're not going to walk out saying we're going to regulate it more.

That's not going to be it, because that's the opposite direction that they've been in pressure.

What we would be looking for is a statement from this collective of smart people in the room.

What is the best approach here?

Not everyone's going to agree on it, but should we be heavy-handed in the regulations?

Should we be light touch?

Should workers have a veto power over how business deploys AI?

And

what about the intellectual property that AI is sucking up and using?

Do we have a view on that?

Do we care about that?

I think if it can come out with something strong on those questions, it would be pretty important, I would have thought.

The more interesting stuff, I don't know if that's where you're going, is what ideas appear that the government then takes away and sort of beavers away on for a few more years and then and then presents as a big bang sort of policy shift that they can take.

Maybe they can announce it and say, we're going to bring in a new tax or we're going to do this or we're going to do that, but it takes effect after the next election.

Yeah, and that's exactly how the Prime Minister explained it, that some things will be for the next term.

And that really sets up a battle, doesn't it, with the opposition potentially?

And they may spend, it depends what it ends up being, but a whole whole lot of time fighting something

that doesn't end well for them that gives them I always call it the sugar hit originally but you know anyway watch that space because

that will be a tricky one too any tax that you do also involves a big pushback so just because they're having the economic roundtable doesn't mean they won't have the backlash to it all.

That's just, it doesn't stop the backlash, does it, Jacob?

It doesn't kind of mute anyone.

These people aren't easy to mute, apart from taking their phones.

But the government can't take, let's just scenario here.

They can't take their phones for a year, can they?

I mean, they need, it's only a day they can do it for, I think.

Maybe that's the great outcome that we're looking for.

Imagine.

No funding for a year.

Take the phone from the ACT Action Business Council of Australia.

There was actually a better suggestion.

Last week I spoke to Andrew Fraser.

So he was a treasurer in the Queensland government.

He is now runs a, he's a chairman of a big super fund.

And

he's one of Jim Chalmers' longer term mates.

So he comes from Queensland.

He had a great suggestion, I thought, last week.

He told me there should be a rule that if a policy or an idea has taken six months to be developed, people can't comment on it for the first six days.

It's an absurd rule.

No one would ever do it.

It's absurd, but excellent.

How about that?

You're just going to pause for six days and think it through before you shoot your your mouth off.

A blackout.

You have to get across the details.

You have to properly think about it.

No knee-jerk reactions.

And he was particularly annoyed at the speed at which people knocked off an idea the Productivity Commission came up with in the last few weeks, which is to consider, and we've talked about it before on this pod, you know, to consider a cash flow tax.

It would be a world first.

Some people say it's a sort of super profits tax when you don't have a super profits tax.

But why don't we have a sensible debate about it?

Because the quid pro quo on it is a very large, very fast

investment deduction, which is actually something to encourage people in business to spend more on new things, take risks.

And in exchange, they get a lower corporate tax rate.

Now, that...

the business community shot that down that morning.

So it had...

Most Australians wouldn't have even heard of this idea.

Not even individually, Jacob.

It would have already been shot down.

They got together.

Yeah, all together.

In record time.

Yeah.

Anyway, six-day rule.

I like the six-day rule.

Never going to happen.

So, you know, in some ways, we should set up the committee of things that will never happen.

Yeah.

And by the way, we would be part of that rule.

So that makes it very tricky for us because we are in the news business, my friend.

We work on daily programs.

So good luck to us.

Anyway, you mentioned childcare.

I just want to go to that briefly because Friday was actually a big day in the childcare reform

Attorney Generals all meeting from the morning to the evening.

I wrote a piece on the ABC site that I really urge you to read.

Like we had Michelle Rowland, the Attorney General, talking about it taking 12 months to get these national working with children sort of frameworks together, make it more robust, share information,

not set and forget.

And

by the afternoon, it was going to happen by the end of the year.

That's how much I think they read the room, which is what?

We all were like, including the the opposition, it's going to take you 12 months to reform a system which is in massive crisis and parents have lost faith in.

That's just insane.

Okay, so it's going to happen more quickly.

But I spoke to the Children's Commissioner and Holland's an afternoon briefing and she said, okay, that's in the right direction.

So she was being quite positive, but the actual test itself has to change.

And then Julian Lisa, the shadow attorney general, suggested to me, you know, maybe a fit and proper person test, not just we're going to quickly look through the police to see if you have a current criminal conviction.

I mean,

that can't be the only criteria, can it, for working with our most precious thing, which is our children.

So watch that space because on Friday, it's the Education Ministers all meeting, and their meeting is about a national register and various other issues of childcare workers.

My big thing at the moment is I think we are trying to expand and work on a system that might be fundamentally troubled.

When you say fundamentally troubled, do you mean in terms of we're trying to expand childcare very, very fast?

We're trying to make it more accessible for people because

it's one of, there are two beneficiaries of a childcare system that works well.

One of them is the parents.

It enables them to get back to work earlier than they otherwise would.

Good for productivity.

We talked about that at the beginning.

So there's that.

And it's also actually quite good, say the advocates are very good for children.

And one of the problems that people are talking about is a lot of our kids are starting school without all the basics that you develop in those first five years, sort of some of the basic cognitive skills, some of the basic learning skills.

And in the countries that have much more universal early child care, their kids are hitting school age with more of those skills and then they're doing better in the long run.

And that is actually then a productivity gain for the whole country above and beyond the individual stories that we're talking about.

There's going to be a really interesting debate in my view in the next little while about that particular point.

But it goes to what you're talking about.

We've got this system

that has these problems because, and we're going to try and expand this system very quickly.

That's what the Prime Minister wants to do.

He's made it clear.

Well, how are we going to do that?

Let me interrupt, because if you listen to what they're saying, Chalmers and also Katie Gallagher on Friday, I don't think it was Friday, actually Thursday to me, they are

now

saying, okay,

we want to expand, but we will only do it when we're ready.

So they are dampening expectations a little bit because they are aware of the problems.

And a senior minister said to me off the record, look, if we're building a system, we'd never build this one.

Specifically being what, that it's a system driven by private sector providers.

Yep, that's one of the problems in terms of the way that the system works.

With kind of the subsidy sort of model which follows parents is part of the issue, right?

It's almost like a voucher system, isn't it?

Essentially, Jacob.

And so, you know, the idea is, oh, you can go and choose, but how are parents making that choice if there is not sort of a more uniform system?

And then the other problem is this idea that it would cost you just a set fee no matter where you are in the country.

I don't know, it's $10 or whatever it is per day,

and the government takes care of the rest of the cost.

That is very complicated.

It's very pricey.

The whole thing is very pricey.

Well, notwithstanding, yeah, it's very pricey.

And it also means you're paying quite a bit more into areas where rents are high, where incomes are higher, where cost of living is higher.

So it's a real tricky piece of work and governments have to make that decision.

But we are spending billions as it is.

So their argument of, you know, we wouldn't have this system if we had a choice.

Well, if you're spending billions on a system that you don't think is good enough, tinkering isn't going to do it either.

So the Greens are calling for a big Senate inquiry into the system itself.

That's not just its safety per se, it's

systemic issues of how the funding works.

Just watch that space.

I think that this is a slow burn.

If you're going to have universal childcare, you don't just have a universal childcare model that's built on a model that you've decided, and I know they have, isn't a very good system.

You have to...

or you're a bit crazy, like

building a bigger system.

A foundation you've said you don't like.

Yeah, a foundation that you think is deeply troubled, then

you can try and fix it at the edges.

i understand i just want to make it very clear that torching the whole thing and starting again

it's i i understand how hard that is but

um you know we we write the rules don't we to you democracy yeah yeah you're the you're the torcher as the great torch lighter as well as noticer as i heard last week uh yeah i'm chief noticer chief noticer a minister actually wrote to me saying hello noticer and i thought oh see they're noticing my noticing That is so postmodern.

Okay, just a couple of things I want to mention.

Qantas has been ordered to pay $90 million

for illegally sacking more than 1,800 workers.

That is the largest penalty under work-based laws in Australian corporate history.

So this is the Transport Workers Union who've...

even questioned Justice Lee in his judgment whether Qantas is very sorry.

So that's happened.

That is significant.

And just another issue which is one to watch.

And it's a huge international one, but one to watch, and we will be reflecting on it this week.

It won't just be economic roundtable

all day, every day.

That's the big thing I'm going to say.

How could you say that?

That's almost traitorous.

I know people come here for more than their meat and potatoes, my friends.

They want the big things.

And we know that U.S.

President Donald Trump is now saying, after he had that fizzer of a meeting with Putin, the most fizzer embarrassing meeting I've seen on the world stage, that the Ukrainian President Vladimir Zelensky could end this war with Russia almost immediately.

He is about to meet with a whole bunch of European leaders who are going to accompany Zelensky.

It's quite extraordinary, isn't it?

Like you've got

Kiostama, you've got Macron.

It's amazing.

They're all, I'm told, from reporting, they're all going to go to Washington with Zelensky.

The White House has extended the invitation to them to be fair.

So

they're all going to go into the White House, into the Oval Office again, remembering that February meeting where he was sort of assailed for not wearing a a suit and sort of you know

ganged up on by the president and the vice president so now now now there's a whole gang to back Zelensky in this in this negotiation fascinating stuff and and there's been a meeting just in the last few hours with a whole host of world leaders including Anthony Albanese

on this call where they're talking about how they get there.

I think it's really significant this.

So we will be delving into it on politics now because Australia was on that call for the coalition of the willing.

We are going to be part of that.

The Prime Minister was asked in an interview we just did on Sky.

He hasn't committed troops or anything yet, but we are there.

We are backing Ukraine.

We're not moving from that position.

We've got Europe really putting

their effort, their emphasis on fronting Trump and not letting Zelensky be humiliated, denigrated as he was in the Oval Office.

Well, the Europeans don't want a Russia that can do whatever it likes.

And they want to get this message across to Trump.

How Trump responds, the language he's using so far.

Well, you can never work it out with him, but I don't see it as overly promising.

Anyway, let's watch that space.

But I want you to know

an awful lot of people.

It's huge.

It's huge.

And really incredibly significant for our region, too, with China, its designs on Taiwan, the precedent this potentially sets.

Don't worry, guys, I've got you.

Jacob, you've got lots to do.

You have to go and steal people's phones before they.

The phone thing makes me laugh.

Anyway, that's it for politics now.

I'm back tomorrow with Raph Epstein.

We're going to talk about all those things, including those big international stories.

The party room at abc.net.au is how you send questions.

I'll be with Mel Clark for the next month before I then go off, and then our secret co-host will be revealed.

See you, Jacob.

Take care.

See ya.