Congratulations on becoming Australia’s 38th Treasurer. You’re following in the footsteps of giants, including Ben Chifley, Harold Holt, Paul Keating and John Howard.
All of these men went on to become prime mnister. Perhaps you could too.
For now, it’s time to focus on the job at hand: overseeing Australia's $1.5 trillion economy. It won’t be easy. Australia’s mining boom is ending and our economy is slowing. The budget is deep in the red and under pressure from the population’s ageing.
There has been a complete breakdown of trust in the public policy-making process from business and taxpayers. And not without good reason. The Rudd/Gillard/Swan era was marked by a confidence-destroying, ad-hoc approach to policy making and an inability to communicate clear messages.
You job is to turn all this around. To get you started, here are my top ten tips for being Australia's Treasurer. You're welcome.
1. Put stability first. You’re about to hear a lot of squawking about the need for urgent reform of the budget. You've made some of these noises yourself. The reality is less exciting. The budget is not in a state of emergency. It is in need, however, of long-term structural repairs. It is your job to stop the constant budget tinkering and restore credible, stable and trustworthy policy making.
2. Make budgets boring again. Budgets are like Christmas – they’re only supposed to happen once a year. We don’t need to have another budget until May next year, which is the ordinary order of things.
Treasury will release a mid-year update this November, which should give you a pretty good picture of the budget. Your job is not to fix the budget in one hit, but to come up with a credible path back to surplus.
3. Take your time. Wisely, you have committed to twin reviews of both sides of the budget, including an audit of government spending and a review of government taxation. Don't rush them. This is our chance to get it right and to put the budget on a more sustainable footing. Make sure you include ALL taxes in your tax review, including the GST. Of course, all reforms create winners and losers.
4. Be honest with us. The Australian public are not dumb. Yes, we are tired of constant changes to the system. But you need to start a fresh conversation with us about what services people can rightly expect from government and what taxes we are prepared to pay to fund them. We're not mugs. We get that the budget doesn't add up. We know this means lower spending or higher taxes. But any tax reforms, such as increasing the GST, should ensure low income earners are not left behind.
5. Consult more with business. Hell hath no fury like a business lobby group scorned. If you fail to consult properly with business – like the Rudd government on the mining tax and fringe benefits tax changes – the end result is a business backlash and poorly designed taxes. This doesn’t mean you need to do everything business suggests, particularly on industrial relations. But you do need them inside the tent pissing out, rather than outside the tent pissing in, which is where Rudd kept them.
6. Ignore the Opposition. You are the government now. Wayne Swan and his staff never seemed to quite grasp this fact. They spent time and energy putting out press releases trying to discredit Opposition claims. This is a waste of time and government resources for purely political purposes. Forget them. Focus on your agenda instead.
7. Care less about what the media thinks. Rudd and co were also so focused on winning the daily media battle that they lost the war. Learn from that. Hold fewer press conferences. You don't need to have a presser for every minor statistic and Reserve Bank board meeting. Stop pretending independent Reserve Bank decisions reflect somehow on you. Speak less at press conferences, but say more. The media will try to trip you up with questions about the gross operating surplus and the price of bread. Don’t play the game.
8. Drop the obsession with debt. If you invest in assets that grow in value, debt is okay. Investing in building infrastructure will return dividends for generations to come.
9. Learn to say no to Tony. He’s a man accustomed to saying no, but less used to hearing it. But that’s your job. Peter Costello said no to John Howard and Paul Keating said no to Bob Hawke. Every good prime minister needs a good Treasurer to tell him or her “no”. He'll thank you for it one day.
10. Paint pictures. Being Treasurer is not about being a glorified accountant. You've got guys in Treasury who can add up for you. Your strength lies in your big picture vision. Paul Keating was an excellent Treasurer because he was an excellent communicator. He thought in pictures, rather than numbers. Australians are in need of a convincing narrative about how we will continue to grow our standard of living after the end of the biggest mining boom since the gold rush days.
Your time starts now.
Jessica Irvine is News Corp Australia's economics editor. View more articles at www.jessicairvine.com.au