The reforming Treasurer: Wayne Swan

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Speak with economists. Many will acknowledge Wayne Swan’s excellent stewardship of the Australian economy through the Global Financial Crisis. It’s an achievement that recently earned him the title of Euromoney magazine’s Finance Minister of the Year.

Ask those familiar with Wayne Swan’s journey through public life and they say he hasn’t grown out of touch with ordinary families. They can readily recount stories demonstrating his continued commitment to the needs of local communities.

But an economic reformer? It’s a question that draws less instinctive responses.

People aren’t able to reel off a set of reform bullet points like they can to summarise Gough Whitlam’s social reforms, or Bob Hawke and Paul Keating’s economic reforms.

But consider the evidence a little more closely.

Swan has embarked on the first reform of access to the age pension in a century. He has initiated the first great heave in superannuation savings since the system was created two decades ago. He has prescribed a big dose of competition for the banking sector. The significance of these moves cannot be dismissed.

Scaling back middle class welfare by means testing government benefits. Encouraging workforce participation among those facing barriers to work, including sole parents, the disabled, the long-term unemployed and the severely disadvantaged. These are not popular or easy measures.

A big review of the tax system and reforms to match: a mining tax on Australia’s non-renewable resources, reducing company tax, and finally doing something about tax on company cars and the R&D tax concession. Putting a price on carbon to transform Australia into a clean-energy economy, while delivering a household assistance package that is equal parts compensation and personal tax reform.

Stand back after Swan’s four years as Treasurer: he has a substantial claim to the mantle of ‘economic reformer’.

A reputation as economic reformer is not one that appears overnight. Unlike the quick decisions of a macroeconomic crisis, which rapidly become the stuff of legend, the case for an economic reformer is one that emerges over time.

Contrast his claim with that of Peter Costello, who preens himself on a reform record. Costello’s achievements – the GST, bank supervision, and the Future Fund – have been canvassed extensively. But there is a story of his economic malaise too: tariff reform stalled in 1997, an untouched mining tax regime, and from 2002-03, a budget position structurally deteriorating under the weight of government spending.

Of course, Wayne Swan’s reforms are not like the one-off big bang reforms driven by Labor’s reform hero, Paul Keating, whose time as Treasurer included floating the dollar, bringing down the tariff wall, deregulating industries and much more. But Swan’s reforms are significant and they have a long term impact that builds over time.

It will be years before the full impact of Swan’s policies can be measured, but it is time enough to take a closer look at how Australia’s 36th Treasurer is tracking.

 

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