No. 9

PC TO APPROVE OF

STONE the crows! Who would be Gary Banks (apart from Gary Banks, who does not have much choice)? Running the Productivity Commission is not a path to popularity, what with the way the agency’s job is to recommend ways to make the economy more efficient – which always upsets people who are making a quid the way things are.

Transport Minister Anthony Albanese has asked Mr Banks and his pointy-headed pals to hurry up a report on Sydney Airport. Given the way the Australian Competition and Consumer Commission calls Sydney’s the worst large airport in the country the mob out at Mascot would probably prefer the PC to take its time.

So would just about every organisation at which the Commission casts a quizzical gaze what with the way it insists on asking whether the taxpayer is getting value for money.

But while the PC’s work is not a classic case of how to make friends it is a way to influence people.  I suspect very few people read the Commission’s reports right through, the prose does not sparkle, the jokes are less few than nonexistent and the conclusions generally suggest that the authors are amazed that anything works at all given what a bunch of slackers we all are.

A bunch of sunny optimists the crowd at the Commission is not.

But they provide Australia’s economy with an inestimable service in pointing out ways the taxpayer can benefit by getting more bang for the billions of bucks they pay for government services and state provided subsidies.

This drives people nuts who think economics is optional and that the PC has an ideological agenda, just not the one its initials indicate.

The idea that you can ignore economic evidence that does not suit is as old as rent seeking in Australian politics. Every industry association or welfare lobby who wants an extra big slice off the magic pudding has always argued their special case is more important than economics.

Up until the ‘80s they generally got away with it. But they got a shock when the Hawke-Keating governments largely supported by the opposition under John Howard started to end the rorts. In the 1990s the National Competition Council oversaw the end of state government subsidies and grace and favour monopolies. And the Productivity Commission has always asked curly questions about what people who want the taxpayer to cough up do with the dough.

People who think slicing the magic pudding is a sensible way to run the country have always hated economic reformers. In the ‘90s they warned  “economic rationalists” were controlling Canberra. And now whenever the Productivity Commission suggests that subsidies, tariffs or outright inefficiency in government agencies mean people pay more for a product or a public service than they need those who benefit from the existing arrangement howl like sinners damned, arguing that whatever they do is more important than mere money and that other objectives should prevail.

This is the equivalent of arguing the way to deal with a drought is to ignore the weather and plan as if it was pouring. And you could never accuse the Productivity Commission of being wet when it comes to economics.

'2012