Addressing Internal Market Barriers and Integration: The Australian Experience Cliff Walsh School of Economics University of Adelaide South Australia Forum of Federations and CD Howe Institute Conference, Toronto, 1 February 2010
Jan 11, 2016
Addressing Internal MarketBarriers and Integration:
The Australian Experience
Cliff WalshSchool of EconomicsUniversity of Adelaide
South Australia
Forum of Federations and CD Howe Institute Conference, Toronto, 1 February 2010
AUSTRALIA
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1. CONSTITUTIONAL CONTEXT
2. WHY COOPERATIVE ECONOMIC REFORMS
3. WHAT REFORMS?
4. HOW ACHIEVED?
LESSONS FOR CANADA?
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CONSTITUTIONALCONTEXT
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• COMMONWEALTH POWERS:FEW EXCLUSIVEMANY MORE CONCURRENT, WITH
FEDERAL PARAMOUNTCY
• STATES HAVE RESIDUAL POWERS COVER MOST ECON ACTIVITY
AND INFRA PROVISION
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• “ECONOMIC UNION” PROVISIONS:
CUSTOMS UNION: EXCLUSIVE COMMONWEALTH POWER (s90) OVER CUSTOMS AND EXCISE DUTIES
COMMON MARKET: s92
“… TRADE, COMMERCE AND INTERCOURSE BETWEEN THE STATES … SHALL BE ABSOLUTELY FREE”
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• s92 ONLY PRECLUDES
“DISCRIMINATORY BURDENS OF A PROTECTIONIST KIND”
• CONSTRAINS REGULATORY DIFFERENCES
BUT DOESN’T NECESSITATE HARMONISATION
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• USE OF MOST CONCURRENT POWERS UNCONTENTIOUS BUT NB
EXTERNAL AFFAIRS POWER: CAN OVERIDE STATE LEGN
CORPORATIONS POWER: CAN EVEN REGULATE MATTERS INTERNAL TO CORPORATIONS
GRANTS (SPENDING) POWER:
REWARD STATE REFORM ACHIEVEMENTS
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• CONSTITUTIONAL CHANGE UNLIKELY
• REFERRALS COOPERATIVE BUT PRACTICAL AND POLITICAL LIMITS
• OTHER MEANS RELIED ON: TEMPLATE LEGISLATION MIRROR LEGISLATION FRAMEWORK LAWS SIMPLY IGAs
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THE WHY, WHAT
AND HOW OF
AUSTRALIA’S COOPERATIVE
ECONOMIC REFORMS
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WHY?
•ECON CRISIS: UNILATERAL TARIFF REDUCTIONSINTENSE PRESSURE FOR DOMESTIC ECON REFORMSSTATES’ PARTICIPATION BECOMES ESSENTIAL
•ECON AND POLITICAL BENEFITS ALL-ROUND
•2+ DECADES & STILL GOING11
WHAT?
•DETERMINED SOLELY BY WHETHER INCREASES COMPETITION ETC
PRESUMPTION IN FAVOUR OF COMPETITION BUT COULD BE REBUTTED
FOCUS CHANGES OVER TIME
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PHASE 1: 1990s
• STARTS MODESTLY EARLY 90s: INFLUENCED BY EU
MUTUAL RECOGNITION AGREEMENT ETC.
• BUT NB ALSO PERFORMANCE MONITORING OF GBEs
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• 1995-2005 COMPREHENSIVE NATIONAL COMPETITION POLICY (NCP). KEY ELEMENTS:
REFORMS TO PREVIOUSLY SHELTERED GBEs: ESPECIALLY ELECTRICITY, GAS, WATER
WIDE-RANGING LEGISLATION REVIEWS : TO REMOVE ANTI-COMPETITIVE LEGISLATION
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• OTHER ELEMENTS INCLUDED:
WIDENED COVERAGE OF TRADE PRACTICES ACT
COMPETITIVE NEUTRALITYSEPARATION OF REGULATORY
FROM COMMERCIAL FUNCTIONSVERTICAL SEPARATIONTHIRD-PARTY ACCESS REGIMES
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• SOME INTERNAL MARKET REFORMS BUT NOT HIGH PRIORITIES: E.G.
MORE UNIFORM APPROACH TO REGULATING TRUCKS
NATIONAL INTEGRATION OF INFRA PROVISION
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PHASE 2: AGREED 2006
•NATIONAL REFORM AGENDA (NRA)
•REGULATORY REFORM STREAM
“TO DELIVER A SEAMLESS NATIONAL ECONOMY”
REDUCE FRAGMENTATIONIMPROVE REGN-MAKING & REVIEW
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• INITIALLY 10 PRIORITY AREAS
PRODUCTIVITY COMMISSION: INCREASE GDP BY 1.33%?
• SOME ISSUES IN CANADA NOT IN AUSTRALIA
• NOW 27: IN SUMMARY:-
GREATER INTEGRATION OF LABOUR MARKETS: PROMOTE MOBILITY & SKILLS ACQUISITION
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REGULATION OF SAFETY & OTHER STANDARDS
CONSUMER INFORMATION AND PROTECTION
STREAMLINE GOVT APPROVAL AND COMMUNICATIONS PROCESSES FOR BUSINESSES
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• BENEFITS > THAN +1.33% GDP
• REFORMS TO REGULATION-MAKING AND REVIEW IMPORTANT
FOR MOST BUSINESSES, EXCESSIVE REGULATIONS
• OTHER NRA REFORMS INCLUDE WORKFORCE PARTICIPATION & PRODUCTIVITY
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HOW? & LESSONS FOR CANADA?
1.VITAL: SEPARATE INTERGOVTL FORUM – COAG
2.ALSO: DRIVEN & MONITORED BY FIRST MINISTERS
3.REFORMS ARTICULATED AS ABOUT COMPETITION PRODUCTIVITY LIVING STANDARDS
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4. BROAD-BASED PACKAGES
MUTUALLY REINFORCING ITEMS
REDUCING INTERNAL BARRIERS ONLY IF HIGH BENEFITS
TAILOR-MADE IGAs FOR EACH PACKAGE & COMPONENT
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5. STATE PREMIERS: SEEN AS NATIONALLY SIGNIFICANT
LITTLE OR NO FINGER-POINTING AT PAST “PAROCHIALISM”
6. SENIOR OFFICIALS GROUP STABILISED PROCESSES WHEN POLITICAL TENSIONS
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7. REFORM PRIORITIES ESPECIALLY INFLUENCED BY
BUSINESS COMMUNITY (BCA)
PRODUCTIVITY COMMISSION
8. WHERE POSSIBLE, SET OUT OBJECTIVES AND GENERAL PRINCIPLES
STATES LEFT TO IMPLEMENT TO SUIT LOCAL PREFERENCES
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9. COMMITMENT OF STATES SUSTAINED BY REWARD PAYMENTS
PROGRESS ASSESSED BY INDEPENDENT AGENCY
RESULTS DISPROPORTIONATE TO REWARD $s AVAILABLE
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10. TRANSPARENCY
COMMUNIQUÉS FOLLOW ALL COAG MEETINGS
BACKGROUND PAPERS RELEASED
ASSESSMENTS OF PROGRESS MADE PUBLIC
PC PUBLIC INQUIRIES
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OUTCOMES ACHIEVED
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• PC REVIEW OF NCP (2005)ESTIMATED +2.5% GDP FROM INFRA
REFORMS ALONE
• ALSO CONTRIBUTED TOPRODUCTIVITY GROWTH SURGE:
OECD GDP PER CAPITA RANK BACK TO 8TH (18TH LATE 1980s!)
TRADE/GDP RATIO TO OVER 45% (20% EARLY 1980s)
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• CURRENT REFORMS PROJECTED TO INCREASE GDP BY
1.33% REGULATORY REFORMS AFTER 10 YRS (ONLY 10 OF 27)
6% INCREASED WORKFORCE PARTICIPATION. 3% INCREASED WORKFORCE PRODUCTIVITY
− BUT N.B. AFTER 25+ YEARS, AND POSSIBLY LARGE IMPLEMENTATION COSTS
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• SHOULDN’T OVERSTATE
RAISED PRODUCTIVITY RELATIVE TO U.S.A.’s
HOWEVER, ONLY TO 76% AND STILL BELOW 1950 LEVEL
• MUCH YET TO BE DONE!
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