Wednesday, March 05, 2008

Cooperation, sounds like a fantasy

Australia’s Treasury Secretary, Ken Henry, has tipped the bucket on the Howard governments reluctance to get on with essential reforms, including state-federal relations.

He also said policymakers in government had been discussing for years the fact that Australia was at the end of a global disinflationary period and faces serious challenges presented by a "near-full employment" economy.

On state-federal issues Henry said “Only a genuinely co-operative effort between governments would suffice. The change of government had presented an "uncommon opportunity" for state and federal reformers to push ahead with an aggressive reform agenda. Identifying markets for energy, water and land transport as the three most in need of reform.”

Rudd’s government started the ball rolling very quickly, with high level talks starting within days of taking power. How government levels relate and cooperate is key to a number of vital issues in this country, including water. "Water rage" was likely to increase as tensions rose between neighbours over pent-up demand for the scarce resource, according to Henry.

So we might be facing some serious economic stresses, including another rate rise yesterday, but it seems our economic gurus and government might actually be working in sync for a change.

The growing cooperative approach to government sounds like a fantasy, however it is long overdue and is actually occurring. As someone said to me recently, even if Rudd can’t turn the economy around he is delivering something far more important for Australia, and this is just one more example.

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