And, after acknowledging Australia’s productivity slowdown, it must commit to the orthodox pro-market economics that have generated prosperity for Australians since the Hawke and Keating reforms of the 1980s.
The path to the summit has not been promising, and the prime minister is part of the problem.
Unless Mr Albanese can get the 100 summiteers focused in this way, there is little chance they will come out with a plan for action or the collective will to see it through.
And without clarity the event always risks being hijacked, as seen in the ACTU’s attempt this week to use it for an overblown Corbynite agenda of renationalisation, punitive taxation, and controls on monetary policy and prices.
Promising agenda could get sidetracked
The government’s summit announcement is promising. It says that the “goal is to build a bigger, better-trained and more productive workforce; boost incomes and living standards, and create more opportunities for more Australians to get ahead and reach their aspirations”.
But it must retain focus and not allow well-meaning people to pack the agenda with other concerns. The precondition for this summit to make history as its 1983 predecessor did, rather than quickly be forgotten, is for Mr Albanese to lay out a broad direction of travel on the economy and a rational approach on taxation, workplace relations and regulation that will get us there.
The prime minister needs to assert all this because the path to the summit hasn’t been promising, and he’s part of the problem.
The idea for the summit came from Labor’s long-running scare campaign over insecure work, always an overstated issue and now overtaken by the lowest unemployment and highest participation since the 1970s.
Quite apart from Mr Albanese’s opposition to the 1980s reforms at the time, his disengagement from economic debates was confirmed in his ignorance of key statistics at the start of the election campaign.
Productivity growth assumptions
As The Australian Financial Review reports, Treasurer Jim Chalmers has flagged that the summit should endorse an immigration uplift that would be announced in the October budget. He has also signaled that the budget will finally write down the productivity growth assumptions that underpin the most critical forecasts in the budget – how fast the economy can grow, and how quickly we can reduce the burden of a trillion-dollar debt.
Recent budgets have been founded upon productivity returning to its long-run average of 1.5 per cent, but it’s been moving away from that for years. Like Mr Keating’s banana republic interview, it’s a confession that blows away a pretense that we are doing better than we actually are.
Thankfully, Dr. Chalmers is batting away the ACTU’s political manifesto. The union peak body once led by Bob Hawke, Bill Kelty and Simon Crean is fundamentally unserious for the times: it doesn’t get productivity, saying it’s not the issue – defying wisdom that says it’s almost always the issue. Instead, it wants to get straight on with redistribution, reversing the reform direction that began with the 1983 economic summit.
Many of Australia’s recent economic buffers, such as a booming China or central bank easy money, are uncertain or drying up. The focus is firmly back on politicians to lead and manage, as it was in 1983. This summit could be a starting point for Mr Albanese to do that, or a lost opportunity. It’s his call to make, and very soon.