Education policy tweaks, continued consolidation of zoning regulations, the removal of construction red tape and lower state taxes are among the proposals of a NSW productivity report endorsed by the state’s treasurer.
But Dominic Perrottet admits a number of the white paper’s 60 recommendations – including a reversal of the ban on small nuclear reactors in NSW – are unlikely to become public policy anytime soon.
Mr Perrottet and productivity commissioner Peter Achterstraat on Monday launched the NSW Productivity Commission’s report, saying living standards in NSW and Australia could regress without reform.
This was particularly so as Australia inches out of the COVID-19 pandemic and the conventional wisdom on the level of full employment shifts.
The federal treasury department now estimates full employment at a jobless rate of 4.5 per cent, but Reserve Bank governor Philip Lowe has previously said that may be lower than four per cent.
The unemployment rate of both NSW and Australia is currently 5.5 per cent.
Mr Perrottet said much of the reform “heavy lifting” performed at the federal level by the Hawke, Keating and Howard governments over the past 35 years had not been replicated by subsequent governments.
He also said state economic settings were ripe for reform, and the tendency to rely on immigration to drive economic growth should be tempered.
Immigration to Australia has all but ceased amid the pandemic.
“The economy gets bigger when you add more people but that doesn’t guarantee people are individually better off,” Mr Perrottet said.
“If you don’t have a political class that has the courage to take on the political challenges of productivity reform, the economists in treasury will say that the only way to hit our targets is to add more and more.”
The white paper’s 60 recommendations if enacted would increase NSW’s gross state product by two per cent by 2041, or more than $19 billion.
This was equivalent in today’s dollars to $2000 per person aged over 15.
Mr Perrottet said returning NSW to its pre-COVID position was not sufficient, but admitted major changes carried political risk to his government.
He said that of the 60 recommendations, he supported Mr Achterstraat’s ideas on teacher quality enhancement and vocational training; the consolidation of zoning regulations and development of higher-density properties around transport hubs; and lower tax burdens for business.
The government has already expressed its willingness to replace stamp duty for home buyers with a land tax, with reforms in the works.
“Our government since coming to office (in 2011) has embarked on a range of challenging reforms,” Mr Perrottet said, listing asset privatisation, council amalgamation and planning reforms as examples.
“Almost every single one of them has been met with a scare campaign.”
But he later admitted the government could only enact reform where it had support and many of the 60 proposals may be dead in the water – such as lifting the ban on small nuclear reactor electricity generation.
“The government will consider all of these recommendations and have a discussion with the public around a way forward,” he told reporters.
“If certain policies don’t get up today, they might get up tomorrow.
“Progress is never made by taking ideas off the table.”
Among Mr Achterstraat’s other proposals included more flexible rules for drone use and the increased take-up of e-bikes and e-scooters.
Lobby group Business NSW said it supported the white paper, labelling it the “blueprint” for a business-led economic recovery in the state.
“Overhauling taxes on business will be vital to improving business productivity, removing unnecessary barriers to hiring and business expansion,” Business NSW chief executive Daniel Hunter said in a statement.