After reform:the economic policy agenda in the 21st century

That’s the title of the FH Gruen lecture I’ll be presenting at ANU on Tuesday 4 October.

I’ll be talking first about the end of the era of reform that began in the early 1980s, and then about the information economy and a policy agenda for the 21st century.

My starting point, that the era of reform* in Australia is over, is shared by Paul Kelly of the Oz, the most prominent advocate and chronicler of the case for reform. Of course Kelly sees the end of reform as cause for mourning rather than celebration.

Australia is a country chained to the past, stubborn in its nostalgic mindset and entrenched in an egalitarian rigidity that throttles any transition to a more successful economy and society

But it’s Kelly who is engaging in nostalgia here. The reforms of the 1980s were designed to address the problems of a 20th century industrial economy. Some were sensible, others weren’t, but either way they are of little relevance today, and will be even less relevant in the future.

* Kelly takes the term “reform” to be self-explanatory. To spell it out, reform refers to a policy agenda based on the ideas of free trade, privatisation and reductions in the scale and scope of government activity.

41 thoughts on “After reform:the economic policy agenda in the 21st century

  1. @Donald Oats

    As well as improved electricity transmission, we need improved energy storage. Both factors will assist to stablise the grid. In addition we need macro, meso and micro solutions to make generation, transmission and storage more distributed and robust. Starting from the bottom up, imagine neighbourhoods integrated block by block. Each block of houses would have have battery storage (powerwalls) and solar panels house by house and be both interconnected and connected to the main grid. If the main grid goes down, the block grid comes into effect. Smart systems in a community block grid would assess total storage and meter it to houses fairly. Individual houses by default could use up to their share per 24 hours. If some used less and others wanted to use more, the low users could sell power on a little community market webpage or even just configure their system to sell part of their own share. If away on holidays, an email alert lets them they can sell home storage by internet or phone app. since they don’t need it. The possibilities are enormous.

    At the other end of the scale we need more macro energy storage, be that pumped hydro molten salt heat storage or other solutions.

  2. @Ikonoclast
    I agree on the energy storage for later use. We are moving into that territory more and more, but in terms of large scale renewable energy systems providing power to an urban area, for example, the grid hasn’t kept up with the new demands made of it, even though we all knew it was coming. A lot of the so-called gold-plating that occurred in the recent past was directed to a grid with fossil fuel base load power, even though we knew at the time that we would be exiting from fossil fuel base load power in the not too distant future. If we want to avoid the nastier consequences of an otherwise unchecked experiment in climate change.

    Large scale energy storage is a definite, and we should be doing research into making it viable. If storage was aimed at being capable of supporting a country town for a few days, that would be a start, for coupled with town-sized renewable energy generation, a town could essentially live disconnected from the state/national grid, or as near as. Clearly if that were achievable, the economics of maintaining a state/national grid go south very quickly—hence economic reform of the sector is a worthwhile subject of research. I’ll just say that, given how normal jobs can become extinct at the drop of the proverbial hat, the fact that state/national grids are potentially threatened through the inevitable growth of macro-energy-storage systems at town level is not reason enough to be getting in the way of that development path. It’s quite risible how theo-neo-cons through to just conservative will harp on about not trying to pick winners, yet they go out of their way to step in front of progress and to hold out their hands as if they are able to prevent it. Madness.

    Instead of the political class bashing the states that have aimed high on renewable energy generation, they could fund some research into how to adapt to the new form of energy generation. Oops, funding got cut. Even Chris Uhlmann wanted to chuck in a few fists to the exposed belly of renewable energy, even though at this stage the power outage seems most likely to have been caused by catastrophic loss of transmission lines in quick succession. I recall the almost regular power outages that happened when I lived in Maylands, they happened often enough, no apology given; this was when a wind turbine was called a windmill, and lived on a farm, pumping up bore water. This was when virtually all of SA was on so-called base load power. It is churlish of Mr X and others to be shooting down the renewable energy sector without acknowledging that frequent blackouts were a blight on Adelaide and other areas of SA, back before renewable energy had the barest of footholds in SA. Sheesh.

  3. @Donald Oats

    “It’s quite risible how theo-neo-cons through to just conservative will harp on about not trying to pick winners, yet they go out of their way to step in front of progress and to hold out their hands as if they are able to prevent it. Madness.”

    I agree. I’ve been wondering if Turnbull, after his statements on the S.A. power loss was being stupid or opportunist. Then I realised it wasn’t either/or. Turnbull is being stupid AND opportunist. The two go together. Most opportunists don’t think before they act or open their mouths. They just move to grab the nearest opportunity that presents itself; a cheap, crass, inaccurate political (ideological) point in this case.

    Yes, the theo neo cons are Luddites pure and simple. Rightly, they have been criticised for being interested only in production science and not in impact science. I think it goes further than that. They are often only interested in established production science already coalesced or embodied in what are now traditional businesses and production modes. Even new production science (e.g. renewable energy) struggles to make its case to the theo neo cons, who heavily subsidise the old modes.

  4. @Ikonoclast
    Your #26

    Good to see you pick up on the ‘energy storage’ technology, Ikono. And also pleasing to see you catch up with the “Not only … but also …” theme in your #28. Yes, Turnbull has been both stupid and opportunist all the way along – didn’t anybody notice how very stupidly opportunistic he was in the Godwin Grech fiasco ? Sheesh, what has he got to do before people can actually see what he is doing ?

    But what I’m on about today is, if we’re thinking about ‘energy storage’, then why does it appear that nobody is aware of ground-breaking research and development that ANU has been doing for quite a few years. Not the least being their trial ‘ammonia dissociation sealed system’ generating plant. Nice, can be fairly small (especially if the Australian developed Fresnel solar mirrors are used) and hence can supply ‘localised’ power – and ammonia, of course, is a lot less explosive than hydrogen and oxygen – and a lot more easily dissociated.

    Look up this site: and then click on the link under Research Projects titled “Ammonia-based energy storage”.

  5. @John Quiggin
    Your #30

    Not looking for you or anyone to back a particular version of storage, just that I’m annoyed that what looks like a very scalable technology – from fairly small to quite large, I’d reckon – that is also Australian, is just apparently ignored. The thing I really liked about it – compared with, say, molten salt – is that at least in principal the nitrogen and hydrogen can be stored in large quantities indefinitely (and transported to regions of very little sunshine) and can be created almost continuously to provide very steady base power.

    ANU have been doing the ammonia dissociation closed system thing for quite a while now – which may mean it’s a dead loss, or just that ANU doesn’t know how to begin commercialising it. But then, being completely ignored is generally what happens to Australian developed technology, I guess. Like WiFi, the Fresnel mirror and SiroSet – oops no that one worked – Interscan ?

    Pity about CCS though – we might just really need something like that in the not too distant future.

    When you say you’re “at ANU” that’s as a visitor ? I couldn’t – or Google wouldn’t – find any reference to you moving from UQ.

  6. @Nicholas Gruen
    Your #32

    You have many questions indeed in your linked Troppo article, Nicholas. But then, it is a perennial proclivity of humankind to ask many questions which have no satisfactory answers. But here’s a simple one: if all of the questions in your Troppo post were answered, and the answers unilaterally acted upon, would that amount to a centrally planned command and control ‘economy’ ?

    But I liked the Peter Varghese quote you give in comments:
    “And so we have had the two systems, political and bureaucratic, talking past each other and each nursing a quiet disappointment with the other.”
    Now that describes the world I know and live in.

  7. @David Jago
    Your #34

    Sorry, David, but I have no further information than is provided by the ANU site. The ANU has been working on the ammonia dissociation system for quite a while – I first came across a reference to it more than 10 years ago – so maybe it has a problem or two in areas like round trip efficiency. But I’m not engineer enough (in fact not at all) so I’ve never pursued it.

    Hopefulyl Prof Quiggin will.

  8. Economies of Size dictate most of what happens in Agricultural production in most OECD countries. The reason the domestic Australian market is being swamped with tinned tomatoes from Italy is because of CAP subsidies. These subsidies keep small farmers in an industry that is dominated, globally, by large agricultural combines. Such large operations will use any methods to increase their profits and maximise economies of size. Europe uses centrally planned economic principles to protect the agricultural industry in member countries. This leaves market based agricultural industries at a significant disadvantage and largely accounts for the new wave of agricultural export protectionism sweeping the Twenty-First Century global food chain.

  9. Probably won’t say that much in the talk, but I’ll give a quick reply here

    Would you say government systems or NFP systems have been good at the delivery of human services? I haven’t noticed.

    I would say they have been good. In education, which is almost entirely government/NFP we’ve managed to achieve near-universal literacy and to educate a large and growing proportion of young people beyond high school in university and (until the recent disasters, TAFE)

    That’s not to say it couldn’t be better – the task is inherently difficult, success is hard to measure, and so on. But Churchill’s remark about democracy applies here. If there is a better alternative, it certainly doesn’t involve competition between for-profit firms.

  10. Having taught in both the State high school system and various private/catholic systemic school systems over a 34 year period of time, I can assure you that we do not have “near-universal
    literacy” even in a rich State like NSW. They may have it in the ACT, I have only been to two schools there, but country NSW is a basket case for literacy, universal or solar. I taught in Moree, for example, and we the teachers had to have a literacy protest to get Sydney beaucrats to even acknowledge that there was a problem. One mother of a 15 year old boy came up to me and said, crying, that her son had entered the state system illiterate and left is (in Year 10) functionally illiterate. The NSW department of Education has had a decades old reputation for spending the least amount of money, per child, than any other state. Private schools and some systemic schools try to address literacy problems but usually have enormous ESL difficulties to overcome. Even they fail to adequately address the numeracy disaster we face in all schools.
    I have not even touched on the appalling numeracy problems we have in ALL school systems. As a sometimes mathematics teacher, I taught mathematics at North Sydney Girls High School, I can assure you that the failure to get mathematics onto the options list of HSC students has deep roots. Let’s not pat ourselves on the back, no matter what way we choose to fund basic skills teaching in this country. Go brag to that woman in Moree, or the Year 7 girl I had to tutor because her primary school teacher had failed to teach her long division. As for teaching directed numbers, I know who I would like to teach- politicians. Literacy and numeracy education is NOT a political football.

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