Tony Abbott's fine red line

If Tony Abbott, Joe Hockey and Andrew Robb are to put order into what has become Canberra chaos they will need to go through every single line of government expenditure.

But they will have to do much more than that and think outside of the conventional wisdom square. And if they get it wrong they will be badly mauled in 2015.  

Yesterday I looked at the seven deadly Julia Gillard sins and in conversation readers added more (Seven deadly Gillard sins, April 30).

Today I will look at what should be at the top of Tony Abbott’s agenda.

Within two years of taking office (and a year before the 2015 election) there will be a huge fall in mining investment and employment. Messrs Abbott, Hockey and Robb will need to urgently drive infrastructure and small business to replace mining. Abolition of the crazy carbon tax has been widely reported and is an essential part of the mix.  

To stimulate employment Abbott must quickly revitalize small business – bashing small business was Gillard’s first sin. I suggest 10 small business bashing regulations be abolished each day for 100 days – that’s 1,000 regulations banished.

A fair contracts regime, which extends consumer protection to small business in dealing with corporate giants, should be introduced in the first 100 days along with massive encouragement for independent contracting.

It’s vital that Messrs Abbott, Hockey and Robb do not do a Campbell Newman and simply sack public servants. The Coalition needs to do things differently so that there is a real reduction in the number of people required.   

For example in environment, education and health there is massive duplication with the states. But the cost reductions from eliminating duplication will be even greater if new thinking is introduced.

For example hospital expenditure can be cut 20 to 25 per cent using iPads or similar technology. The service to patients will increase. But massive training will be required.  In education, what about basing Commonwealth money on class sizes of 25 or more?  The evidence is that lower class sizes do not improve education outcomes.

The Commonwealth is simply not going to have the money to fund vast amounts of infrastructure and will have to work with superannuation funds. Most of the large superannuation funds do not understand infrastructure investment but it is exactly what self-managed funds need and self-managed funds have 30 per cent of the superannuation market and half the funds that finance pensions.

Currently infrastructure spending costs are boosted by the cartel style agreements between large builders and big building unions. Victoria, New South Wales and Queensland are abolishing the agreements and Abbott needs to introduce matching legislation. This will slash the cost of infrastructure and promote commercial property investment – again helping to bridge the mining investment collapse.   

He might want to, but Abbott can’t make drastic changes to industrial relations laws in his first term because to get a big majority he will have to promise not to touch the basic acts. And he does not need to take such action to gain the required lift in total productivity, especially if he helps the states end cartel style agreements in commercial building.

Abbott must encourage other states to follow Queensland and take back control of half their workforces via unincorporated businesses (How Newman’s IR revolution will flourish, December 20, 2012).

In addition, by encouraging independent contracting much of the tough union industrial relations rules can be overcome. And the bullying regulation is a magnificent weapon when employees or union reps tell productive colleagues that they must take large amounts of time to do a job.

We are lucky that Malcolm Turnbull has devised a lower cost way of introducing an NBN. The latest budget mess means we cannot afford Stephen Conroy’s NBN plan.  But Australia now has an even bigger task for Turnbull. There is no one in the Australian parliament or the US Congress with Turnbull’s eye for technical detail. Give him a good junior minister to implement his NBN plan and then also give Turnbull the task of looking at the big-ticket defence purchases – particularly the JSF lemon.

The Coalition shadow defence minister David Johnston is like current defence minister Stephen Smith and will not rock any boats.  If we get our aircraft policy wrong Australians will suffer for generations.  We need Malcolm Turnbull for this task. He does not have to be bogged in the defence details. David Johnson can do that.

Finally, the issue that could hit Abbott from left field is the Governor General appointment. Former military people are being considered. Hopefully they are not mentioned in the final DLA Piper Review on military abuse. But if they were adversely mentioned then a Governor General’s appointment would be most inappropriate. Unless Gillard jumps in and makes the appointment before the election Abbott must check the final Piper report, which has not been made public, before appointing a military person.