Alf Rattigan Lecture 2017: Restarting micro economic reform with Fred Hilmer

Rattigan Lecture 2017
  • Published Date: 08 December 2017

Emeritus Professor Fred Hilmer AO highlighted the urgent need for Australia to embrace micro-economic reform in the annual Alf Rattigan Lecture in Canberra on Wednesday.

The former President and Vice-Chancellor of the University of New South Wales and Chairman of the National Competition Policy Inquiry, addressed an influential group of senior public officials, academics and members of the community at the ANU’s Australian Academy of Science’s Shine Theatre with his lecture: Restarting Micro Economic Reform.

The Alf Rattigan Lecture Series, an initiative of the Australia and New Zealand School of Government (ANZSOG) , is held in honour of G.A Rattigan, renowned Chairman of the Tariff Board and Industries Assistance Commission. Eminent journalist and author, Paul Kelly delivered the first lecture which was hosted by Professor Gary Banks AO, then ANZSOG Dean and a previous Chairman of the Productivity Commission.

Read Professor Hilmer’s full lecture here

Professor Hilmer said it was an honour to give the lecture named after the pioneering public servant.

“Rattigan’s ideas and advocacy punched a hole in the then prevailing economic fabric of high tariffs, regulated wages and heavy government involvement in industry,” he said.

“Despite the enormity of the challenge of restarting micro reform in the current environment, I remain an optimist, particularly when I recall Alf Rattigan’s achievements, a powerful example of what one person with a big, good but initially unpopular idea can do.”

Rattigan Lecture Hilmer WEB

Professor Hilmer said restarting micro-economic reform was vital and possible, despite the rise of populist politics.

“The benefit of the strong and steady economic growth that Australia has enjoyed has not been the result of distinctive macro-economic policies,” he said.

“However, there have been no new major micro-economic reforms or advances in past reform areas over the last 10 - 15 years and none appear imminent.”

ANZSOG Dean and CEO Ken Smith introduced the lecture, and said Professor Hilmer made a number of strong arguments in favour of a continuing focus on micro-economic reform.

“Professor Hilmer touched on a variety of factors in his address, including the need for a shift from the broad focus of the reform agenda in the early 90’s, to a much more specific focus on reforms in areas like energy, utilities and infrastructure,” Professor Smith said.

“A major point made by Professor Hilmer was that Macro-economic focus won’t necessarily distinguish our performance as a nation from others pursuing similar reforms, but gains in national competitive advantage can be found through focussed micro-economic reforms.”

Professor Smith also highlighted Professor Hilmer’s points on leadership in the push for reforms, including the need for leadership at all levels to get involved.

“I agree that it’s vitally important to get political leadership from the top levels of government, both state and federal, in this area.

“Ideas and thought leadership are really important, making the advocacy of all of us in positions of authority essential to support ongoing reform essential.”

Professor Hilmer highlighted major points in his landmark speech, including:

It’s time for a restart

The need to restart micro-economic reform is vital. Micro-economic reform has now taken a back seat to macro-economic policies.

The old ways aren’t working

What worked in the 1990’s and early 2000's is unlikely to work in the current political environment. We need to cut through or work around the many obstacles to micro reform.

Focus on improvement coupled with political success

The approach over the next decade should focus on the one or two areas of reform with the greatest potential for improvement, and with the best prospects for political success.

Two areas are suggested:

  • Further competition policy reform, particularly with respect to energy and utilities.
  • Improved processes and decisions on infrastructure investment.

Leadership strategy is key

Leadership from the highest levels of the Executive, the bureaucracy and business, is critical if we are to drive difficult reform to grow our economy and the distribution of benefits

Read Professor Hilmer’s full lecture here