News ‘Now PM must lead’: John Hewson’s economic vision post-coronavirus

‘Now PM must lead’: John Hewson’s economic vision post-coronavirus

Time to lead for the future: Prime Minister Scott Morrison has been urged to plan for a new economic structure. Photo: AAP
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Former Liberal leader John Hewson says Prime Minister Scott Morrison  has a chance to reset his leadership and establish a post-coronavirus commission to provide a new economic vision for Australia.

Dr Hewson believes infrastructure, clean industries and new technology should be a priority, while a revamped tax system should ensure big companies are assessed on revenue not profits – ensuring they pay their fair share.

The man who led the Liberals from 1990 to 1994, losing an election while advocating a GST, says Australia has been stunted by ideological battles for “two or three decades” and believes “somebody in the government has got to stand up and lead”.

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Infrastructure and new technology jobs: John Hewson would like to see a new plan.

Having urged greater action post-COVID-19 on climate change as part of his role as honorary professor at the ANU’s Crawford School of Public Policy, Dr Hewson says the government had been “caught short” on drought, bushfires – and now the pandemic.

He says the PM needs to proactively seek a new way forward that promotes new infrastructure, regional relationships, proper governance and the industries of the future.

“Now, Morrison could do this on the basis that, ‘well, look … in terms of the pandemic, we got caught short and I’m not going to get caught short anymore’, and they can try and bury his past on bushfires and droughts and so on,” Dr Hewson said.

So we have a proactive strategy, taking a longer-term strategic view of Australia.’’

With the pandemic showing the opportunities for working from home, finishing off the NBN could be a priority, along with investing in roads,  rail, clean energy and major water projects.

“It’s probably not too late to say what do we need to do to build it [the NBN] up to what it should be? Many people are going to do so much more on the basis of technology, and you’re going to see that in the business community.

“[Ensuring] Internet infrastructure capability is really there and can do what you want it to do … these are obvious things that you can go around and look at a lot of the infrastructure, which is in poor shape.

New path? A big future in renewable energy, such as wind and solar.

“And you’d have to say some of our aged care and many of our hospitals, a lot of our schools … roads and rail and all those other traditional infrastructure projects. Water is a big one. There are big projects around now to bring water down from the north.”

Asked if a post-virus summit with community leaders could help set this agenda, Dr Hewson favoured an independent commission that could be “properly funded and generally independent”.

He said such a body would be “able to tap the best opinion around here or overseas to marshal a strategy for this country moving forward over the next several decades”.

“With interest rates at near-zero levels and long-term bond rates … we could borrow 30 to 50 years money on a government guarantee, for which we wouldn’t pay more than 2 per cent.

“I reckon we’d raise hundreds of billions of dollars.”

That money could then be distributed from an independent infrastructure fund and provide cash for public-private consortiums to innovate.

But he warned that billionaires and big companies would also have to start paying their way, with inequitable personal tax rates too high at lower levels.

This is an opportunity [to say] we can’t go on with profit-based corporate taxes … they move the profit offshore so that they don’t pay much tax.

“They expect a tradition of paying very low levels of tax, maybe 10 per cent, and they manage to avoid it all.

“And we do deals with those who develop the LNG business, for example, who would not have to pay tax or anything for 20 years.

“These are major weaknesses in the system, which has to be addressed –  scrap corporate profits as a basis of corporate taxes. Just make it a flat percentage of revenue or something like that.

“The cash flow taxes, which is what the Henry [Report] proposed, change the nature. They can’t really fudge that.

“Those big players like Apple and Google can come into Australia and make billions of dollars in terms of revenue and pay no tax. That offends everybody beyond belief and the inequity of that is staggering.

“I would think in the current climate, [we’ve] just got to say we’re going to go to all the tax concessions and we’re going to take out the ones that are really inequitable [and] cannot be justified.

“Our personal tax rates are a lot higher than they need to be and they come in at lower levels of income. So there’s all elements of the tax and transfer system that need to be reviewed.

“And you’ve got an opportunity to do it through some independent body or some structure of government … because it gives you the flexibility and the emphasis is resilience.

“If you can have the resilience to deal with issues that arise, you can deal with crises as they come. You are better prepared.”