Coalition must keep faith in the free market but make it work

First Published in The Australian.

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Consider these facts: low growth, negative productivity, high inflation, high interest rates, new taxes, record high spending and subsidies. And some results: 85 per cent of new jobs last year were non-market jobs, small business insolvencies are through the roof, GDP per person is $113 lower and Australia is about to hit $1 trillion in debt. Labor’s economic model has debased our market economy. Australia isn’t in a technical recession but it feels like a recession for too many Australians.

We need change, not more of the same. We Australians must remember the things that made the nation the finest example of Western civilisation. The English-speaking world was made rich by the market. At its heart, the market model has the rule of law, competition and freedom to innovate. It does not have the government as the market.

Our model has been adopted by others in some form. China has adopted the idea of market-based innovation within a controlled environment. Unlike the former Soviet Union, the Chinese hybrid has delivered something people in the English-speaking world actually want – like TikTok.

Millions of Australians are also enamoured with Temu. Again, this is an achievement the stuffy Soviet communist regime never achieved. No one wanted to buy anything from Russia during the Cold War. The contraband American blue jeans inside the Soviet Union were symbolic of the failure of communism.

Labor has promoted non-market employment, union graft, government bureaucracy and subsidies fuelled by higher taxes. The response cannot be more of the same. More regulation, more taxes and more subsidies only makes the problem worse. I understand the political arguments about the 80s liberal agenda being harder to sell today, but it would be a big mistake to give up. What is the alternative to Labor’s big-state, big-subsidy model if we give up on markets? A “Labor light” model that entrenches the false economy for all time?

The response must include two key elements. Firstly, we must recognise that we haven’t done enough to enable functioning markets in recent years. What we are seeing is not a failure of free markets. It’s an inevitable failure of the bastardisation of free markets. The Prime Minister says: “We all know the mindset that left Australia exposed to this global shock.” He implies markets have failed Australia. The truth is Mr Albanese is apportioning blame to a system that is neither free nor competitive. His government has systematically destroyed the market in Australia. We are closed for business under Labor.

We are slipping in the global measures for competitiveness and ease of doing business. In one year alone, Australia dropped five places in a global ranking of international competitiveness. For example, during a liquid fuel crisis, we have 42 years of Australian oil underground that industry has almost given up on. Who could blame it? The environmental laws alone have imposed up to eight-year processes to approve production of gas and oil. Labor’s EPBC deal with the Greens will make it ever harder to get energy security, whether it be fossil fuels or industrial-scale renewable energy. Equally, it is hard to have a sensible debate about the limits of regulation. The government piled on 5000 new regulations during the last parliament and 400 new laws, costing $5bn. The economy is sicker as a result.

Our side should have done more to promote free markets. The Morrison government put in place a number of particularly egregious policies. We saw the “Compensation Scheme of Last Resort” rather than fixing ASIC’s systemic failure to enforce laws. There were also multiple government insurance schemes established and not enough scrutiny to justify going to 12 per cent super, or getting integrity into the NDIS. Rip-offs and waste is are now endemic.

I understand people can conclude there is a uniparty. Unless we do more to differentiate, fragmentation will fester, which is bad for policy coherence and our security. Secondly, there is a way to respond to the latest geopolitical dynamic without adopting Labor’s model. It starts with some key facts about today’s unipolar world. The Chinese economic model has been successful to a point, because it has embraced the innovation that comes from markets – but in a controlled way.

True communism failed in China as well as Russia. Further, the undermining of trade and fair dealing through the global trading system means we shouldn’t run our model on autopilot. Between the undermining of the WTO and Trump tariffs, the 1980s model is gone.

This doesn’t mean we drop our faith in markets but it requires us to think harder about how we boost our nation’s competitive position. This can be measured by size of government and tax levels, complexity, regulatory burden and approval times. We need markets that deliver cheap energy based on our own abundant natural resources, unburdened by green tape. This is not our reality.

We need markets where it is cheap and easy to build a house. If you want to build a cheap house, you should be allowed to do so! At the moment, it’s literally illegal. In short, we have to accept the failures of the past are being experienced by the population. Being honest about this is a prerequisite for future trust. It doesn’t mean we junk the principles and policies that made our nation the best of the West. We need to make the markets work for all Australians, not just Labor’s mates.

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Senator Andrew Bragg is the opposition housing and environment spokesman.