Interview with Micheal Mclaren on 2GB

Subjects: <Economy, Free Markets, EPBC>

E&OE.........

Micheal McLaren

Andrew, good to speak again.

Senator Bragg

Hi, Michael, how are you?

Micheal McLaren

I'm okay. You concede that, sort of, you know, waving the flag for the '80s Liberal agenda—free markets, less subsidies, less protection—is, as you say, harder to sell today. There's a reason for that though, isn't there?

Senator Bragg

I think people are rightly very frustrated with their politicians. They feel that their national leaders have let them down because twice in six years we've had a massive supply chain problem and it feels like no lessons were learnt. And so Australia has been exposed as being very dependent and that has created huge amounts of anxiety. And I respect and understand that. And so that's a good debate to have about our dependence, but it shouldn't be confused with a desire to reduce our competitiveness or to reduce our belief in markets.

Micheal McLaren

Yeah, fair enough. As you say, twice in the last few years we've had massive supply chain issues. Now, that happens to coincide with, I suppose you say, the culmination of the free market ideology where we basically saw all of our, bar two, oil refineries go overseas, our ability to to make things, cars, you name it, gone. A lot of the industrial base, gone. And they went because the subsidies that propped them up went with them, or first. Did we make a mistake being so married to free market ideology?

Senator Bragg

Well, I'm not sure we really have a free market in Australia because the level of regulation is so high. I mean, it's— Australia is closed for business. It's impossible to do things, whether you're a small business or whether you're a massive monolithic mining company. So I don't believe we really have competitive markets. Our competitiveness overall in terms of tax and regulation is very much diminished. But in terms of your question about the supply chain issues, I think there is a case to be made that there are certain things that are so important to the security of the nation that there needs to be a different set of rules or arrangements for those. But that's not to be confused with the overall level of regulation and tax, which I believe has made the country uncompetitive.

Micheal McLaren

I got— yeah, we certainly are uncompetitive. We've got internationally very high energy prices, for example.

Senator Bragg

Yeah.

Micheal McLaren

Okay, so let's apply pure free market ideology to that. Free market ideology in energy would say, right, well, government won't be setting a net zero target. We just say to the market, you supply energy, we need energy, you give us the cheapest form of energy, we're going to get out of here. Now, if we were to do that, there is no guarantee that the wind turbines and the solar farms would be built. We might get coal-fired power stations, but there's no guarantee we'd get that either. But we would truly test the economic model. But neither the Liberals nor the Labor Party are willing to do that.

Senator Bragg

Well, look, one of the reasons that I've always thought it was a worthwhile initiative to reduce carbon emissions is because clearly we have a major environmental problem. But we've also got to make sure that we consider Maslow's hierarchy here and that we actually have enough cheap energy to get the basic things that Australians need. Now, what we should have had is more renewables, more fossil fuels, more of everything. The fact that we have 42 years of oil under the ground is a disgrace. And the fact that we're shipping it in is embarrassing for the country. The Prime Minister had to go around cap in hand to get these, these basic liquid fuels. So I just think you want to have laws that promote the market, that allow you to use uranium or oil or renewables. Like we've had this sort of purity test we're trying to apply to people where either you love fossil fuels or you love renewables. I mean, I just want to see more of everything.

Micheal McLaren

Okay, how do you sell that though to the moderates in your faction of the Liberal Party? As you say, quote unquote, more fossil fuels, more oil. I mean, they'd be having a heart attack listening to that, wouldn't they?

Senator Bragg

Well, I don't know what you mean by, you know, factions and stuff. I mean, I've never really been a big believer in these labels. I mean, I just want what works. I've always been of the view that you should try and reduce pollution, but we've got to make sure that we take care of people's basic needs. And I believe we should be having more renewables, but we also need more fossil fuels. Like, that's the reality. That's where we are. And it seems insane to me that we'd be one of the world's biggest exporters of fossil fuels but wouldn't use them ourselves. It just seems an insane contradiction to me.

Micheal McLaren

Yeah, well, I would agree with that. You said in the piece, and I quote here, "We're not seeing a failure of free markets." What you said is, "We're seeing the inevitable failure of the bastardisation of free markets." Just explain that a little.

Senator Bragg

Well, this is really Labor's model where you see massive growth in the non-market economy. You see low productivity, you see high interest rates, high inflation. And a lot of this is driven from the fact that you have, you know, very high punitive taxes on the real economy, a very high level of regulation on the real economy. And so you're seeing a growing government sector, growing government waste. Growing support for unions, more rip-offs, and this is now the economic model that we have in this country, and it's very damaging for the typical Australian worker.

Micheal McLaren

Okay, now you're in politics, okay, you're a politician, your role is government, okay, so let me ask you this: in Andrew Bragg's world, where does government step back and the market step forward? Let's take, let's take, uh, let's say steel, the steel industry, or even better, let's take aluminium, because we know the big aluminium producers in this country are on the brink. They're all getting government bailouts if they haven't already shut. So all these different heavy energy-using parts of the economy, where does the government say, no, you're not competitive compared to the big plants in China, down you go? Or, you know what, we think you're strategic, we better at least have some because the Chinese may not supply us with everything we need, so we'll prop you up. Where is that? Where's the Andrew Bragg line?

Senator Bragg

Well, there's a couple of things here. Firstly, I think we are in need of the biggest step change in a quarter of a century. I think we should be looking at developing more like a Fightback! style agenda to restrain spending, but also to recalibrate taxation. I think that's very important that we are ambitious there. We need to meet— we need to meet the expectations people have for us. And in the last decade, we haven't met their expectations. In terms of your specific answer that you want here, I think that we need to look at our direct competitiveness across the economy. So the level of taxation, taxation complexity, level of regulation, number of regulations, and then, frankly, you've got to look at some of the things that happen in the economy through the prism of security, and you've got to say, well, look, there are certain things that we actually need to keep Australians safe, and so we'll look at how we might support those within the confines of a more competitive economy.

Micheal McLaren

Okay, so what you're saying, I think, is even if we do the hard work, we peel back the layers of green, red, whatever other colour tape, we pull the unions back, we get out of it as much as we can, and even then, if some of our strategic industries are still uncompetitive on the international stage, applying the free market philosophy, then we can step in, but only then.

Senator Bragg

That's a reasonable formulation. I'm sure you would have had the late Jim Molan on your show many times. Many times. And you know, Jim talked about liquid fuel security a lot. And the fact is we haven't made any progress on that issue, and I think that could apply to other things, and we just need to do it in the most sensible way. But it can't be done outside of the overall macro environment becoming more competitive, because I don't want people to get confused about these things. There are strategically valuable things that we need to have to keep the show safe, but there is also a very important need to make the country more competitive. Interesting conversation.

Micheal McLaren

It's going to be one of those ones that even within the Liberal Party, with the Nationals of course, because we know not everyone's on board, going to be debating this as you start formulating response to the budget and obviously an economic platform going forward. Thank you for your time. We'll keep speaking, Andrew. Appreciate it.

Senator Bragg

Thanks, Michael. I appreciate it. Thanks.

[Ends]

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