New Queensland think tank the Australian Institute for Progress (AiP) has released a set of high-level policies for the Queensland election, which are mostly consistent with sound public finance and the promotion of free markets (see Our priorities for Queensland election). I agree with the AiP on the need to repair the budget, privatise assets and many of its other policies, but I question the seventh policy:
Enabling and promoting the industries where Queensland has a competitive advantage, specifically mining, agriculture and tourism.
Does the AiP really believe in an interventionist industry policy where the Government favours particular sectors over others? The AiP appears to have simply adopted the Government’s Four Pillars policy and knocked down one of the pillars: construction. But why shouldn’t the Government promote construction, or any of the other industries not listed? The Queensland economy is much more than three or four pillars, as I’ve noted in a previous post:
If it wants to promote growth and employment, the Government should not pick winners and discriminate between industries, but let market forces determine the optimal industry structure, a point that was repeatedly made by Ken Henry during the resources boom. I suggest the AiP should revise its seventh policy and replace it with something along the lines of: reducing the burden of regulation on all industries and only intervening where there is a clear case of market failure.
That said, I think it’s great that AiP has injected itself into the election campaign, and I support its call for a truthful campaign.
Disclosure: I was a participant in the foundation workshop for the AiP back in August 2014, but I’m not a member.