At today’s Queensland Jobs Growth Summit at Parliament House in Brisbane, I did my best to argue for good economic policy. After Deputy Premier Jackie Trad’s speech, I asked her whether the Government would consider fast-tracking the review of taxi services (so Uber could be legalised) and deregulating retail trading hours. I was very pleased when the Deputy Premier noted she was prepared for the question because she subscribes to this blog, and I was also grateful for her considered and comprehensive reply.
On taxi services and Uber, the Deputy Premier said it is important to take the time to get the new policy settings right, which I cannot disagree with, although I am still surprised the Varghese review was given ten months to do the job. I was pleased the Deputy Premier said she recognised that change in the sector was inevitable due to digital disruption. She noted that the Government faces the difficult issue of what to do with people who had invested a lot of money in taxi licences, and her words suggested to me that the Government is considering compensating licence holders for losses in licence values associated with Uber’s entry into the market. Some compensation appears unavoidable from a political point of view, but there is arguably no sound public policy rationale for compensation, as Rod Bogaards argued in a guest post earlier this year.
On trading hours, the Deputy Premier argued that consumption expenditure is growing at a reasonable pace in Queensland and there thus does not appear to be a need for changes to trading hours’ regulations at the current time. I would have replied that, while it may be so that consumption expenditure is growing, there would clearly still be benefits to consumers if there were deregulation, through the greater product choice and lower prices available at supermarkets which would be allowed to open for longer. Also I would note that, as shown in Queensland Treasury’s latest brief on retail trade, growth in retail trade in Queensland has been significantly below the national average over the last twelve months. So there is certainly room for retail trade to grow further, and deregulated trading hours could assist in this regard.
The Jobs Growth Summit was hosted by the UQ School of Economics and the Australia Institute, and sponsored by my business Adept Economics, among other organisations (see image below). The event featured some notable speeches, in addition to the address by the Deputy Premier, particularly from Saul Eslake, who highlighted Queensland’s relatively low educational attainment and productivity, and from Professor John Quiggin, who argued for a reversal of contestability reforms in vocational education and training (VET). John suggested that the VET reforms across Australia have been, in his memorable words, a “bipartisan disaster area.” Clearly the implementation of contestability has been imperfect, and some rorting has occurred, but I think it would be a mistake to go back to TAFE providing all publicly-funded training as John suggested. When contestability was introduced, there were important market design issues that were not well thought through, particularly regarding appropriate subsidy levels and the required level of oversight, but we should not abandon the important efficiency and student choice benefits that contestability brings.
Finally, as I suggested in an earlier post, the Jobs Growth Summit will not be enough on its own, and there is now a need for action in addition to talk. The Queensland business community needs to continue pushing hard for necessary policy changes (e.g. cutting payroll tax, deregulating trading hours, etc, as I suggested in the paper I prepared in the lead up to the Summit). The structure of the Summit and the very short time given to industry representatives to speak meant that, in my view, important concerns from the business community regarding government policies were not expressed. Queensland needs to hear more from its business leaders regarding the policy settings that are necessary to promote jobs and economic prosperity.
Queensland Jobs Growth Summit Sponsors