Accelerating and Broadening Australia's Microeconomic Reform Agenda

Australia is undoubtably a nation rich with opportunities, with extensive social andeconomic infrastructure, stable and responsible government, and abundant naturaland developed resources.But Australia also faces some significant challenges, including reducingunacceptably high levels of unemployment, managing environmental concerns, andresponding effectively to global competition and structural and regional change.To meet these challenges and make the most of our opportunities, we need to gainfurther leverage on our resources by improving our nation’s productivity and,importantly, flexibility. Microeconomic reform plays an important role in thisregard by improving the incentives, which govern the way we use our resources.While Australia has certainly implemented some significant microeconomicreforms in the last decade or so ¾ the benefits of which are beginning to show ¾the task is far from complete. For example, further reform is needed in transport,particularly rail and the waterfront; utilities; the labour market; resource access;and our tax system ¾ areas which impact on various sectors of our economy, notleast of all our agricultural and resource sectors.But setting the right incentives for the productive use of our resources needs toextend beyond these traditional areas of reform. We also need to be sure weprovide efficient and effective education, health care and community services. Themanagement of our environment is also of critical importance, particularly ourwaterways. How we manage these resources, in both rural and urban areas, needsto be subject to rigorous scrutiny and, where appropriate, reform ¾ in many ofthese areas the reform process has only just begun.