Achieving Australian Abundance

The Diplomat

19 hours ago

The central operating principle of Australia's current Labor Party government has been a 'whole-of-nation' approach to both national and foreign policy. The idea is that each sector of Australian society contributes to the country's overall capabilities, and each sector should see itself as part of a converging web of interrelated components that influence and affect one another.
The key to effective statecraft is getting the fundamentals of a prosperous society right, and making sure these fundamentals are capable of adapting to changing circumstances. Urban planners may not recognize themselves as foreign policy actors, but if the most important capability Australia has is its human capital, then the environments that allow people to excel are imperative.
This is the crossroads Australia currently finds itself at. Australia's present and future capabilities face two extraordinary hurdles. The first is the exorbitant cost of housing in the country – particularly in its major cities – and persistent impediments to boosting supply. The second is that Australian cities have urban rail networks that – due to irresponsible government neglect during the second half of the 20th century – are decades behind where they need to be for today's city populations, let alone projected future city growth.
Combined, these two problems inhibit the flourishing of individual Australians, and the flourishing of the country's most economically productive urban centers. The result is a stifled country that is unable to fully unlock its potential, and therefore unable to navigate an increasingly complex and unstable world with confidence and sophistication.
In recent interviews, Australia's treasurer, Jim Chalmers, recognized that this is a problem, and has begun discussing the Ezra Klein and Derek Thompson book, 'Abundance.'
Or, as the kids say, Chalmers has been 'Abundance-pilled.'
The central thesis of Klein and Thompson's book is that a dense web of regulations, processes, consultations, and reviews are getting in the way of producing outcomes that should be deemed 'progress.' They argue that in the United States – but this is also true of Australia – it is becoming to difficult and inefficient to build the things that are necessary for thriving societies. Or, as Chalmers has said, 'We want good things to happen, we've got to stop strangling good things from happening.'
Yet in order to seriously address this problem, there is a major structural issue that needs to be both acknowledged and dealt with. Australia has one of the highest rates of tertiary education in the world. This is an absolute positive, and education should never be discouraged. But the unintended consequence of the rise of widespread tertiary education has been the lack of productive outlets, well-paid, or status-providing jobs for university graduates in the private sector. As a result, the state has felt the need to absorb this cohort into the bureaucracy. This has created a larger class of rule-makers and consultants, making rules and seeking rents for a greater array of aspects of life.
According to the Australian Bureau of Statistics (ABS) there are now almost 1 million people working within Australia's various bureaucracies (state and federal), with an addition of 50,000 people in the last year alone. This is not a positive trajectory, but given the difficulty in actually reducing the size of the bureaucracy – especially in a city like Canberra, where government is the industry – the solution Chalmers and the rest of the Cabinet (as well as their state counterparts) may have to tackle is one of culture.
For this, the government would need to find a way to shift the culture of the bureaucracy to see its personal rewards not in the administration of a web of complex rules, but in the production of efficient and effective outcomes. That is, a way of making pride flow from green lights, not red.
Being able to unlock both a new vast supply of housing stock, and a great expansion of public works, is fundamental to addressing Australia's dire cost of living, but also addressing the country's major capability deficit in its lack of economic complexity. Affordable housing is essential for people to be able to take economic risks, and creativity thrives in urban centers with dense public transport networks.
Therefore shifting the culture of the bureaucracy to have a laser-like focus on efficient outcomes also should create the conditions for tertiary educated Australians to find well-paid and high status jobs in the private sector – or create these jobs themselves. This would weaken the need for the state to absorb these highly educated people itself, and subsequently weaken some of the mechanisms that inhibit Australia's abundance.