This does not mean governments and oppositions need to share the same policy responses as future developments unfold. But, given their agreement about the need to raise productivity in order to achieve our other (including our important social) objectives, it means they do need to respect a public process that provides an opportunity for the wider community to help them resolve any differences that emerge.

The system of seeking independent advice about the likely economy-wide consequences of micro-economic policy initiatives under consideration has, until now, underpinned bipartisan support for micro-economic reform–by providing an agreed basis for expecting future governments to account for the consequences of policy decisions they take during their time in office.

In that context the reviews recently undertaken on motor vehicles and clothing and textiles dealt with issues that have long-term effects that will endure beyond the life of the present government. The consequences of the government decisions that followed will play out over decades.

In establishing these reviews, the government had an opportunity to use the arms-length advisory process, introduced by an earlier Labor government, that has underpinned bipartisan and community support for micro-economic reform. Instead it placed responsibility for advice in the hands of government insiders, most of whom had well-established views on what the outcome of their reviews should be. It explained these ad hoc reviews as fulfilling pre-election commitments. Commitments to whom? Why would a government committed to pursuing the community-wide benefits of an open economy put bipartisan support for that objective at risk?

The present government continues to rely on the Reserve Bank of Australia, an independent body that operates at arm’s length from governments, to help resolve pressing and immediate macro-economic challenges affecting the performance of the economy. But in the two industry reviews it has so far commissioned it has sidelined the Productivity Commission,–the independent body responsible for arm’s length advice on micro-economic reform–as though the two industries reviewed were not connected to the rest of the economy.The decisions taken since the early 1980s to reduce Australia’s dependence on protection and to remove other impediments to a more productive economy are primarily responsible for the prosperity we now enjoy. The consequences of decisions taken now will emerge later, perhaps a decade down the track, beyond the life of the present government.

Incumbency therefore confers power to make decisions in the knowledge that later governments will have to deal with their consequences.

It is precisely for this reason that a process was put in place by an earlier Labor government to provide a public discipline on decision-making about micro-economic reform.

That process of decision-making after open inquiry and public advice by the Productivity Commission has, until now, underpinned bipartisan support for micro-economic reform. It has preserved the authority of governments over policy, while providing transparency and an economy-wide perspective in the advice going forward to them on micro-economic policy issues.

Advice and decisions that reflect short-term political expediency devalue that process. They reduce the incentive and need for future governments to account for the long-term consequences of decisions they take during their time in office. In that event, Australians generally, not incumbent decision-makers, will be the losers.

If the present government is to maintain momentum in micro-economic reform in a way that brings into account the consequences for all Australians, it should respect the form of policy governance that has an economy-wide perspective and a time horizon extending beyond the next election.

And, while it has embraced market economics as the basis for national policy, it should remember that national prosperity does not follow automatically when governments commit to market economics. It follows only when they act on that commitment.