The world trading system has been a foundation stone of Australia’s 27 years of uninterrupted economic growth. It helped deliver declining unemployment and steadily rising living standards. Sadly, that system — and the benefits it has generated — can no longer be taken for granted.
Protectionist sentiment continues to rise around the world and the language of market gain is giving way to the language of strategic rivalry. While the benefits to Australians of improving and strengthening the current system are clear, the voices of business and civil society have been heard only quietly to date. It would be an error to think that nothing need be spoken loudly in its support.
Influence of governments on the world stage begins with good policy making at home. Despite high-profile tensions between our trading partners, Australia has progressed a number of multilateral, regional and bilateral trade agreements. Yet domestic policy has continued to retreat into protectionism in some areas. Australia has one of the world’s most active ‘anti-dumping’ regimes, for example.
The Productivity Commission is required under its Act to report annually on industry assistance and its effects on the Australian economy. The Trade and Assistance Review 2017-18 contains the Commission’s latest quantitative estimates of Australian Government assistance to industry.
The annual Review also provides information on tax concessions and budgetary outlays that may be construed as assistance, including their target, size, and nature. Views inevitably differ on what constitutes industry assistance and whether it is warranted. This report offers full transparency of all support measures and provides a basis for considered assessment of the benefits and costs of the arrangements.
One of the biggest developments highlighted in this year’s Review is the proliferation of government project finance vehicles. While individual schemes may, or may not, be worthwhile, they all impose additional risk on the Australian taxpayer that has generally not been made clear.