In an opinion piece in today's Sydney Morning Herald, Ross Gittens made the point that although Australia's mining tax has been horribly implemented, it makes economic sense, and the coalition's opposition to it is nothing more than opportunism:
The case for requiring the miners to pay a higher price for their use of the public’s mineral reserves at a time of exceptionally high world prices (even now) is strong. Remembering the miners are largely foreign-owned , a well-designed tax on above-normal profits is a good way to ensure Australians are left with something to show for all the holes in the ground.
Similarly, the argument that a tax on ‘‘ economic rent’ ’ (above-normal profit) is more economically efficient than royalty payments based on volume or price is strong, as is the argument that taxing economic rent should have no adverse effect on the level of mining activity. Relative to royalties, quite the reverse.
But Abbott’s response was utterly opportunistic. Abbott would have opposed the tax whether it was good, bad or indifferent. He saw an opportunity for a scare campaign and he took it, particularly when it became clear the big three miners were out to defeat the tax by bringing down the government and so would have bankrolled his election campaign.
But it is another point made by Gittens that really caught my attention:
For too long, the private partisanship of those who want to see good economic policy lead to good economic outcomes has blinded us to an obvious truth: if you look back at the reform we’ve implemented, you find almost all of it happened because it had the support of both sides.
It’s been too easily forgotten that all the potentially hugely controversial reforms of the Hawke-Keating government – deregulating the financial system , floating the dollar, phasing out protection and moving to enterprise bargaining – were supported by the Coalition.
The lesson for people hoping for economic reform is that unless they’re willing to use what influence they have to urge bipartisanship on their own side, they should expect precious few further advances.
While the “two sides” of the economic spectrum live in a world of black and white, good and bad; the real world is nothing but grey. It is true that sometimes one “side” is correct while the other is wrong, but a lot of the time both are equally wrong and it is the tempering of the two (bipartisanship) that allows for the best possible outcome. Bipartisanship shouldn't be encouraged because it makes us feel all warm and fuzzy. It should be encouraged because a lot of the time it is our best hope for the best outcome.