Copying One Nation will leave Australians poorer, Morrison minister warns

Australian Finance Minister Mathias Cormann warned on Tuesday that mainstream political parties risk permanent electoral defeat if they attempt to mimic the economic platforms of populist movements. Speaking ahead of an address scheduled for Saturday in Brisbane, Cormann argued that copying the policies of groups such as One Nation will leave the country poorer and drive voters away from established parties. He stated that mainstream entities responding to a populist surge by adopting similar economics fail to recover lost support. Instead, they suffer a double loss, ceding ground to the original insurgent parties and losing centrist voters who have no alternative options. Cormann, currently serving as the head of the Organisation for Economic Co-operation and Development, holds the distinction of being Australia's longest-serving finance minister. His tenure spans the Abbott, Turnbull, and Morrison governments. In his upcoming speech to the right-leaning Centre for Independent Think Tank, he plans to urge both sides of the political spectrum to embrace a comprehensive reform agenda. This agenda extends from Goods and Services Tax adjustments to planning regulations, aiming to lift living standards and counter the rise of left and right-wing populism. The timing of the intervention coincides with the recent release of a biography by former Treasurer Josh Frydenberg. Frydenberg has recently cautioned that the Liberal Party must reconnect with the political center to maintain relevance among voters. He previously advocated for increasing the GST and eliminating certain exemptions, proposing that the generated revenue fund substantial income tax reductions. While Cormann supports these specific fiscal measures, his proposed platform is broader. He contends that the growing support for populist movements stems partly from the inability of major parties to improve living standards through necessary, albeit difficult, economic reforms. Cormann acknowledged that many current national issues developed during his time in office. He attributed this stagnation to a suppressed appetite for reform, which was dampened by a mining boom that filled government coffers and boosted household incomes. He traced the decline in reform enthusiasm back to 2005, when John Howard served as Prime Minister. According to Cormann, the revenue generated by the mining sector allowed all political parties to avoid tough policy decisions. He emphasized that this was not a failure attributable to a single faction. The desire for change faded across the political divide, affecting business sectors, the union movement, and parliamentary bodies equally. When economic conditions appear favorable due to a boom masking slower underlying trends, the public perceives no need to accept structural changes, Cormann noted. Politicians who propose such solutions face punishment for addressing problems that citizens cannot yet perceive or feel. He cited extensive international evidence from Britain, France, and Germany. In these nations, mainstream parties that adopted insurgent agendas saw their support shrink while the insurgents expanded. Parties that maintained their standing achieved success by outperforming populists rather than imitating them. The proposed reform package includes significant changes to the tax system. Cormann argues that the GST requires both an increase and broadening. He proposes slicing income tax rates and indexing them to inflation. Additionally, he suggests replacing state stamp duties with more efficient land and property taxes. On corporate taxation, he asserts that the current company tax rate lacks international competitiveness and should be lowered. Housing policy forms another pillar of his argument. Cormann challenges his own party, particularly at the state level, by asserting that reducing home rents necessitates a sharp increase in supply. He advocates for granting developers the right to construct medium-density housing near every rail and major bus line in capital cities. Under this proposal, approvals would be granted based on a code, with completion required within thirty days. Migration policy presents a point of divergence between the major coalition and One Nation. The Coalition has pledged to reduce net overseas migration to 100,000 for a period of two years, followed by a gradual increase to 160,000. One Nation has adopted a stricter stance, advocating for negative net migration over a three-year span. Both approaches aim to manage population growth, though the mechanisms differ significantly in intensity and duration. Cormann’s speech serves as a direct warning to the Coalition. He posits that merely echoing populist rhetoric fails to win back disaffected electorates. The electorate consistently prefers the original source of a policy idea over a derivative version. Consequently, imitation leads to electoral erosion rather than recovery. The former minister intends to present this analysis alongside his detailed policy prescriptions, urging immediate action to reverse the trend of declining trust in mainstream institutions. The address aims to shift the debate from reactive policy adoption to proactive economic restructuring.