In case you missed it, Treasurer Jim Chalmers has taken the unusual and intriguing step of repeatedly referring to a book (Abundance) in his public comments about what's needed next in our economy. He's talking specifically about productivity, but that's not why you and I should care.
We should care because he's the Treasurer (doh), and because we (BlueChip) are observers of both markets and public discourse. It's the intended impact of the book references that we find most fascinating about this. The Treasurer is using signalling, via the book reference, to create change, to tweak or redirect parts of our market infrastructure (such as the RBA), and to tell the public sector what good looks like.
The book is worthy of note because it's central premise is that "the real threat to liberal democracy isn't autocrats - it's the lack of effective action by progressives". Ezra Klein and Derek Thompson lay out a reform blueprint that calls for countries like ours to reduce
regulatory drag, solve housing supply, and increase innovation and productivity among other things.
As with anything we share here, we see this signal as important context for your work.
Here's why:
1. We can't find a precedent for an Australian treasurer using a book like this (Noting Treasurer Wayne Swan referred to his own book.)
2. Chalmers has mentioned the book repeatedly ... in an exclusive SMH interview, at the National Press Club, in ABC interviews and in replays by, for example, the AFR.
3. Abundance (the book) is seductively simple. Reduce regulatory drag and thus increase prosperity.
The RBA, as both a regulator and our central bank, has neatly and cleverly delivered a potential reform (a ban on card surcharges) that hits the middle of a particular Venn diagram the Treasurer has identified. The circles are:
a) Boosts productivity.
b) Reduces regulation, economic friction or hurdles to growth, commerce and innovation.
c) Doesn't require a long implementation or slow time-to-market.
Landing in the overlap of the three circles is tricky.
If Treasury or the Treasurer matter in your world, you'll want to watch how this RBA move plays out. Of the big four, only CBA supports all the proposed RBA plans to ban surcharges. This appears to be a smart move if you're CBA, and conversely, wildly self-interested behaviour from Westpac, NAB, and ANZ, given the productivity boost and the consumer and business "win-win" from the ban.
It will be interesting to see how, and if, media, consumer groups and customers respond to the banks' varying positions, and what the Treasurer does if the bank CEOs don't read the book and thus the government's mood on this.
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