The announcement of the second Albanese ministry gives us some idea of how seriously it will execute its second term economic agenda. Initial reaction has been shaped by the dumping of tech sector champion Ed Husic, who seemed to be the only minister who had ever heard of innovation.
The 2025 election campaign was in some ways most notable for the lack of policy announcements. Almost everything Labor proposed was included in its Budget released in March. This does not mean that this is a government without ambition.
On the ABC’s Insiders the morning after the election, Treasurer Jim Chalmers said:
“The best way to think about the difference between our first term and the second term that we won last night, [the] first term was primarily inflation without forgetting productivity. The second term will be primarily productivity without forgetting inflation.”
He also referred to the commissioning of reviews by the Productivity Commission (PC) of the five pillars of productivity. These pillars are:
- creating a more dynamic and resilient economy
- building a skilled and adaptable workforce
- harnessing data and digital technology
- delivering quality care more efficiently
- investing in cheaper, cleaner energy and the net zero transformation.
The quality and relevance of the PC has been questioned in this publication last year by Mark Dodgson and by me the year before. I had put my observation that the slowdown in productivity had coincided with the creation of the PC some years earlier with then-chair Peter Harris. His response was to say that the failure was government’s alone, because it did not act on the PC’s recommendations!
Writing for The Conversation after the election Professor Roy Green noted:
“The question remains, will these individual measures on their own, however meritorious, be sufficient to shift the dial on Australia’s productivity performance without a more comprehensive approach to innovation and industrial policy?”
So where does responsibility lie within government for taking meaningful action on whatever recommendations emerge from the PC reviews?
The Treasurer and the Minister for Industry and Innovation and Minister for Science Tim Ayres are the locus for any activity on the wider issue of creating a more dynamic and resilient economy.
Senator Ayres is an interesting choice. He spent over twenty years in the Australian Manufacturing Workers Union (AMWU) and has therefore a great familiarity with that part of industry. Whether that stretches into the wider areas of information technology is an open question.
An interesting addition to this mix is Andrew Charlton as Assistant Minister for Science, Technology and the Digital Economy. Dr Charlton has a PhD in Economics and founded AlphaBeta, a consultancy that combined business strategy, data analytics and econometrics to provide advice on responding to profound technological, economic and social change.
The question is how effective he can be. Dr Charlton was economics adviser to former Primer Minister Kevin Rudd at a time when Treasurer Chalmers was chief of staff to former Treasurer Wayne Swan. In these roles they were at times at odds with each other. More recently they jointly penned an item published in The Quarterly Essay which posed some important questions about our economy, and one for The Monthly on the robot race.
Workforce development is shared by the Minister for Education and the Minister for Skills and Training. The latter introduces the connection with the Minister for Employment and Workplace Relations.
There is no change in Education (Jason Clare) or Skills and Training (Andrew Giles) but Amanda Rishworth takes up Employment and Workplace Relations as part of a rotation, with Tanya Plibersek taking Ms Rishworth’s old gig of Social Services, and Murray Watt moving from Employment to Ms Plibersek’s gig in Environment.
There were plenty of complaints out of the IT sector about the workplace law reforms that clamped down on contracting. However the biggest economic issue is the harmonisation of skills qualifications. The program to address electricians first announced during the campaign is a start, but it looks to be excessively timid.
Harnessing data and digital technologies should be a Labor strength. In developing the National Broadband Network, Labor commenced a process to capitalise on the benefits of the digital economy.
The opportunity to bring the digital economy back into Cabinet as part of Communications has been missed, but at least it returns through Andrew Charlton’s assistant minister role, and his new assignment as Cabinet Secretary.
The focus on communications as being an infrastructure issue was framed by the decision to build the NBN, but as a consequence important policy issues relating to media law and online safety were left well away from the centre of the economic program.
New Communications minister Annika Wells has just resolved big issues in aged care. While Anthony Albanese explained the inclusion of Sport as being because it revolves around infrastructure, the journalist who suggested it would help find a pathway to gambling advertising reform is probably very close to the mark. Certainly it is a challenge that Minister Wells will approach with gusto.
It is harder to see how any of the ministerial appointments help the agendas of delivering care more efficiently or accelerating the transition to cheaper renewable energy. “Care” is quite dispersed across the ministry, and regardless, is primarily a state issue. It is hard to find anything that Chris Bowen has done wrong in energy over the last three years, but that is largely because his approach has been timid. It too is caught in the federal-state imbroglio.
Perhaps the conversation about restructuring federal-state relations is the overhanging question that has no home.
The process by which Labor elects the ministry is a good system. Achieving a factional balance is actually a good measure against instability as prime ministers who appoint their ministers usually get caught having to favour the faction that delivered them the leadership. The same is true of state representation.
The fact that factional bargaining has become so institutionalised has meant it is easy to forget that the final outcome is still voted on by caucus. This is unfortunate.
The pig headedness of Tony Burke and Mr Bowen insisting that Mr Husic be dumped instead of one of them going just reflects how far the NSW Right has fallen into disrepair. An unfortunate consequence is that the factionally unaligned Andrew Leigh lies outside the ministry as an assistant minister – albeit with productivity added to his responsibilities.
As a final observation, I don’t think any executive (ministry plus assistant ministers) has ever boasted three members with PhDs in economics. And this is an executive serving a prime minister who has a Bachelors degree in the same discipline.
There certainly is the Ministerial talent necessary to achieve the goal of a focus on improving productivity without forgetting inflation. Let’s just hope the Productivity Commission gives them good reports to drive the agenda.
Do you know more? Contact James Riley via Email.