View from The Hill: Mathias Cormann offers blunt advice on countering populism and reforming the economy

Mathias Cormann, these days secretary-general of OECD but formerly Liberal finance minister, is professionally non-partisan in his current role.

But that’s not quite the same as being non-political.

In a weekend speech Cormann delivered a sharp message into an environment of surging populism – a message both sides of politics, but especially the Coalition, would do well to take to heart.

Cormann warned that “we all need to engage” with what was being offered by populism “because it is winning an audience it did not have even five years ago”.

Addressing the Centre for Independent Studies, Cormann said the grievances populism spoke to were real.

They included real incomes having gone backwards, a generation locked out of the housing market, high energy bills, infrastructure failing to keep up with need and communities feeling they weren’t consulted about decisions.

“Anyone who dismisses those grievances as ignorance has not understood what the data is clearly telling us,” Cormann said.

“But a correct diagnosis of the symptoms does not validate the prescription seemingly getting traction.” For instance, a return to protectionist policies would be counterproductive, he said.

“Regional Australians whose support the populists court are the ones who paid most for the old tariff wall.” Similarly, arbitrary caps on migration, regardless of their effect on business, hospitals, aged care and the universities, would be harmful.

Rather, the answer was to fix the issues concerning people about migration – housing supply, infrastructure, services and the composition of the intake – “not to shrink the country”.

“Because the evidence is clear.

OECD research across Australia’s regions finds that where more migrants arrived, employment among Australian-born workers grew faster, not slower, with no measurable effect on their wages.

"Migrants to Australia in aggregate are better educated than migrants to any other OECD country.

That is a policy choice that Australia has made.