NATIONAL REFORM SUMMIT Today's national summit represents a historic opportunity
Today the National Reform Summit has a historic opportunity to help Australians once again be true to their international reputation as a people willing to strike the bargains necessary for the difficult business of reform. The country suffers a split personality: sometimes deadly serious about reform, at other times too willing to duck the challenge. Just after the global financial crisis, treasurer Wayne Swan faced the challenge - and the opportunity - to repair the budget. He didn't rise to the occasion, relying instead on China and the mining boom to finance our self-indulgence. 
Monday's sharemarket meltdown in China - Chinese stocks face the biggest decline since 1996 - is a timely reminder that reform dodgers cannot hide forever; the end of the boom could have the chastening effect of a recession. The reality is that our fortunes are yoked to the fortunes of the world's second largest economy, China. As China chases growth, it is likely to try to boost exports. Cheaper exports will be a boon to price-conscious Australians but represent more competition for emerging economies already suffering from sluggish trade. It may make life even harder for a local outfit such as BlueScope Steel; the company says that without job cuts it will have to close Australia's largest steel plant at Port Kembla, NSW. As for China, the task ahead is to make the difficult transition from an economy reliant on investment and construction to one built on consumption and services. In the longer term, China is likely to be a prodigious engine of growth - and this will be a big positive for a capital-hungry, free-trading nation such as Australia.
It's important to take a long view. Consider how history will be written 100 years from now. What we are witnessing is the return to power and influence of once great civilisations - China and India - that had been overtaken by Europe's industrial revolution. It is against this background of short-term volatility and long-term promise that we must judge today's reform summit in Sydney. The statement issued yesterday by the summit faithfully sets out familiar problems - from low productivity growth and budget deficits to inefficient state taxes and sub-par retirement income policy - but is long on rhetoric and short on action.
Even so, there is room for careful optimism. The statement - which is to be finalised today by delegates from business, unions and civil society - does manage to jump some political roadblocks. Those disparate groups have signed up to economic growth and a balanced budget. To our readers these may seem bleedingly obvious aims but there are noisy constituencies in our fragmented system of politics for whom growth is a swear word and a budget is a licence to spend others' money.
The statement makes a clear commitment to tax reform - and this as politicians from both sides fall over each other to rule out any specific tax change proposal. The working document for the summit also scores with a commitment to improve productivity, which is the key to driving growth when interest rates are at historic lows and fiscal policy is constrained. It will be vital to pay serious attention to vocational and educational training, which is neglected by comparison with higher education.
As for retirement income policy, the delegates sensibly have decided to look at both the age pension and superannuation tax arrangements - as well as their interaction. In politics we have the farcical situation of Labor ruling out changes to the (unsustainable) age pension and the Coalition refusing to rethink (overly generous) superannuation tax concessions. On fiscal policy, one of the most important reform points, the statement reflects division among the delegates. They want budget repair but can't agree on the relative contributions of tax hikes and spending cuts.One way ahead would be to draw on Australia's best tradition of reformist trade-offs. In the 1980s the Hawke government presided over a compact whereby unions moderated wage demands and received in return benefits such as award superannuation. In the same way, today's summit could consider a trade-off under which unions and the welfare sector would sign up to credible fiscal repair and tax reform in return for progress on retirement income policy and extra funding for education to help boost the nation's productivity. We approach today's summit with a measure of apprehension but hope the cause of serious and concrete reform will carry the day.