Economist wants end to security 'waste'

ANZ Bank chief economist Saul Eslake says Australians will look back on the resource boom and ask: "Where the .... did that money go?".

Speaking at an Australian Industry Group forum in Melbourne, Mr Eslake said Australia was suffering from productivity-stifling regulation, aimed at improving national security and corporate governance.

"I would suggest that most of that regulation arguably has done nothing to improve either national security or corporate governance," he said.

"But instead it has manifestly required the employment of tens of thousands of people who do absolutely nothing of any value themselves but detract from productivity and add to the costs faced by those who are doing something useful," Mr Eslake said.

He said the regulations were aimed at "conning" people into thinking the risks of terrorism or corporate fraud were greater than they actually were.

"You are at far greater risk of dying in a car accident on your way to the airport than you are of anything that happens once you get past the airport security, if indeed you can without losing a shoe or your shaving cream," Mr Eslake said.

"Similarly the likelihood that shareholders in public companies are going to lose their money and dividends because someone with access to power in those companies is going to break the law is not diminished by requiring hundreds of additional pages of reports filed to regulators who don't read them."

Mr Eslake called for such regulations to be reversed.

He said Australia was failing to make the best use of windfalls of $283 billion in the last four budgets, most of which was spent on tax cuts.

"I still can't help thinking that in 10 year's time, or whenever the commodity boom is over, people are going to look back at it and say `where the .... did that money go?'"

National agenda items, such as water resources and indigenous disadvantage could have been solved with the money the government has had at its disposal, he said. Australia needed to designate a fund for predictable longer-term expenditure commitments, he said.

Mr Eslake also said environmental challenges would impact on Australia's economic growth.

"Not only will countries like Australia have to do something about their own greenhouse gas emissions, but they will also have to bear at least some of the cost to developing countries for reducing that developing country's greenhouse gas emissions."