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History The Tasman Asia Pacific of 2004 builds on a 25 year history of work in economics, policy and government reform, undertaken by Tasman’s consultants, network and predecessor organisations. The rich body of work means that Tasman Asia Pacific has a vast range of experience and knowledge to draw upon in conducting its current projects. Formed in 1990, Tasman Institute and Tasman Asia Pacific built on the experience of the Centre of Policy Studies (CoPS) at Monash University, founded by (then) Professor Michael Porter founded in 1979. Michael Porter and CoPS in 1982 were awarded a Centre of Excellence Grant ($2.6 million), the only such grant in economics given by the Australian Government, following a competition across 350+ proposed Centres from all disciplines. CoPS and Tasman played lead roles in researching, consulting and advising on economic restructure, first in Victoria, Australia and then New Zealand and Asia. Work evolved on the policy issues of the day, including:
In the early 1990s, Tasman Institute co-founded and provided expertise, particularly for reform and infrastructure issues, under the banner of Project Victoria, a reform strategy for Victoria – with most elements of that strategy being implemented by the Victorian Government in the same decade. Since the mid 1990s, Tasman Asia Pacific has built upon the reform agenda built by Tasman Institute by undertaking consulting assignments in Asia on projects related to public finance reform, infrastructure and institutional governance. Infrastructure sectors examined have included state enterprise reform, fiscal decentralisation, water pricing and institutional reform, transport and energy. The focus has included Asian countries – including Indonesia, Thailand, Vietnam, Philippines, Malaysia, China, India and Fiji. Resulting from the work on infrastructure and economic reform, Michael Porter and Tasman have been commissioned by agencies such as the World Bank, APEC, the ADB, AusAID to advise on infrastructure, aid and general social and economic policies capable of delivering beneficial outcomes across the community. Tasman's experience covered a wide range of sectors including: Taxation and Welfare Reform Under Michael Porter’s direction, the Centre of Policy Studies (CoPS) at Monash University was responsible for designing a range of proposed taxation reforms and for co-founding a new journal - "The Australian Tax Forum" - a journal published by Monash University and which has played a leading role in the Australian tax debate. As part of the National Priorities Project, CoPS produced the two-volume Taxing and Spending, a complete set of proposals for reforming the Australian taxation, welfare and expenditure system. In the Priorities Review Staff in the Department of Prime Minister and Cabinet, Michael was responsible for the oversight of welfare reform policies including childcare and taxation. Michael had a seat at the Australian Taxation Summit in the Australian Parliament chaired by (then) Treasurer Paul Keating, and was the author of "Option D" presented at the tax summit. This option involved a flatter structure of marginal tax rates, and with no tax-free threshold for most taxpayers, and few if any deductions. The ceiling rate of tax would be 30-35%, depending on the extent to which health, superannuation and education expenditures were replaced by targeted benefits. The resulting lower tax rates, and improved labour and savings incentives, were argued to promote more substantial rates of economic growth. Financial Reforms At the IMF Michael Porter was involved in advice and models of financial integration and exchange rate reform, which were used at and by the IMF, in explaining international capital movements, with special reference first to Germany and Italy; then subsequently other countries including Australia. This work in 1970-72 lead to recommendations for policy changes including the flotation of the Deutsche mark, in order to restore scope for independent monetary policy (with Germany fearing a return to inflation as the resulted of the deficit finance of the US war in Vietnam). This work on capital movements was subsequently published in journals including The Journal of Political Economy and was influential in demonstrating that monetary policy could no longer be independent in particular countries without a floating exchange rate. Floating exchange rate - the trade-weighted Treasury compromise Michael wrote position papers associated with the subsequent floating of the Deutsche Mark, and in 1972-3 worked as an adviser to the Reserve Bank of Australia on the same issues. from August 1973, when on the staff of the Department of Prime Minister and Cabinet as Senior Adviser, the Priorities Review Staff of Michael was responsible for reviewing Cabinet proposals on economic and social policy in briefing notes to the PM and Cabinet. Michael drafted proposals (jointly with officials from Treasury and Trade Departments) in August 1974 for the then Prime Minister on how and why Australia should move to a freely floating exchange rates. This was to include liberalization of domestic banks' forex positions, and matching liberalizations of foreign banks $A positions and capital controls. Despite the initial support of the the PM, Treasurer and other key Ministers of the day, the recommended changes were resisted by the heads of Treasury and then the Reserve Bank - despite top professional support in those agencies. The 1974 compromise was the trade-weighted "floating" exchange rate set by a committee each night (but with a random factor). In hindsight, the reforms subsequently implemented by the Hawke Government with Keating as Treasurer, to great benefit in terms of facilitating flexible adjustment of the economy to events, could have been implemented absent bureaucratic intervention 9 years earlier, would have had Whitlam's support. While the arguments for a float included that it would create discipline (with the rate depreciating post excess fiscal expenditures), the arguments used by Treasury to resist the float in 1974 were largely that the Labor government was undisciplined! Capital market reform Michael edited a volume, subsequently published by the Economic Society of Australia on capital market reform in 1977, and was commissioned to present recommendations (Study Number 1) to the Committee of Inquiry into the Australian Financial System (chair: Keith Campbell), Australian Financial System - Final Report, AGPS, Canberra, September 1981. The Recommendations to the Committee were on monetary targeting and exchange rate policy; recommendations that were adopted and subsequently fully implemented by Treasurer Paul Keating. Infrastructure Reform One of Tasman's major achievements has been in forming networks of expertise which have successfully developed and implemented models for private sector participation (BOTs/concession contracts/BOOs) in the water and sanitation, electricity and transport and other infrastructure sectors. In Australia, Tasman advised the Governments of Victoria and New South Wales on their electricity reform packages. In the Victorian reforms, Tasman focused on the introduction of competitive and market pressures in the contestable sectors of the Electricity Supply Industry (ESI) and regulatory incentives in the non-contestable sectors. Tasman proposed a competitive structure (which has been implemented) to enable trading of electricity across an independent, state owned electricity grid. Environmental Solutions Tasman has been at the forefront of property rights analyses of environmental problems and application of innovative and appropriate environmental management tools. Tasman’s pioneering Markets and Environment Project has made major contributions, stressing the fundamental role of a strong economy in facilitating a sustainable and healthy environment. Where environmental and economic challenges do seem to demand intervention, Tasman has worked to find the most effective ways to improve outcomes, consistent with a strong economy and an attractive environment. The Markets and Environmental Project has published four books: “Markets, Resources and the Environment”; “Environmental Resources and the Market-place”; “The Price of Preservation” and “Conservation Strategies for New Zealand”. Institutional Reform At CoPS Michael Porter led a reform agenda, which has been continued under Tasman, focussing on restructure of state enterprise and, particularly electricity, transport and aviation. CoPS published a large number of research and advisory documents consistent with subsequent moves towards restructuring and privatisation of electricity, airlines, rail transportations, water and telecommunications. Tasman has developed institutional structures that encourage the achievement of world best practice, and regulatory frameworks to facilitate beneficial reform and minimise risk. In particular, Tasman has been at the forefront of devising reform strategies and providing financial analyses of restructuring in the water and sanitation and electricity sectors in Victoria, New South Wales, Fiji, Vietnam, China, Thailand, India, Indonesia, the Philippines, Western Samoa and Cambodia. Natural monopoly segments are quickly identified, appropriate institutional structures, access rules, and pricing policies are specified and advice on implementation strategies provided.
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