Government by text message.

Three decisions in Canberra last week demonstrated why productivity in Australia has been going backwards for more than a decade. It's essentially government by special-interest, meaning there's no real conviction; politicians are so afraid of upsetting anyone who might vote or donate to them that every policy, regardless of whether it's good or bad, ends up with more carve-outs than Swiss cheese.

The first decision followed the continued fallout of the RBA's ban on card surcharges, which regular readers will be familiar with. It turns out the Albanese government didn't decide to provide the ATO with the funds needed to continue accepting credit card payments because of an omission. No, it was a text message from Andrew McKellar, chief executive of the Australian Chamber of Commerce and Industry directly to the Prime Minister that triggered the response. Here's Albo boasting about the "trust" between himself and a leading lobbyist:

"Andrew did text me last Thursday morning, and by Friday morning we had an announcement. That was an example of a relationship that takes time to develop. That trust, where you can have a discussion and say, 'It is in hand, I agree with what you are saying and I will get it done'."

And just like that, taxpayers were saddled with another $200 million, with the around 5% of small businesses who use credit cards to pay their tax essentially getting a taxpayer-funded line of credit.

To be clear, I'm no fan of the Albanese government's credit card "reform". But if you're the Prime Minister and you do believe it's good policy, then defend it!

But that discipline is clearly not present in the upper echelons of the Albanese government. No sooner had Albo announced how painfully easy it is for special-interest groups to lobby him into changing policy did his Treasurer, Jim Chalmers, go to pains to declare that it was actually his idea too:

"If you just let me set it out for you, [the] Prime Minister and I were in discussions on Wednesday of last week. He had a view and I agree with it, that we needed to step in to provide this longer transition period to allow the ATO the time to get it right. We had the same view."

Right. Chalmers told Parliament he learned about the ATO's preference in late September; the Assistant Treasurer on Sunday said the two of them were negotiating a transition in July. Now Chalmers is claiming he was discussing it last week. Not all of that can be true, but it doesn't matter: the issue is that they did precisely nothing about it until a lobbyist's text message moved them, which is the special-interest mechanism in action.

And it's not like the opposition Liberal Party is any better. Leader Angus Taylor was quick to demand that Chalmers be sacked over the humiliation, while also supporting the ATO carve-out. Not a single politician defended the $200 million that taxpayers will now be slugged each year, a sum that will inevitably grow because of the recent publicity.

If this was in isolation, maybe it wouldn't be so bad. But in a single week Australia also had two more examples of concentrated interests trumping taxpayers: a bill that would have wound back the private health insurance (PHI) rebate for over-65s blocked in the Senate, and an announcement that the Clean Energy Finance Corporation (CEFC) was going to jump back into the energy space to ensure "the construction of stalled wind farm projects".

Regardless of what you think about PHI rebates, there's no good reason to carve out a larger subsidy for a specific cohort based on age, especially when that cohort includes part-pensioner couples who can have assets of up to $1,121,000 (excluding their home) and incomes nearly double the national personal median income. If private cover is worth supporting to relieve public hospitals, a flat concession for anyone who opts in would do that job without an age test.

Countries like France, where over-65s now have higher average incomes than the working-age population, are going through debt crises right now precisely because they can't wind back excessive promises made to the elderly. If Australia can't remove a relatively small but inefficient subsidy to mostly well-to-do elderly, what chance does it have to avoid a similar fate as the population ages?

Then there's the CEFC. Again, maybe you like wind farms. But at what point do you stop and say, given that costs have jumped by 50% since 2020, maybe we should press pause on this little adventure? Private investors have clearly run the numbers and declined, so in steps what's essentially a state-owned bank to say yes instead. The CEFC sits off budget, so its "investments" are invisible to voters. It counts $105 billion of projects it has "catalysed", which is another way of saying investors will build anything when someone else absorbs all of the risk and guarantees returns.

A subsidy here, a bailout there. Keep it up and before too long the only investments you'll have are those being underwritten by taxpayers.

Maybe you like taxpayer-funded card payments, private health rebates, and uneconomic wind farms. My point is the productivity-crushing mechanism by which all are being achieved: concentrated special-interest groups move policy, the costs land on everyone, and every lobbyist takes notes for the next time.

Do it once and it's a rounding error into a trillion-dollar economy; run the loop a few thousand times and eventually you end up with Australia's productivity numbers.