The Government’s 2025 ‘productivity’ taskforce led by Don Brash will almost certainly come up with all the same old failed ideas that got us here in the first place. Expect a variation on the following themes:
The thing is, Brash’s predictable prescriptions, that we should make ourselves a lean, mean, soulless machine dedicated to growth without regard to who benefits, ignores the fact that Australia got ahead of us by not following that path.
We fell behind because we slashed labour costs. As Idiot/Savant notes:
The decision on whether to invest in productivity improvements is determined by the relative costs of capital and labour. Employers will only invest in productivity improvements if the resulting increase in output is cheaper than hiring more warm bodies. And in 1991 – when the gap opened up – the government drove the price of labour down significantly by passing the Employment Contracts Act. So, a centrepiece of the Revolution has caused our current problem.
If we want to catch Australia, shouldn’t we be doing what they did while we were busy shooting ourselves in the foot with the Right’s economic experiments? Shouldn’t we be investing in training like the Aussies? Shouldn’t we be giving better access to benefits for those who lose their jobs (99% of the unemployed get the dole there, 32% here) Shouldn’t we have stronger unions and an awards system like the Aussies? Why would we think privatisation is a solution when the last time we privatised the Aussies didn’t and they left us in the dust?