My letter in Saturday’s Australian (below) contains, naturally, only a limited coverage of developments under Labor in productivity and labour costs. Although these developments reflect various influences, there is an important question as to why they did not perform better in circumstances where Labor has continually boasted about the growth in the economy being in line with trend of 3-3.5% per annum and economic growth also being much better than in most other countries. The following might be added.
>The graphs attached to Rudd’s address to the Press Club show the changes in economic growth in selected other countries compared with Australia under Labor since the December quarter 2007. The comparison is not on a per head basis. I have not done the per head calculation but it would probably deflate the aggregate comparison favouring Australia by 4-5 percentage points. The graphs also show one year comparisons of budget balances and net debt (including on a per head basis) but no data on employment growth or increases in labour costs.
>During the 11 years the Coalition was in office labour productivity grew at an annual rate of about 2 per cent, much faster than under Labor.
>Labor has frequently boasted about the 900,000 jobs created (sic) during its period in office (recently this seems to have been increased to 1,000,000). But the rate of growth in employment has averaged much less than under the Coalition – 1.6 per cent per year (now down to 1.3%) compared with 2.7 per cent per year over a similar period of time.
> Under Labor the unemployment rate has increased by 1.8 percentage points. Under the Coalition it fell over a similar period of time by 1.2 percentage points.
>Prima facie the diminishing growth rate in employment, and increase in unemployment, in circumstances where the economy has grown at trend confirms a faulty regulatory system. Indeed, one could equate the diminishing employment growth with the increasing regulatory growth. Read more