Productivity and the Pathway to Success

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

The Changing Industrial Relations Landscape in Australia

The following is a presentation given to the 2013 HR Nicholls Society Annual Conference:

I’d like to take you on a brief journey as we sit as passengers on the bus the Government have put us in.  As we drive through the changing IR Landscape in Australia, peering out through the window with no control over which roads we take, which direction we head or how fast or slow we hit those bumps along the way.  This is how things have looked for businesses and practitioners over the last few years!

There have been many changes to the Australian Industrial Relations system since Kevin Rudd was elected as Prime Minister in 2007.

Firstly the Workplace Relations Act was replaced with the Fair Work Act (‘FWA’).

It took some time for a number of the changes to be tested and for their true impact to be realised.  Unfortunately for the Australian Economy, the impact on business, on jobs, and on productivity, have indeed been realised. Read more