In yesterday’s Press Club address Prime Minister Rudd rightly argues for policies that lift productivity and improve Australia’s international competitiveness. The address, text attached, contains numerous assertions about what is needed to attain such objectives. But Rudd fails to explain why previous Labor policies did not achieve them and he is short on detail about the policies which Labor will now be able to adopt successfully.
It is, for example, easy to assert that we need “a new approach to the regulatory impost on business from all levels of government”. But how then to now achieve the “one single integrated assessment system” Labor failed to reach? Rudd has apparently discussed (!) this with NSW Premier O’Farrell – but how to get agreement with State and Local governments on a matter that has long been disputed in our federation and in regard to which the Commonwealth itself under Labor has failed miserably, particularly in regard to environment decisions. In short, as Labor has tried and failed already, including under Rudd Part 1, how might it now succeed?Rudd acknowledged that labour productivity has been lower than in the 1990s but failed to explain why it grew at a much slower rate under Labor than it did during the 11 years the Coalition was in office. Indeed looking at the more comprehensive measure – multi-factor productivity – we find that the latest published measure is actually lower than it was before the Fair Work Act came into effect.
Yet Rudd seriously suggests that the Fair Work Act “represents a reasonable balance for the future” and defends this by pursuing the line that “bad industrial outcomes … can be the result of bad management decisions”.
This is a line also adopted by some industrial relations consultants who fail to understand the problems facing management under a regulatory system that favours unions and has regulators who wrongly believe that there is an imbalance of bargaining power between labour and capital which must be corrected by imposing what they consider a “fair” result. Of course, Rudd has an advantage here that he should not have been allowed to have viz the failure of the Coalition to identify and criticise the operation of the Fair Work system (sic) and its policy of continuing most of that system if elected.
Rudd also makes much of Australia’s faster growth than in most other countries during Labor’s period in office (see first graph in attachment). But he does not acknowledge the enormous contribution of Chinese purchases of Australian raw materials. Nor does he acknowledge the poor policies pursued by the countries with whom he compares Australia. Given the benefits from China, Australian growth should have been much higher than the average longer term rate it actually reached under Labor.
Des Moore is the Director of the Institute of Private Enterprise, and a member of the HR Nicholls Society Board of Management