The government’s new mantra, “Jobs and Growth”, is an admirable goal but they show no sign of a plan for anything more than short term sugar hits.
In order to improve productivity, the government is following the conventional neoclassical route of deregulation, privatisation and increased competition. Whilst this may provide a quick boost, it does little to provide gains in the long run. Similar reforms implemented in the past resulted in high productivity levels that were short term and not sustained.
Rather than spending cuts, we need targeted investment by our government in long term productivity enhancers.
Warren Truss boasts about this government’s investment in infrastructure as he reannounces roads again and again and flies all around the country, shovel in hand, but these are the people who canned FttP NBN and the High Speed Rail Advisory Group – two projects which would provide many ongoing jobs and huge potential productivity gains.
HSR linking Melbourne, Canberra, Sydney and Brisbane, with the preferred alignment including four capital city stations, four city-peripheral stations, and stations at the Gold Coast, Casino, Grafton, Coffs Harbour, Port Macquarie, Taree, Newcastle, the Central Coast, Southern Highlands, Wagga Wagga, Albury-Wodonga and Shepparton, would reduce congestion and free up existing rail, road and air routes for freight. It would allow for decentralisation and provide a boost for regional areas. It would help with housing affordability and businesses could relocate to cheaper premises. It would also reduce carbon emissions.
The opportunities provided by FttP NBN have been widely discussed and the future applications can only be imagined, instead of which, we are lumbered with an expensive white elephant that is already proving inadequate before it is even available to the majority of us. What should have been seen as a critical tool in the overall transformation that is happening worldwide (Malcolm’s digital disruption), has been sacrificed to the surplus disciples (with encouragement from a certain media mogul who doesn’t like competition).
Malcolm Turnbull talks a great deal about innovation as his government slashes funding to research bodies. Data has indicated that a 1% increase in R&D expenditure led to a 0.11% long-run improvement in Australia’s productivity. Turnbull’s plan is to encourage entrepreneurs and to protect investors whilst defunding the people who make the discoveries. Restricting research to areas with commercial potential ignores the importance of protecting us from dangers such as climate change, threats to our water supply, or social disunity.
Most importantly, strong productivity growth relies on a healthy, skilled workforce. Investing in health and education is crucial in providing a highly qualified workforce, dynamic in its ability to adapt to changing market condition and future challenges.
From the outset, this government has attacked health and education – preventative health initiatives have been defunded, primary health care is to cost more, hospital and school funding has been slashed, vocational education privatised, and university fee deregulation sought. These moves are hugely counterproductive in the long run.
It has also been shown that good union-management co-operation improves productivity but this government seems determined to do everything in its power to destroy that by demonising unions and undermining their power to act as a representative of the workers.
Lenore Taylor suggests that “for good reason [the Coalition] is at almost unbackable odds to win this year’s election.” For the life of me, I cannot see why.
