Sunday 13 September 2009

Is Turnbull concerned about Australia's productivity or his own support base?


This is Leader of the Opposition Malcolm Turnbull at the end of this week's media cycle in The Australian:

MALCOLM Turnbull is open to reintroducing individual workplace contracts, insisting that Kevin Rudd's "inflexible" industrial relations laws have reduced national productivity.....
"By reducing flexibility in the workplace they have put, we would say, real constraints on productivity growth," Mr Turnbull said. "We believe that flexibility in the workplace is of enormous importance."

Real constraints on productivity growth looks rather impressive at first glance.
Except.........................................................












Click on images to enlarge

Now I recall that the Work Choices regime was introduced about March 2006 and continued through beyond the November 2007 federal election until July this year. Although certain arrangements made under its provisons will not expire until 2010-14.

Looking at the graphs it seems that a) Australia had enjoyed a steady historical rise in productivity prior to the introduction of the Howard Government's Work Choices (heavily reliant on the idea of individual employment contracts) and b) experienced no high productivity surge after Work Choices began and productivity actually levelled off in 2006-07, with the last growth peak occurring back in 2003-04 and the highest average increase in multifactor productivity recorded between 1993-99.


Once more Malcolm Turnbull appears to have put his mouth in motion before he considered known facts as he courts the Liberal Party heartland.

Indeed he offers no proof that the Rudd Government's industrial relations policy is having a marked negative effect or is likely to have such a negative effect on national productivity.

First graph from Australian Bureau of Statistics, Australian System of National Accounts, 2006-07
Second graph from the Commonwealth Treasury, Economic Roundup Winter 2007

No comments: