Productivity – The Mantra

I’m over it.  Today both Noted Torture Apologist Tony Abbott (NTATA) and Kate Carnell invoked the productivity mantra.  I know you didn’t ask but, “What is Productivity?”

It is ridiculously simple:  It is the ratio between inputs and outputs.  Now, unless you specify, it is actually meaningless because you can have Labour Productivity:

LABOUR Productivity

Note how our labour productivity continues to grow.  This is important.

The confounding issue is Multifactor productivity.  This is essentially similar but takes into account the other items that might effect inputs like capital.  It is a much more complex formula:

~The Formula ~

Now learned Economists argue that multifactor productivity is a much better measure of an economy’s performance and who am I to say they are wrong.  It does have a couple of problems though as I pointed out here.  Not least of which is it is a trailing (or lagging) indicator.  In most circumstances it can tell you about where an economy was at a point in the past but it is terrible as an indicator of upcoming trouble.  In the example I link, Australia’s recent Multifactor productivity(MFP), the culprit is unprecedented mining investment that has not yet led to any output.  Our MFP should go gang busters once all the new mining stuff kicks in.

So which one was NTATA referring to when he said:

Yes, we must boost productivity if we’re going to pay our way in the world successfully, but penalty rates are a matter for the Fair Work Commission and people are perfectly entitled to bring applications to the Fair Work Commission to ensure that their businesses are profitable and they can continue to maximise employment.

 

I think it’s obvious that he was referring to Labour productivity because he mentions wages and penalty rates but in his previous sentence he refers to investing in infrastructure.  So the important take home is that it was gibberish.  By leaving the door open to either he can retrospectively redefine his message.  He used the mantra.

In fact he also used it as it’s clearest companion, the dog whistle.  You just replace ‘Productivity’ with ‘Profit’ and the sentence makes perfect sense and you don’t have to worry about any of that complicated guff about MFP and whatnot.

So into the temple of mannon strides:

Kate Carnell

Some of you may remember Kate from such wacky pranks as the Canberra Hospital ‘Implosion’ that killed Katie Bender.  It can be confidently stated that being the head of a peak body like the BCA, MCA and the ACCI is the business community’s equivalent of the dunce’s cap.  Kate certainly has the qualifications and the track record to boot.

She is campaigning for the removal of penalty rates on the weekend and when it was pointed out to her that the only reason nurses work on weekends is because of the better pay.  Her response?

Look, No it’s simply not the case.

Well that’s a fucking strong arguement Kate!  The fingers in the ear school of management productivity.  If you, like Kate, have a kindergarten understanding of productivty and business then cutting wages is the only way you can see to boost productivity (read profits) .  My contention would be that if you can’t sell your product at a profit then you shouldn’t be in business.

In fact the main problem with productivity in Australia is bad managers and the lack of skilled employees.  Neither of which lowering wages will alter.  I just blew my chances at getting a gig with the ACCI didn’t I.

The Tea Lady – A case study of economic rationalisation

The ATO before they gave away all their money to Rupert

Tea ladies are an anachronism, yes?  Surely they are the absolute gift example of what needs to be streamlined and thought smarter in the modern workplace?  Well so said all the pointy headed economists when the first round of rationalisations went around.  Funny thing is despite the hairy chest thumping about downsizing and right sizing, in my whole career in the Public Service I never once saw the slightest hint of evidence for the claims.  Outsourcing was better, and we needed to do better.

I was made to feel dumb

My tiny pea sized non-management brain did some quick dot joining and I figured that if a contract was to be properly managed then you would need a project manager within the organisation to, you know, manage the project.  What ever the project was, if you outsourced it you’d need to contract out to employ the project delivery resources and throw in another project manager to manage the process from the contractor’s side.  So even before the contractor took a profit (they were private enterprise, shareholders blah blah blah) there was an extra mouth to feed.

Looks like a plan!

That didn’t seem very efficient.  As a good employee I explained this to my boss.  He got very angry at me and told me to “Shut-up and do my job”.  I though he was a prick but decided I’d wait and see if the new system did good or not.  After a bunch of expensive and frustrating “teething” troubles we eventually got our project delivery back to about 90% of what it was previously.  The extra 10% was all the fancy stuff that had been provided before we outsourced.  Our internal clients were less than impressed because they liked the fancy stuff but were told it was the “new way”.  This meant it hadn’t been included in the contract to save money.

Life returned to the “new” normal and I foolishly asked how much money we were saving.  After being met with stoney silence I asked what sort of savings we could expect based on what had happened when other departments had gotten all rational economically.  Long story short, nobody ever did a validation or confirmation of the theory.  Head count was down and that was, apparently all that mattered.

Ah the good old days!

Time passed and I mused upon the first time I had witnessed the phenomena.  The ax falling on our dear old tea ladies at the Bureau of Stats back in the 80s.  Now a quick back of the envelop calculation had me think that paying a senior public servant to go and make a cup of coffee after having them obtain the ingredients couldn’t possibly compete with having Mabel trundle up to your desk and give you one.  Basic economic theory, economy of scale and what not.  I decided to do some research and maybe crunch some numbers.

Fortunately I didn’t have to, someone had done it for me!

The case study which follows of a private sector organisation demonstrates that, while getting rid of the tea lady may have initially looked like an economic gain, the direct and indirect costs of doing so were probably far greater than keeping her on the payroll.

These costs, however, are much more difficult to measure than direct employment costs, so management was able to ‘justify’ their decision, at least initially.

Lying fuckers. ” If you can’t measure it you can’t manage it”, might be manager speak but it’s someway to the truth.  If you don’t believe the actual evidence (see above) ponder me this:  How come after all the massive out sourcing and ‘right sizing’ the Federal Public Service is still, according to some, in need of trimming?  Either the process works or it doesn’t.

In fact you’d think after all the economic rationalising there’d be some easily found data about just this.  After a bunch of looking:

The only graph I found

 

 

 

Oh Really?

Expert

Meet Dean Parham.  Dean is “an expert on Australia’s productivity performance”.  Yesterday he released a paper under the auspices of the Productivity Commission that tried to explain how this:

Shows Australian workers are being rewarded appropriately for their labour.

OK I’ll be totally upfront.  I’ve read as much of the paper as I can understand and that is pretty much limited to the summary and introduction.  Perhaps if I was a trained economist the seemingly unconnected would all stand up in neat rows and make sense. That means that there is a decent chance that I’m mistaken when I say the following*:

Bullshit.

The meat of the argument appears to be that:

Labour income grew at a faster rate in the 2000s than in the 1990s through stronger growth in both wages and employment

OK.  Did Dean did you miss the bit where the measure being considered is the proportion of income share?  Oh wait apparently you did know that:

The labour income share only fell because capital income growth accelerated even more

Master of the fucking bleedingly obvious then.  Well now we’ve cleared that up:

The rise in the terms of trade meant that product prices rose faster than consumer prices. While labour received a smaller share of income at product prices, the slower growth in consumer prices meant that the real value of each dollar earned was worth more in terms of its purchasing power. This purchasing power effect (which was available to all income earners) more than outweighed the apparent reduction in labour’s share of national income.

The fuck?  It doesn’t matter about any of this because Dean, as you have kindly acknowledged, it is a proportion. At this point I started seriously questioning how I too could get called a productivity expert because that’s just fucking dumb.  But wait there’s more:

The mining boom was overwhelmingly responsible for the fall in labour share in Australia:

OK.  Now I know you are lying.

Mining did the damage?

The mining sector employs almost nobody.  For it to have bent the aggregate data that out of shape miners would have to be on eight or nine figure incomes.  All of them.  Even the ones on 457 visas.  To be fair Dean attempts to explain this away by citing the flow on effects to other sectors, but even by dragging in the whole of the construction sector (yeah right) and the manufacturing sector (lol) it can’t make the thing fly.

Further aggravating the situation is that apparently we just had a productivity crisis where changes to the IR settings were being demanded to address declining productivity.  You can’t have it both ways.  The Multifactor productivity decline was, as far as I can tell, where the capital input side of things was causing problems.

Here’s the capital.

I’m starting to feel like this report is a smoke grenade thrown into a hall of mirrors.

I think we’ve found the problem!

So, in ‘opposites’ world, capital productivity declines while labour productivity grows and the share that labour has of income in the overall pie declines?  I can see why you needed a complicated report to explain that away.  And there was some ‘splainin’ to be done.

FUCK YOU GOT MINE!

Not only is the gap between rich and poor increasing, didn’t we just have a massive productivity crisis?  Where did it suddenly go?  How can the Productivity Commission now stand in the vanguard of a call for Industrial reforms to boost productivity while simultaneously contending that labour shouldn’t be rewarded for increases in labour productivity?

This report is your answer.

* I’m serious.  If you can explain to me why I’m wrong I’ll publish a full retraction including the reasons.  I’ve done this before.

Jennifer Westacott hates you.

Getting serious about greed.

Didn’t I just do a piece on why the GST should probably go altogether?  Why Yes, Yes I did! With the hand over to the party of FYGM (Fuck You Got Mine)  I knew it wouldn’t be long before the slime would start oozing out from the cracks in the corporate sector.

I haven’t taken the long handle to Jennifer Westacott before but when you bobble up on the front page of the Arsetralian crying out about an OECD report that claims Australia is in desperate need of being more like Europe then I start loading the shotgun.  Let me get the feminism angle out in the open completely up front.  I’m a bloke.  I think it is great that Jennifer is the CEO of a prominent business advocacy group.

Unfortunately the BCA is a rabid bunch of greedy fuckers who would lease their mothers out as bridge planks in a heart beat.  Jennifer has never let the facts inhibit her advocacy for policies that are designed to increase the disparity between the wealthy and the peasant classes.  More telling the OECD recommend narrowing the gap between the wealthy and the poor, encourage tighter regulation as well as targeted investment in renewable energy and carbon pricing.

If you are going to cite the OECD as an organisation to pay attention to maybe you should, pay attention to them yourself?  How do I know all this about the OECD?  Well I went looking for the OECD’s document that tells us we need a GST badly.  The nearest I can find is a report that they released in 2012 that I have already covered in this very blog.

Rather than it being a burning issue that was making us a basket case it is a consideration that was mentioned largely in relation to our consumption tax being relatively low.  Why isn’t Jennifer advocating for the other measures listed in the dot points above the last one?

I can answer that!  It’s because none of the other issues would line her members pockets and empty yours.  Can someone please tell me why a broader tax base is better?  Remember this graph?

That’s what our GST revenue did as a result of the GFC.  Rather than bouy up or balance out a reduction in revenue from other taxes it also dipped massively.  As I have repeatedly stated I’m no economist but I can read simple graphs.  I’m sorry Jenny I’m calling Bullshit.  Here’s what the ABS say about the numbers:

Always go to the ABS.

So a quick score card.  The Arsetralian says that Jennifer says that the OECD said

At its peak before the crisis, company tax was delivering 17.8 per cent of government revenue compared with an OECD average of 11.3 per cent, but this had fallen to 14.6 per cent.

The ABS says 21 % pre GFC falling to 18 %.  Lets assume that there has been some differences in what is defined as corporate tax, round up some of the stupid decimals and, cherry picking the best to worst, then you can find a 3% reduction.  Interestingly however, right when it mattered the most it actually rose 2%.  This is in contrast to the GST take which has remained flat at ~ 13%.  This means that combined, and not accounting for the super investment tax take, individuals pay around or just over 50% of the entire tax revenue.

Those are the taxes that go towards paying for all of the regulation, infrastructure and business subsidies that the OECD actually do strongly recommend.  But this is the BCA and Jennifer Westacott talking.  Her and her cronies actually believe things like this gem culled from Judith Sloane at, where else, the Arsetralian:

We should also recall that the top quarter of income tax earners in Australia already pay nearly two-thirds of all income tax revenue. The bottom quarter pay no tax, in net terms.

Jennifer Westacott hates you because you might still have some money in your pocket that she doesn’t.  Must be time to hand it over.

Black is White

Well it took a week but productivity Lilliput Josh Frydenberg was given free range in an opinion piece in the Arsetralian today.

~~~ PIG FARMER! ~~~

My only surprise was his focus.  Rather than attempting to resurrect the ashen corpse of Industrial Relations policy, it is deregulation that is blowing up Josh’s Skirts.

Not to mention the positive impacts on business that will flow from the abolition of the carbon tax with its 19 separate acts and 1100 pages of legislation, and the mining tax with its 11 separate acts and 525 pages of legislation.

The cabinet, parliament and the bureaucracy will all be galvanised around the deregulation process. Ministers will be required to include regulatory impact statements in their submissions as well as establishing their own ministerial advisory committees from which they will seek recommendations on cutting red and green tape.

Earlier on in his ill thought bowel squirt Josh fingered our declining multifactor productivity growth as being a sign that Labor had squibbed the whole thing and cited the BCA and the MCA as being scathing in their assessment of the previous government’s performance.  Those would be the same chumps that don’t even measure their own productivity and triplicate the same infrastructure for no good reason.

Where is the linkage between deregulation and improved economic performance?  It’s not like the GFC happened long enough ago that we can have easily forgotten how deregulated finance markets crashed the whole world’s economy.  That’s just the economy.  Here we are talking about our environment.  Economic forces would suggest that ripping the whole thing up and throwing it in the general direction of China is our only way forward.

Forward to where?  David Suzuki is about to give a speech on this very topic.  I’m sure the speech will be really entertaining and worth hearing, none the less he has already said the important bit:

the world’s obsession with an unsustainable and flawed economic model is suicidal.

Hey lets build a boat and make mad bank!

I find it really hard to not get emotional when I think about what is actually at stake here.  That (above) is a picture of part of Easter Island.  The caption is a mocking of the ‘it will go on forever’ model.  I often wonder what went through the heads of the Easter Islanders as they were cutting down the last tree.  This is relevant because when we talk about the environment and regulation we are talking about what we leave for our children.

Deregulation will amount to intergenerational theft.  To also attempt to gag consumer advocacy in pursuing environmental goals just adds to the insanity and obvious shitheadedness of this (I’d link the articles but The Arsetralian web site appears to be down at the moment.  Maybe they are still on copper).

CONSERVATION groups seeking boycotts of products linked to alleged poor environmental practices may soon be liable for prosecution under consumer law.

The move, which could severely hamper market-based campaigns by groups such as Markets for Change and GetUp!, is to be pursued by the Abbott government.

I don’t need to remind readers that the whole productivity ‘crisis’ is a result of the mining sector overheating anyway do I?  Read the rest of my blog if you need to know why.  More importantly all the sensible research has identified private sector management as being the area where the most dramatic improvements could be made.  This should surprise nobody once you realise that the clowns with ties at the top don’t actually measure the things that they like to whine about the most.

I’m waiting for my full exclusion suit to arrive.  It can’t come too soon.  The stench of the first week of this government’s press releases is starting to make me dizzy.  Unfortunately those aren’t the emissions we should really be worried about.

Fear the Reaper

Its telling indeed that when the head of the Productivity Commission appears on the Front page of the Arsetralian I find myself being broadly in agreement.

It seems our new master has so frightened the delicate little flowers at the Productivity Commission that they are actually urging caution be used in the manipulation of the fiscal and regulatory levers.  Read that sentence over a few times until the reality of that sets in.

Popeye the sailor man?

I’d like to think that if this blog has any bias it is towards the factual over the mythological.  This does however set me almost immediately at odds with the more extreme of the laissez-faire economists.  They all seem to come from the Right and this makes me look, by opposing them, immediately Left leaning.  If a Prime Minister from the Left were to be so rash in the first week of their administration as to vigorously upset Indonesia and set about spitefully axing senior public servants I’d probably feel the need to mention it here too.

That is only by way of explaining why this post has immediately appeared to sink into petty partisan politics.  It is the background before which I now stand actually agreeing with Peter Harris.  The immediate headline from the Arsetralian “Productivity key to growth” is slightly problematic but I digress.

Is he holding a book? Fucking ivory tower pointy head.

What could possibly lead a normally slavering bullshit shrieking economist such as Peter to utter heresies like:

“Today’s economic discussion is instead dominated by debt and deficit.”

And to eschew sticking the boot into unions and ask that Government take a sensible approach:

“Instead of piecemeal, ad-hoc change driven by occasional crisis, we might recommit in this country to regular reform statements, formally delivered once a term.”

Maybe he suspects that facts no longer matter in the new Canberra.  The long fought for disability reforms may be the first shedding of rationality to impact the Productivity Commission directly but I was a Canberra insider long enough to smell the fear.  Peter almost praised the unions by name!

“Thus my advocacy is for the return of a national economic reform statement, equivalent to those developed in the late 1980s and 1990s, where the process and the authority come in a single package.”

It was at this point that I nearly lapsed into gales of laughter.  It was the reality that has so shaken Peter that made me suspect hebephrenia was the actual cause.

If you voted for him hang your head in shame.

The common charge of being ideologically driven is usually made of the progressive Left.  Why else would you change anything?  This is of course just part of an ongoing verballing.  The real ideologues are the neo-cons.  You could almost hear the shouts of joy from the BCA and the other usual suspects when their team took over the tuck shop. They were in absolutely no doubt as to what ideology was about to be force feed to the nation.

“And he can see no reason
‘Cause there are no reasons
What reason do you need to be shown?”

It won’t be “economic rationalism”.  There is no need to be rational when you already know all the right answers.  I guess we are reasonably fortunate that there isn’t much Public infrastructure left to sell, but maybe that’s the fear and panic talking.

Keep an eye out for the likely fate of Peter’s competition – The Australian Workforce and Productivity Agency.  I suppose it doesn’t really matter whether they live or die now, like the Productivity Commission they only provide advice.  The new manistry is however not currently taking any.  From anybody.

The Heart of Darkness

While reviewing what to tag my posts with I have become aware that I haven’t really given one of the key players much scrutiny.  So here is “The Productivity Commission, failed venture in search of relevance”.

We’ve all heard of The Productivity Commission.  It was formed in 1998 out of the amalgamation of three separate bodies by the Howard Government.  Nothing signals the absolute and abject failure of an enterprise more spectacularly than it’s duplication.  Behold! The Australian Workplace and Productivity Agency.  This was formed in 2008.  It took just a decade for the bunch of fat fingered economists at the Productivity Commission to fuck up so monumentally that they have been abolished by duplication.  From the AWPA’s charter statement:

• provides independent advice on sectoral and regional skills needs to support workforce planning and productivity, including in small business
• promotes workforce productivity by leading initiatives for the improvement of productivity, management, innovation and skills utilisation within Australian workplaces.

So apart from meeting some obscure regulatory requirements due to treaty obligations just what has happened to the once proud flag ship of Australian productivity?

Founding Productivity Commissioner Gary Banks

Even for a lying economist Gary was particularly rabid.  His contempt for unions knew no bounds and it was him more than any other force in Australian political life that cemented the “Australian Productivity Crisis” into the national psyche.  If you can stomach it here is a sample (From, where else, the Australian).  It was with good reason I declared these guys the Institute of Public Affairs in residence.

Little surprise then with the incoming Labor government that the increasingly shrill and intractable to reason Productivity Commission was fast tracked to nowhere by a new ‘independent’ agency that actually thought consulting with unions might be worth a try.

Why haven’t you even heard of the AWPA?  Who the fuck knows.  The retail sector has been in the news quite a bit.  I even did a piece on Paul McClintock on this very blog.  Strange then that the July AWPA report – Retail workforce issues should have received no coverage in the press what-so-ever. Is it because what they say isn’t relevant..

Management and leadership is a particular concern for the industry. Managers are typically employed without a formal qualification and promoted internally with minimal development. There is evidence that this has created significant skills deficits among managers, for example in basic financial management, people management and strategic thinking. While there are some retail-specific management programs, they are generally not well-subscribed. Some look for solutions in stronger professional qualifications while others believe a generalist business degree is more valuable.

Oh fuck look!  The problem is managers are drooling cretins more likely to be promoted based on their possession of a penis than any actual useful skill.  When asked how to fix it industry leaders squabble about whether having an MBA or a BE is the answer(They all know in their heart of hearts that Sydney Grammar is the only acceptable real answer).

Why care?  Well turns out that the Retail Sector is 10% of our workforce.  It is the second biggest employment sector only behind Health care and social assistance.

Looking at that I can see some reason to be talking about manufacturing (if the reason to talk is employment related) but mining?  More to the point.  The retail sector is perhaps more than any other in crisis as online sales continue to penetrate the consumer landscape.

So what do the Productivity Commission have to say about the Retail Sector? Import of Processed Tomato Products. And in a way that’s a good thing.  These guys are actually (as far as productivity talk goes) the font of all bullshit.  They started the whole productivity is declining (whoops we meant productivity growth) saga.  So sad to see any actual relevance they might have once had disappear…

Many reader’s may wonder why the BCA’s 190 page report into Australia’s productivity hasn’t gotten hammered here yet.  Well I read the fucker and it is entirely too low hanging fruit which others have already plucked.  But what you really needed to know about it is:

Used without permission I guess.

To GST or not to GST? That should be the question.

Readers who know me from another forum will perhaps not be surprised when I admit that I got so angry I was shouting at the radio this morning.  Ray Hadley?  Alan Jones?  What the hell are you listening to 2BG for anyway?  Nope it was Yasser El-Ansary General Manager, Institute of Chartered Accountants Australia.  And it was Radio National Breakfast.

Yasser El-Ansary – If it looks like an Economist and talks like an Economist.

Clearly the GST is electoral poison. It was excluded from the Henry tax review for this very reason.  If it had been included.  I’m guessing that Henry would have recommended a phased increase in both amount and scope.  Why?  Well perhaps Yasser got this right when he said,

It would raise more money.

And when I said right, I mean what the fuck?  So would any number of other measures.  It was as Yasser banged on about it that I became frustrated because Fran Kelly wasn’t asking any of the obvious questions.  Eventually discussion moved on to the company tax and the coalition’s plan to reduce it.  At this point, being forced to address why reducing a source of revenue could be a good thing he returned to the favoured hidey hole of economists everywhere and claimed that we needed to look at the macroeconomic picture.

Done looking at it?  Well it seems that reducing the company tax rate will stimulate business and a rising tide lifts all boats.  I paraphrase but that’s the sell.

Ok how about we cut the GST out all together?  It is the one tax measure that would be universally heralded as reducing the impost on business of government regulation (mention a BAS statement to any business owner if you like listening to pitiful whining and/or angry swearing).  So it’s good for business.  It also means that everyone can afford 10% more of everything.  That’s an economic stimulus that would make the ALP GFC stimulus package look pretty tired.  That sounds like it would be good for business and ‘a rising tide lifts all boats’.

The down side is that we would be out about  50 Billion a year in revenue.  We would have to pick that up from direct taxation like company taxes and income taxes.  Or possibly via mining super profit taxes and Banking sector super profit taxes.  In some ways it would make sense to stop subsidising dumb shit like:

• The diesel fuel rebate. That’s 5 billion a year if it was abolished and 2 billion if it was only the miners who lost it.
• Superannuation Tax concessions.  There’s 32 billion (and rising).
• Negative Gearing.  There’s another 5 billion.
• Closing known Tax law loop holes like family trusts.  Nobody knows exactly how much extra  it would raise but it’s a no brainer.

You will note that it is still a few Billion short and there are some arguments about all of them that would probably mean a little less than the maximum would be achievable.  What is more note worthy is that the majority of these target the ‘haves’ in our society.

Which really raises the question.  How is it that in a well educated egalitarian democracy we continue to vote for measures that redistribute the wealth disproportionately to the wealthy?  At least we seem adverse to voting for a GST.

If someone could give me the short version of why a broader tax base is fundamentally better than a well targeted one I’d be grateful.  I feel like I have somehow completely missed the point.

Due to the usual growth factors inherent in an economy yes GST does rise in general but see that flat bit at ~ 2008?  That would be the effect of the GFC on consumer confidence.  Heard any properly good news about retail sales lately?

I know your eyes glazed over six hundred odd words ago but as far as bullshit goes the GST is one of the biggest lies ever sold by lying economists.

The PM’s Productivity Pact.

Upon regaining the crown K. Rudd announced a focus on our productivity.  This week he had his first meeting with ‘key stakeholders’,  The BCA and the ACTU.  Perhaps this is a hark back to the radically successful accord of the Hawke/Keating era but in the current environment it is basically impossible to see where the unions come in.

THERE IS NOT AN INDUSTRIAL RELATIONS ISSUE CONFRONTING AUSTRALIA THAT AFFECTS PRODUCTIVTY

I’d make that hot pink and flashing if I could.  In fact one of the most unproductive things in Australia is talking about Industrial settings and productivity.  Rather than go over old ground I’m going to leave this as a ‘based on previously demonstrated knowledge’ claim.

Stake holder one

So the spokes person for one of the key stakeholders, the one who should have been most confused as to his presence,  Dave Oliver from the ACTU, said (I paraphrase).

They identified core areas:

* Infrastructure bottlenecks

* Skills & Vocational Training

He then went on to remark that if we wanted to get serious about productivity managers would need to adjust their approach citing a recent survey by the manufacturing sector unions (the ones most under threat currently) that found nobody was asking their workforce about how to improve productivity.  He cited two reports that had identified Management Capability and Management Systems as the key factors in improving productivity in Australia.  They were, the Carbon report from 20 years ago and more recently, Ray Green’s Mackell Institute’s, report (previously linked in earlier blog posts).  Both concluded exactly the same thing.  Management aren’t doing what they need to do to fix things.

The unions must be as bemused as me as to why we are involved.  This becomes totally bafflement when it turns out that we are the ones who can cite reports, read graphs, understand big  flashing hot pink  writing and generally steer the debate in worthwhile directions.

Fair enough that’s one side

The other ‘key stakeholder’ was Tony Shepard from the Business Council of Australia.  I have previously done a minor hatchet job on both Tony and the BCA so fair warning.  What does Anthony (B.Com) have to say post meeting?

“As we have said all along, what we are looking for is decisive, real action on the ground that will genuinely address the challenges we face, not joint statements and superficial agreements.”

Me too Tony.  It’s about time you and your mates realised YOU are the fucking problem and actually did something about it.  I accidentally coincidentally agree with the need to have more stakeholders and have already questioned what the unions are doing involved at all.  I think my reasons are way more compelling than yours though Tony.

“Australia has come a long way from the 1980s and there are many more stakeholders involved in the productivity and competitiveness picture than just unions, who don’t have the influence or the coverage of the workforce that they once had,”

Nice sideswipe there Antony.

So to sum up, a score (clues had):

• Side A (Unions – rep D. Oliver ACTU) – Several
• Side B (Business – rep A. Shepard BCA) – Zero

And if that wasn’t confusing enough. This is all about ‘Australia’s declining productivity performance’.  Here’s the quick and dirty.  Like league tables?  Globally:

2005 – 15th

2013 – 12th

Clearly slipping.

WARNING these graphs are PRODUCTIVITY GROWTH.

And this is all the while being supported by the mining sector:

(Source -GDP per capita and labour utilisation in Australia)  Oh wait that can’t be right!

And compared to other developed economies:

(Source – www.conference-board.com)

Clearly a pig performer:

(Source – http://www.abc.net.au/unleashed/3887922.html).

The truth is out there!  Just be careful where you tread while you search for it.

Liar! Liar! Pants on Fire!

A continuation of my pieces on notable public figures who want to be heard on Productivity.   I was listening to Radio National breakfast when Scott Morrison was interviewed about Kevin Rudd and boat arrivals.  It was the usual stuff but at the sign off he was billed as the Shadow Minister for Immigration & Citizenship, Productivity and Population.  The fuck you say.  Meet Scott

Facing out to the East I donned a steamer and then a heavy diving suit and helmet, not to frolic in the surf off Cronulla (Scott’s electorate of Cook includes the Shire) but as some protection from the enormous waves of complete bullshit on productivity I suspected I was about to be drowning in.   Enough hyperbola let’s look at the record (7/8/2011).

SCOTT MORRISON: Well I think on productivity across a whole range of areas there is a need for actual policy rather than the rhetoric we’ve seen from the Government for the last few years.

I mean labour productivity has halved. I mean it is half what it was just a few years ago.

Bonus point for being vague but he straight said labour productivity didn’t he? (He did)

Halved you say?

Don’t panic!  Before you call the fire brigade to extinguish his trousers maybe the retail sector (arguably the context of his comment) was a special case,

The table lists productivity  growth, not productivity but even so.  You can see that retail has been trending very closely to the combined market sector (The graph above) with significant growth “over the last two decades”.  Specific to retail there has been a decline in the last cycle listed.  That is a decline in growth.  It still grew.  More over it has since grown more strongly.  Maybe there is another boogieman dogging retail?

Wonder how Scott missed that one?  It was probably because it has nothing to do with the thing he wants to focus on:

SCOTT MORRISON: Well I think addressing labour productivity is a critical issue.

I mean we can’t have, what I want to see is real wage increases based on productivity improvements. And we’re not seeing that at the moment. Basically we’ve got wages driven by Dutch auctions and a strike first, talk later approach that is really becoming embedded in the workplace.

We want to see I think an agenda driven by productivity in the workplace. And I don’t think the Government’s arrangements are providing that environment. And I think that may be what the review of the Fair Work Act to date may produce.

The fuck you say?

Behold the industrial chaos that has been unleashed by the Fair Work Act 2009.  That looks like a really “embedded” problem.  A problem embedded at less than half the level under JWH’s work choices.  Does anyone smell smoke?

One thing Scott said was kinda true.  It would be great if there were ” real wage increases based on productivity improvements”.  It clearly isn’t what we have now.  Guess you better hit redial and get the brigade here pronto.

How did Scott fuck up so badly?

I mean if it was Joe Hockey there could reasonably be some doubt about his credentials but Scott Morrison has a Bachelor in Applied Science in Economics and Geography.  That means that we aren’t in some realm of honest error.  We are talking knowingly told fibs.  That’s considerably worse.

At some point one of my three readers has to ask themselves how are they getting away with this shit?  Barrie Cassidy (ABC insiders) let all of that effluent fly out of the speakers of your radio and didn’t blink.  You can’t look at a graph of labour productivity for more than a couple of seconds and not go “Hang on sport!”.  I expect politicians to lie and disseminate but aren’t the fourth estate supposed to be all over it?

They seem more focused on other reasons Scott Morrison is a jerk, and maybe that’s fair enough.