LABOR PRODUCTIVITY – AUSTRALIA

Public service growth hurting the economy

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Original article by Adam Creighton
The Australian – Page: 2 : 26-Jun-19

The Commonwealth Bank of Australia has released a report which shows that the public sector accounted for 85 per cent of jobs that were created in the year to May 2019. CBA economist Gareth Aird notes that a rise in public sector employment tends to result in a short-term increase in demand in the economy, but it does little to boost productivity. Aird adds that the non-productive nature of most public sector work is a key reason why GDP growth is slowing while jobs growth is strong.

CORPORATES
COMMONWEALTH BANK OF AUSTRALIA – ASX CBA, AUSTRALIAN BUREAU OF STATISTICS, RESERVE BANK OF AUSTRALIA

Weaker unions not the problem

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Original article by David Marin-Guzman
The Australian Financial Review – Page: 8 : 20-Mar-19

University of Sydney economist Stephen Kirchner contends that Australia’s low level of wages growth is not linked to the decline in union membership. In a paper that has been published by the US Studies Centre, Kirchner also disputes the ACTU’s claim that wages growth is no longer linked to productivity increases. Kirchner adds that the rise in house prices has been the major contributor to the decline in labour’s share of income over the long-term.

CORPORATES
UNIVERSITY OF SYDNEY. UNITED STATES STUDIES CENTRE, ACTU, CENTRE FOR FUTURE WORK

Finance riddled with rent seekers

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Original article by Adam Creighton
The Australian – Page: 2 : 7-Nov-18

Productivity Commission chairman Michael Brennan says much of the Australian banking and wealth management industry’s revenue can be attributed to excessive fees that are a result of limited competition. Financial services is now the biggest sector of the domestic economy; it accounts for nearly nine per cent of economic output, compared with around four per cent in the early 1980s. Meanwhile, Brennan says that health and education reforms will be essential in lifting the nation’s productivity rate.

CORPORATES
AUSTRALIA. PRODUCTIVITY COMMISSION, AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN BANKING ASSOCIATION

Technology’s part in the puzzle of why wages won’t rise

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Original article by Patrick Commins
The Australian Financial Review – Page: 3 : 19-Sep-18

The Reserve Bank still anticipates a gradual increase in wages growth, according to the minutes of its monthly board meeting. Meanwhile, independent economist Geoff Weir has suggested that the rate at which companies adopt new technologies is contributing to the low growth in wages. The central bank will publish a paper by Weir in which he notes that companies which act more quickly to embrace new technologies tend to enjoy higher productivity and profits, with some of these gains being passed on to employees via wage rises.

CORPORATES
RESERVE BANK OF AUSTRALIA

Productivity blamed for low wage growth

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Original article by Sid Maher
The Australian – Page: 2 : 21-May-18

Australian Industry Group CEO Innes Willox has rejected claims by ACTU president Sally McManus that low wages growth is the result of a shift in the industrial relations system in favour of employers rather than unions. Research by the AiG suggests that low growth in productivity is a major contributor to flat growth wages. Willox says low wages growth is a global trend, and he notes that there has been strong wages growth in some sectors due to supply and demand considerations.

CORPORATES
THE AUSTRALIAN INDUSTRY GROUP, ACTU, RESERVE BANK OF AUSTRALIA

Business pushes its case for restraint

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Original article by David Uren
The Australian – Page: 4 : 3-May-18

A report released by the Business Council of Australia ahead of the Federal Government’s May 2018 Budget warns that achieving a surplus in 2020-21 is highly dependent on commodity prices remaining strong. The BCA also says Australia faces the prospect of large Budget deficits in the future unless action is taken to boost productivity. The employers’ group notes that growth in productivity has averaged just 1.2 per cent over the last decade.

CORPORATES
BUSINESS COUNCIL OF AUSTRALIA, AUSTRALIA. DEPT OF THE TREASURY

Budget surplus to be brief: PBO

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Original article by David Uren
The Australian – Page: 1 & 2 : 8-Dec-17

Treasurer Scott Morrison has downplayed modelling by the Parliamentary Budget Office which suggests that productivity will need to increase in order to ensure that a Budget surplus is sustained. The Federal Government has forecast that it will post surpluses equivalent to 0.3 per cent of GDP from 2020-21, although this is based on expectations that productivity growth will remain at the long-term average of 1.6 per cent. However, growth in productivity has averaged just 1.35 per cent over the last decade, and the PBO’s analysis has found that the Budget will be "broadly balanced" by 2027-28 unless productivity growth improves.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIA. PARLIAMENTARY BUDGET OFFICE, AUSTRALIA. PRODUCTIVITY COMMISSION, INTERNATIONAL MONETARY FUND, AUSTRALIAN LABOR PARTY

Morrison puts $31bn price on Labor tax

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Original article by Simon Benson
The Australian – Page: 1 & 4 : 31-Aug-17

Federal Treasurer Scott Morrison will use his annual Bloomberg address to highlight the economic impact of the Opposition’s tax policy. He will argue that the tax take would increase by $A31bn a year under a Labor government, as the tax-to-GDP ratio would rise to 25.7 per cent. The Coalition aims to maintain the tax-to-GDP ratio at 23.7 per cent. Morrison will also call for a greater focus on health and education as a key driver of growth in productivity.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, AUSTRALIAN LABOR PARTY, BLOOMBERG LP, AUSTRALIA. DEPT OF FINANCE

Lagging on robotics risks $2.2trn boost

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Original article by David Marin-Guzman, Michael Bleby
The Australian Financial Review – Page: 28 : 9-Aug-17

A report produced by economic consultancy AlphaBeta has concluded that around nine per cent of Australian-listed companies are investing in automation, compared with 20 per cent of US companies. The report notes that an increased commitment to automation could boost the nation’s economic output by about $A1trn by 2030, while productivity would also increase significantly. The report was produced on behalf of Google.

CORPORATES
ALPHABETA, GOOGLE INCORPORATED, BHP BILLITON LIMITED – ASX BHP, RIO TINTO LIMITED – ASX RIO

Morrison needs to go micro if he wants big results

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Original article by Stephen Anthony
The Australian Financial Review – Page: 39 : 3-Jan-17

Federal Treasurer Scott Morrison needs to focus on stimulating growth in Australia’s productivity which can be achieved by more rigorous commitment to budget repair and taxation reform. Government spending must be curtailed and more attention must be paid to waste reduction. It would be desirable to establish an independent parliamentary infrastructure office whose role would be to coordinate infrastructure projects. More competition is needed in sectors which still use restrictive business and labour practices.

CORPORATES
AUSTRALIA. DEPT OF THE TREASURY, INDUSTRY SUPER AUSTRALIA PTY LTD