Timely reminder about IR and productivity

The former Executive Director of the HR Nicholls Society, John Slater, delivered the second Helen Hughes Lecture for Emerging Thinkers at the CIS office on Wednesday night.

The topic of the lecture — Unlocking Australia’s Economic Potential: IR Reform — was especially timely as we approach the 10-year anniversary of the defeat of the Howard Government at the 2007 ‘Work Choices’ election.

Work Choices remains the last example of genuine economic reform undertaken by a federal government in Australia, and its political demise and aftermath probably remains the single largest factor explaining the state of the economic reform debate (or lack of it) today.

To cut the longer story short, the debate in the last decade hasn’t been about how to grow the economic pie, or even just about how to redistribute the pie.

The debate, alas, has been about slicing up the non-existent magic pudding of government spending to fund whatever ‘good cause’ or gravy train comes along, paid for, of course, by deficit and debt.

Yet in the real world — as Federal MP and Assistant Minister for Cities and Digital Transformation, Angus Taylor, observed recently — economic reality is biting working Australians.

Taxes are rising, house prices are increasing, travel times are lengthening, and electricity bills and household debt are soaring — but real wages growth is slowing, due to stalling productivity growth.

As Paul Krugman has famously said: in the end, productivity — producing more outputs with the same or less resources — is everything with respect to improving the living standards of a country.

But the key to real wages and productivity growth is industrial relations; which is why the CIS was so pleased to both remember the great Helen Hughes, and give John Slater a platform on which to draw renewed and overdue attention to vital links between economic prosperity and IR reform