Courier Mail – How did we get stuck with counter-productive Labor

After the election last year, the Labor Government finally realised that they had a problem with productivity. So they convened a “productivity roundtable” of the nation’s industry, financial and union leaders in Canberra. At the start of that roundtable, the Treasurer, Jim Chalmers, said that “in one of the first Cabinet meetings after the election we decided to put productivity at the very core of our second term agenda.” He said they did so “because that’s the best way to lift living standards and make people better off.” The Government has correctly identified the problem – they just haven’t come up with any solutions. Last week’s national accounts data shows that almost a year after their productivity roundtable, our productivity has fallen. Last week in the Senate I asked the Finance Minister, “What elements of your Budget help increase productivity?” Her answer was; “there is a glossy, an A4 there.” In Canberra language, “a glossy” means the brochures full of pictures of smiling people that are used to sell the Government’s policies. No wonder this Government has recorded the worst productivity performance in our nation’s history when a senior economic Minister cannot provide tangible examples of what their plan is to boost productivity. Australia has never experienced a f df four-year period of negative productivity growth until this Government. And the last four years under Labor have not just been a little bit negative – our productivity is falling off a cliff, down 5 per cent since Labor formed government. Productivity is important because it determines how much wealth our country can create from the resources we have. It is ultimately what determines our living standards, the price of things, and interest rates. As the Reserve Bank Governor told the Australian Parliament last year, “You can’t get any growth in real incomes if you don’t have productivity growth.” If productivity had grown at its average rate over the last 20 years of 1.4 per cent per year, instead of falling as it has under Labor, then the annual incomes of Australians would be $4200 better off. The Government’s meek response is that productivity has been falling in most Western countries since the pandemic – but Australia’s fall has been one of the worst. And there has been one clear outlier among advanced economies. The United States has seen its productivity lift by 9 per cent since the end of the pandemic. No doubt a big reason for that lift is America’s aggressive development of its energy resources. Under the Biden administration, the US set a new record for the largest amount of oil produced by any country in any year in history. This helped give American families and businesses some of the lowest energy prices in the world. Energy prices have a direct link to productivity because if it costs more to make and move things, then productivity falls. If energy prices rise, living standards fall. When you dig deeper into our poor productivity performance, there is one standout factor. Over the past 20 years the biggest drop in productivity has been in our electricity and gas sectors. The other poor performers have been mining, manufacturing and construction – industries that are all heavily impacted by the high cost of energy. The biggest free kick we could give to living standards in Australia would be to lower energy prices, create more wealth, lower the cost of goods, and give Australians a real wage increase. That is why the Liberals and Nationals will scrap net zero and instead use all of our energy resources. Ninety-five per cent of Australia’s abundant energy is locked up in coal and uranium – the two things that Labor does not want to use. There is no reason Australia should not have low energy prices like the United States. Before we started on this renewable energy fantasy, energy prices here were as low as in the United States. But the net zero obsession of this Government has destroyed Australia’s energy competitiveness and destroyed our living standards in its wake. Our government once talked about productivity but now that it has been exposed that it has no plan to lift productivity, it has stopped talking about it. The Government has instead resorted to a “rob Peter to pay Paul” tax grab that will just make everyone poorer. We need a change. We need leadership that sets the primary objective of our energy system to deliver the lowest possible energy prices for Australians. Only then will families suffering under the highest cost of living get a break.