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Joe Hockey doesn’t understand productivity: Great news for Tony Abbott

admin — Thu, 20 May 2010 06:06:45 +0000

Joe Hockey’s budget reply speech yesterday to the National Press Club, universally described as a “shemozzle”, has revealed that the Shadow Treasurer doesn’t understand what productivity is. This is, of course, good news for Tony Abbott.

Joe Hockey doesn't know what productivity is. Photo: AAP: Alan Porritt.

Productivity is considered amongst neo-liberal economists as the key driver of economic growth and health. It is the key issue determining the rise and fall of Australia’s economic fortunes. The higher an economy’s productivity, the higher that country’s standard of living (measured in GDP).

Simply put, productivity is ratio of outputs (measured in the national accounts) to inputs (labour, materials, etc). It is a supply-side measure “capturing technical production relationships between inputs and outputs. But, implicitly, it is also about the production of goods and services that are desired, valued and in demand.” Productivity is important to the discussion around workplace relations because “productivity data are used to investigate the impact of product and labour market regulations on economic performance”.

Productivity is measured by aggregating labour productivity and capital productivity. Labour productivity defined as output per united of labour input (typically measured in hours of work), while capital productivity is efficiencies gained through capital stock (such as machines). Multifactor productivity is not widely used but is technically a better measure of productivity performance than labour productivity, and simply put is productivity improvements gained from better training, education, management practices and operational processes, rather than better machines or longer working hours.

Joe Hockey’s definition of productivity is:

Productivity growth, that is growth in GDP per capita…

He then goes into what the the Government should do to increase productivity.

This is, of course, unbelievably hypocritical (and also amazing that he gets productivity so wrong), because one of the main stated aims of WorkChoices was to increase productivity. The central objective, according to the then-Government was to “encourage the further spread of workplace agreements in order to increase productivity and hence the living standards of working Australians.” (Kevin Andrews, Hansard, 2 Nov 2005)

Hockey identifies the MUA/Webb Dock dispute as a good example of increasing workforce productivity. Working harder and longer is the most simplistic way to increase workforce productivity – and it just shows Hockey’s (and the Liberals’) lazy policy making that they consider this to be a good example.

Of course, during the WorkChoices period (2005-2007), productivity growth dropped, and there was negative growth in multifactor productivity in that period.

The Liberal Party, Joe Hockey and Tony Abbott want to bring WorkChoices back. Abbott is on the record as saying:

Let me begin my contribution to this debate by reminding members that workplace reform was one of the greatest achievements of the Howard government

Joe Hockey defended WorkChoices and the (false) claims that WorkChoices increases productivity.

Despite WorkChoices being a key plank in the Liberal Party’s economic plan to boost productivity (which it didn’t do), Joe Hockey has demonstrated that he doesn’t actually know what productivity is.

Good sources on productivity (that Joe Hockey should read):

Productivity Commission, Productivity Primer

Andrew Charlton, Ozonomics: Inside the myth of Australia’s economic superheroes, Random House Publishing, South Australia, 2007

OECD, OECD Compendium of Productivity Indicators, 2008

Are meeting toxic?

admin — Wed, 24 Mar 2010 21:25:56 +0000

I’ve been reading Reworked – a new book by 37 Signals – which suggests that work meetings are “toxic”. (Download a short sample here.)

The worst interruptions of all are meetings. Here’s why:

They’re usually about words and abstract concepts, not real things.

They usually convey an abysmally small amount of information per minute.

They drift off- subject easier than a Chicago cab in a snowstorm.

They require thorough preparation that most people don’t have time for.

They frequently have agendas so vague that nobody is really sure of the goal.

They often include at least one moron who inevitably gets his turn to waste everyone’s time with nonsense.

Meetings procreate. One meeting leads to another meeting leads to another…

When I first read this, I completely agreed. Almost everyone I know has attended dull, tedious and pointless meetings that have few (if any) outcomes.

But then I got to thinking about decision making. Most organisations, like unions, political groups, community associations, make decisions at meetings. In fact, meetings can be enormously productive, with ideas proposed and problems sorted out, and action plans determined.

I think what 37 Signals are pointing out is that poorly run, disorganised meetings with no clear agenda and an inadequate chairperson are toxic. Having a clear, concise agenda for the meeting to shape discussion, and an experienced, confident chairperson to keep everyone’s attention on track, can make meetings quick, productive and relatively pleasant.

Unfortunately, these meetings are fairly rare.

Some key message ideas for #NoCleanFeed

admin — Mon, 21 Dec 2009 06:23:56 +0000

The No Clean Feed campaign has exploded on Twitter, received extensive coverage on the tech blogs, several independent campaign sites, and has spawned its own “Glenn Beck” style domain registry controversy.

Unfortunately, much of the commentary, especially from “Pirate Party” officials, is shrill and near-hysterical in its pitch. Simply put, the majority of Australians, even if they don’t support the filter, aren’t going to buy into the idea that Australia is becoming a fascist-state or going down the Iran/China/North Korea totalitarian route.

Furthermore, it’s my view that most Australians do not believe that slow Internet equates to censorship. The things on the “Refused Classification” list include movies that feature either real s-x acts, violent s-x acts or depict underage s-x (e.g. Baise Moi or Ken Park). They also include Jihadist literature, fetish p-rn, and books on euthanasia. None of these things are “family friendly”. (I’ve written about my views on the classification system in this post.)

In discussion with some friends, I’ve prepared some key message ideas that are alternatives to the ones getting air play at the moment.

My contention is that the No Clean Feed campaign needs to not just oppose the filter, but propose an alternative.

The Government has clearly laid the ground on which the media debate is being had. Every time they get questioned about the filter, they frame the debate as one about “cyber safety” for families. In that context, it is near impossible to defend open access to fetish material, jihadi literature or movies with violent s-x scenes. I suggest avoiding commenting on the refused classification – most Australians aren’t going to be sympathetic to an argument that wants to allow free access to Jihadist propaganda, fetish images or advice on euthanasia. The civil liberties line sounds a lot like “geeks are complaining about not being able to download freaky p-rn as fast”.

The two areas that I think are strong arguments against the filter are:

Economics and productivity: The filter will destroy the productivity gains sought in the $43 billion National Broadband Network; and

Real cyber safety: The filter won’t stop or catch a single pedophile, whereas the $44 million spent on the filter could hire up to 300 new Federal Police who will actively hunt down and stop child s-x offenders.

To this end, I’ve prepared some key messages based around these two key themes.

Download the key messages here (pdf).
Download 1 page fact sheet (pdf).

Was Work Choices a Roadblock to Productivity?

admin — Tue, 01 Sep 2009 05:16:25 +0000

A critical assessment of the Work Choices laws in addressing its stated aims and objectives

The 2005 legislation, Workplace Relations Amendment (Work Choices) Act represented one of the most fundamental shifts in industrial relations laws and Commonwealth-State relations since Federation. With the principle aim of Work Choices to “unleash a new burst of productivity growth”, John Howard described â€œindustrial relations reform as “an article of faith for the Coalition parties”. This “article of faith” statement was also allegedly repeated in a speech to the 2005 Liberal Party Federal Council, although this appeal to ideology was not repeated in later public statements.

Using the corporations power in the Australian Constitution (Section 51(xx)), Work Choices sought to introduce a single national workplace relations system, overriding most state industrial relations systems. This in itself was remarkable, upheld by the High Court; until Work Choices it was widely believed that the Commonwealth’s direct role in industrial relations was limited by Section 51(xxxv), limiting powers to make laws to “conciliation and arbitration for the prevention and settlement of industrial disputes beyond the limit of one state”.

Work Choices elevated individual statutory agreements (Australian Workplace Agreements, AWAs) as the pre-eminent form of workplace agreement, with enterprise level workplace agreements (collective agreements) and state and Federal Awards relegated to lesser status. The arbitration system, encapsulated by the Australian Industrial Relations Commission (AIRC) that had been a feature of the Australian workplace relations system since 1904 had its role greatly reduced, with new Offices and Commissions responsible for overseeing the application of workplace agreements, setting of minimum wages and settling of industrial disputes.

When introduced to Parliament in November 2005, the Minister for Employment and Workplace Relations, Kevin Andrews MP said: “the Workplace Relations Amendment (Work Choices) Bill 2005 moves Australia toward a flexible, simple and fair system of workplace relations.” The central objective, according to the then-Government was to “encourage the further spread of workplace agreements in order to increase productivity and hence the living standards of working Australians.” For the Howard Government, Work Choices was not merely an economic argument, “it is a moral argument”, with the new laws to create a “good society” and a “brighter future”.

You can download the entire paper here.

A critical assessment of the Work Choices laws in addressing its stated aims and objectives by Alexander White is licensed under a Creative Commons Attribution-Noncommercial-Share Alike 2.5 Australia License.

Australia needs strong collective bargaining

admin — Sun, 02 Nov 2008 11:03:43 +0000

The right to collectively bargain was gutted by the Howard Government… unfortunately it looks like the Rudd Government may squib at fully restoring that right. Under the WorkChoices laws, Australian workers have no enforceable right to collectively bargain. Employers can indefinitely delay collective bargaining, denying their employees rights.

Collective bargaining at a workplace level is the most effective way to improve conditions and pay at work.

Paul Keating on collective bargaining:

If you go to 200 or 300 people in a factory or 200 or 300 people in a workplace and come to a three or four year bargain to the improve productivity and share it between wages and profits you’ve got a good chance of getting productivity from the whole enterprise. But if you just take one person at a time, bring them into the boss’ office and cut their wages there’s no chance of getting any productivity. That’s why trend productivity is now rapidly on the way down. It was 3 per cent under me. It’s now under 1 per cent. So how are we going to keep inflation low with, at the moment wages are running at about 4 per cent, productivity is under 1. This is consistent with an inflation rate of 3 per cent, or higher. The Reserve Bank knows that. That’s why they’ve got the rates on hold.

The great lie of the Howard Government in respect of workplace changes, they are simply a set of arrangements to keep unions out of workplaces. They’ve got nothing to do with productivity and the quicker we move away from that kind of discriminatory structure to a truly trust based co operative sharing of work and workloads, then we get back to reasonable levels of productivity and again, reasonable rates of growth in real wages. It’s no accident as you saw in today’s front page of The Sydney Morning Herald and other places that the wage share in the economy has gone down, and the profit share in the last four years has gone up because wages are now in real terms, are declining.

Labor’s policy is to legislate for collective bargaining rights, but it appears as more details come to light that no enforceable rights will be granted to Australia’s workers.

The ACTU is running a campaign to promote collective bargaining.