This gobsmacking four-day working week proposal sets us back 25 years
The idea that businesses could afford to pay the same for 20 per cent less output, while meeting customer demand and keep costs down for consumers is simply ludicrous.
Anyone with a sense of self-awareness knows we face challenging times: poor productivity, major technological change, massive global upheaval, skills and labour shortages and more.
Now is the time to work smarter, not less, to keep us competitive and economically viable.
This proposal, less than a week before the Treasurer's Economic Reform Roundtable to discuss boosting productivity and improving economic settings, simply fails the pub test. Fortunately, the federal government has been quick to kick it into the long grass where it should remain.
The notion that paying people the same to work 20 per cent less means they will be more productive when they do work just doesn't stack up. It unfortunately shows the ACTU is not serious about identifying what is good for Australian workers or the community.
At the current rate of productivity growth, it would take more than 25 years to generate enough productivity for business to break even with the proposal. That's a quarter of a century to get our productivity back to where it is now, while the rest of the world powers ahead.
This would commit an entire generation's worth of national productivity gains to a union frolic, when so many other urgent and pressing issues need more investment in our country.
If the unions were serious about increased workplace flexibility, they could have gone to the Fair Work Commission and proposed it as part of renegotiation of awards. This would open a proper discussion on trade-offs which link flexibility to productivity improvements.
We need more flexible workplaces. Employers want it and many employees want it. One obvious area of need is to give both more options to change working times by agreement. Neither business nor workers benefit when rigid hours are forced on them.
But this isn't where the ACTU went. They've simply tried to create a media headline by throwing out an unrealistic claim lacking any evidence or realistic prospect. They cited a small academic study whose authors concede they can't verify there would actually be economy-wide productivity gains. This isn't the serious and good faith discussion required at next week's Roundtable.
This followed on from the Victorian government plan to give employees a legislated right to work two days a week from home.
It seems the union movement and some in government don't want Australians to work at all. They want to turn back time, cut productivity and make Australia less attractive to much-needed investment.
It also comes at a time when the country is desperately short of workers with the right skills for our needs. More than 340,000 jobs currently sit vacant - around 100,000 more than normal - and a third of the labour force work in occupations classified as in national supply shortage.
Standing down 20 per cent of our workforce capacity will only make the skills shortages cruelling our industries - particularly in regional Australia - that much worse.
This is reckless and irresponsible and seeks to prioritise feel-good headlines over sound policy and economic management. It would have serious impacts across the country, in particular in our regions, harming working people, businesses of all sizes and local communities.
It also comes at a time when the Australian government is rightly trying to focus on doing the opposite - lifting productivity, which is the ultimate source of higher wages and prosperity for generations to come.
The importance of reversing Australia's productivity crisis could not be clearer. The Reserve Bank of Australia, a day before the ACTU announced its "plan", said Australians faced declining living standards because of falling productivity.
This threatens to be an intergenerational failure of epic proportions. The leaders of today should not betray the legacy of preceding generations by failing to bequeath an Australia in which each generation can build on the hard work and smart decisions of its forebears.
Countries around the world are fighting tooth and nail to improve their competitiveness, including in the race to successfully seize the opportunities created by changing technologies such as artificial intelligence.
The RBA is warning us that Australia is on a fast track to going backwards unless we can increase our productivity. We need to take notice and work smarter together to meet this challenge.
The ACTU and governments at all levels should be reckoning with these issues and - with the productivity challenge the government has called out through next week's Economic Reform Roundtable - not indulge in luxury beliefs and fanciful notions which will only harm working Australians, their families and communities.
The ACTU's gobsmacking proposal for a national four-day working week would take our country's productivity back a quarter of a century, drive businesses to the wall and turn us into an uncompetitive international laughing stock.
The idea that businesses could afford to pay the same for 20 per cent less output, while meeting customer demand and keep costs down for consumers is simply ludicrous.
Anyone with a sense of self-awareness knows we face challenging times: poor productivity, major technological change, massive global upheaval, skills and labour shortages and more.
Now is the time to work smarter, not less, to keep us competitive and economically viable.
This proposal, less than a week before the Treasurer's Economic Reform Roundtable to discuss boosting productivity and improving economic settings, simply fails the pub test. Fortunately, the federal government has been quick to kick it into the long grass where it should remain.
The notion that paying people the same to work 20 per cent less means they will be more productive when they do work just doesn't stack up. It unfortunately shows the ACTU is not serious about identifying what is good for Australian workers or the community.
At the current rate of productivity growth, it would take more than 25 years to generate enough productivity for business to break even with the proposal. That's a quarter of a century to get our productivity back to where it is now, while the rest of the world powers ahead.
This would commit an entire generation's worth of national productivity gains to a union frolic, when so many other urgent and pressing issues need more investment in our country.
If the unions were serious about increased workplace flexibility, they could have gone to the Fair Work Commission and proposed it as part of renegotiation of awards. This would open a proper discussion on trade-offs which link flexibility to productivity improvements.
We need more flexible workplaces. Employers want it and many employees want it. One obvious area of need is to give both more options to change working times by agreement. Neither business nor workers benefit when rigid hours are forced on them.
But this isn't where the ACTU went. They've simply tried to create a media headline by throwing out an unrealistic claim lacking any evidence or realistic prospect. They cited a small academic study whose authors concede they can't verify there would actually be economy-wide productivity gains. This isn't the serious and good faith discussion required at next week's Roundtable.
This followed on from the Victorian government plan to give employees a legislated right to work two days a week from home.
It seems the union movement and some in government don't want Australians to work at all. They want to turn back time, cut productivity and make Australia less attractive to much-needed investment.
It also comes at a time when the country is desperately short of workers with the right skills for our needs. More than 340,000 jobs currently sit vacant - around 100,000 more than normal - and a third of the labour force work in occupations classified as in national supply shortage.
Standing down 20 per cent of our workforce capacity will only make the skills shortages cruelling our industries - particularly in regional Australia - that much worse.
This is reckless and irresponsible and seeks to prioritise feel-good headlines over sound policy and economic management. It would have serious impacts across the country, in particular in our regions, harming working people, businesses of all sizes and local communities.
It also comes at a time when the Australian government is rightly trying to focus on doing the opposite - lifting productivity, which is the ultimate source of higher wages and prosperity for generations to come.
The importance of reversing Australia's productivity crisis could not be clearer. The Reserve Bank of Australia, a day before the ACTU announced its "plan", said Australians faced declining living standards because of falling productivity.
This threatens to be an intergenerational failure of epic proportions. The leaders of today should not betray the legacy of preceding generations by failing to bequeath an Australia in which each generation can build on the hard work and smart decisions of its forebears.
Countries around the world are fighting tooth and nail to improve their competitiveness, including in the race to successfully seize the opportunities created by changing technologies such as artificial intelligence.
The RBA is warning us that Australia is on a fast track to going backwards unless we can increase our productivity. We need to take notice and work smarter together to meet this challenge.
The ACTU and governments at all levels should be reckoning with these issues and - with the productivity challenge the government has called out through next week's Economic Reform Roundtable - not indulge in luxury beliefs and fanciful notions which will only harm working Australians, their families and communities.
The ACTU's gobsmacking proposal for a national four-day working week would take our country's productivity back a quarter of a century, drive businesses to the wall and turn us into an uncompetitive international laughing stock.
The idea that businesses could afford to pay the same for 20 per cent less output, while meeting customer demand and keep costs down for consumers is simply ludicrous.
Anyone with a sense of self-awareness knows we face challenging times: poor productivity, major technological change, massive global upheaval, skills and labour shortages and more.
Now is the time to work smarter, not less, to keep us competitive and economically viable.
This proposal, less than a week before the Treasurer's Economic Reform Roundtable to discuss boosting productivity and improving economic settings, simply fails the pub test. Fortunately, the federal government has been quick to kick it into the long grass where it should remain.
The notion that paying people the same to work 20 per cent less means they will be more productive when they do work just doesn't stack up. It unfortunately shows the ACTU is not serious about identifying what is good for Australian workers or the community.
At the current rate of productivity growth, it would take more than 25 years to generate enough productivity for business to break even with the proposal. That's a quarter of a century to get our productivity back to where it is now, while the rest of the world powers ahead.
This would commit an entire generation's worth of national productivity gains to a union frolic, when so many other urgent and pressing issues need more investment in our country.
If the unions were serious about increased workplace flexibility, they could have gone to the Fair Work Commission and proposed it as part of renegotiation of awards. This would open a proper discussion on trade-offs which link flexibility to productivity improvements.
We need more flexible workplaces. Employers want it and many employees want it. One obvious area of need is to give both more options to change working times by agreement. Neither business nor workers benefit when rigid hours are forced on them.
But this isn't where the ACTU went. They've simply tried to create a media headline by throwing out an unrealistic claim lacking any evidence or realistic prospect. They cited a small academic study whose authors concede they can't verify there would actually be economy-wide productivity gains. This isn't the serious and good faith discussion required at next week's Roundtable.
This followed on from the Victorian government plan to give employees a legislated right to work two days a week from home.
It seems the union movement and some in government don't want Australians to work at all. They want to turn back time, cut productivity and make Australia less attractive to much-needed investment.
It also comes at a time when the country is desperately short of workers with the right skills for our needs. More than 340,000 jobs currently sit vacant - around 100,000 more than normal - and a third of the labour force work in occupations classified as in national supply shortage.
Standing down 20 per cent of our workforce capacity will only make the skills shortages cruelling our industries - particularly in regional Australia - that much worse.
This is reckless and irresponsible and seeks to prioritise feel-good headlines over sound policy and economic management. It would have serious impacts across the country, in particular in our regions, harming working people, businesses of all sizes and local communities.
It also comes at a time when the Australian government is rightly trying to focus on doing the opposite - lifting productivity, which is the ultimate source of higher wages and prosperity for generations to come.
The importance of reversing Australia's productivity crisis could not be clearer. The Reserve Bank of Australia, a day before the ACTU announced its "plan", said Australians faced declining living standards because of falling productivity.
This threatens to be an intergenerational failure of epic proportions. The leaders of today should not betray the legacy of preceding generations by failing to bequeath an Australia in which each generation can build on the hard work and smart decisions of its forebears.
Countries around the world are fighting tooth and nail to improve their competitiveness, including in the race to successfully seize the opportunities created by changing technologies such as artificial intelligence.
The RBA is warning us that Australia is on a fast track to going backwards unless we can increase our productivity. We need to take notice and work smarter together to meet this challenge.
The ACTU and governments at all levels should be reckoning with these issues and - with the productivity challenge the government has called out through next week's Economic Reform Roundtable - not indulge in luxury beliefs and fanciful notions which will only harm working Australians, their families and communities.
The ACTU's gobsmacking proposal for a national four-day working week would take our country's productivity back a quarter of a century, drive businesses to the wall and turn us into an uncompetitive international laughing stock.
The idea that businesses could afford to pay the same for 20 per cent less output, while meeting customer demand and keep costs down for consumers is simply ludicrous.
Anyone with a sense of self-awareness knows we face challenging times: poor productivity, major technological change, massive global upheaval, skills and labour shortages and more.
Now is the time to work smarter, not less, to keep us competitive and economically viable.
This proposal, less than a week before the Treasurer's Economic Reform Roundtable to discuss boosting productivity and improving economic settings, simply fails the pub test. Fortunately, the federal government has been quick to kick it into the long grass where it should remain.
The notion that paying people the same to work 20 per cent less means they will be more productive when they do work just doesn't stack up. It unfortunately shows the ACTU is not serious about identifying what is good for Australian workers or the community.
At the current rate of productivity growth, it would take more than 25 years to generate enough productivity for business to break even with the proposal. That's a quarter of a century to get our productivity back to where it is now, while the rest of the world powers ahead.
This would commit an entire generation's worth of national productivity gains to a union frolic, when so many other urgent and pressing issues need more investment in our country.
If the unions were serious about increased workplace flexibility, they could have gone to the Fair Work Commission and proposed it as part of renegotiation of awards. This would open a proper discussion on trade-offs which link flexibility to productivity improvements.
We need more flexible workplaces. Employers want it and many employees want it. One obvious area of need is to give both more options to change working times by agreement. Neither business nor workers benefit when rigid hours are forced on them.
But this isn't where the ACTU went. They've simply tried to create a media headline by throwing out an unrealistic claim lacking any evidence or realistic prospect. They cited a small academic study whose authors concede they can't verify there would actually be economy-wide productivity gains. This isn't the serious and good faith discussion required at next week's Roundtable.
This followed on from the Victorian government plan to give employees a legislated right to work two days a week from home.
It seems the union movement and some in government don't want Australians to work at all. They want to turn back time, cut productivity and make Australia less attractive to much-needed investment.
It also comes at a time when the country is desperately short of workers with the right skills for our needs. More than 340,000 jobs currently sit vacant - around 100,000 more than normal - and a third of the labour force work in occupations classified as in national supply shortage.
Standing down 20 per cent of our workforce capacity will only make the skills shortages cruelling our industries - particularly in regional Australia - that much worse.
This is reckless and irresponsible and seeks to prioritise feel-good headlines over sound policy and economic management. It would have serious impacts across the country, in particular in our regions, harming working people, businesses of all sizes and local communities.
It also comes at a time when the Australian government is rightly trying to focus on doing the opposite - lifting productivity, which is the ultimate source of higher wages and prosperity for generations to come.
The importance of reversing Australia's productivity crisis could not be clearer. The Reserve Bank of Australia, a day before the ACTU announced its "plan", said Australians faced declining living standards because of falling productivity.
This threatens to be an intergenerational failure of epic proportions. The leaders of today should not betray the legacy of preceding generations by failing to bequeath an Australia in which each generation can build on the hard work and smart decisions of its forebears.
Countries around the world are fighting tooth and nail to improve their competitiveness, including in the race to successfully seize the opportunities created by changing technologies such as artificial intelligence.
The RBA is warning us that Australia is on a fast track to going backwards unless we can increase our productivity. We need to take notice and work smarter together to meet this challenge.
The ACTU and governments at all levels should be reckoning with these issues and - with the productivity challenge the government has called out through next week's Economic Reform Roundtable - not indulge in luxury beliefs and fanciful notions which will only harm working Australians, their families and communities.
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Low inflation and official interest rates through the 2010s, then COVID, the post-pandemic inflation explosion, Russia's invasion of Ukraine, and more recently the war in Gaza all diverted attention away from the productivity slowdown. But with inflation subsiding and Donald Trump upending the global trading order, most governments – including the freshly re-elected administration of Anthony Albanese – are revisiting ways to get their economies back to health. Treasurer Jim Chalmers, who will sit through all roundtable sessions, and whose department will be driving much of the analysis of the various proposals put up by participants, has cautioned that those looking for instant results on Thursday evening will be disappointed. '[The point of] this economic reform roundtable is not to make decisions, it's to inform the government's decisions,' Chalmers told ABC Radio National Breakfast on Wednesday. 'And that's the point that we have made all along.' The roundtable has attracted almost 900 submissions, although some proposals appear dead on arrival. There seems little appetite, for instance, to support the ACTU's ambit claim for a four-day working week without a cut in pay. Loading The Productivity Commission has, through five papers canvassing everything from tax to AI, made more than 40 separate recommendations of its own. The government has held a series of industry-specific roundtables in areas such as mining, agriculture and housing, where a host of ideas have surfaced. Chalmers sat down with business leaders and lobby groups ahead of the roundtable, as have other ministers. 'I think it has been a very worthwhile thing that we are shaking the tree for ideas, and the prime minister and I are aligned in the way we go about that,' Chalmers told Ratio National. The reason for so many ideas bubbling up is twofold. The first is that it has been a long, long time since a government has asked all and sundry to produce a shopping list of suggestions. The second is that there is no single bullet solution to a productivity problem that has afflicted every nation and almost every corner of the economy. In housing, for instance, the average time in Australia to complete a block of apartments has soared since 2008 from around 17 months to 28 months. Building a house has increased from seven months to 10. But in comparison to other countries, the Australian construction sector is almost a beacon of hope. The Productivity Commission found building productivity in Australia is outperforming the US, Britain and Sweden. Explaining its reason for lowering its productivity assumption, the Reserve Bank suggested a number of reasons. They include declining dynamism among businesses and across the labour market, slower rollout of technological breakthroughs, falling competition, regulatory red tape, a slowdown in the growth of skills among workers, and a drop in trade linkages across the world. Even measuring productivity can be difficult. Some pundits have blamed the increase in financial resources and people in the care sectors of the economy (aged care, childcare, health, disability) for the slowdown in productivity. Measuring productivity in these sectors, where relatively low-paid people provide intense services to the frail, sick, old or young, is notoriously difficult. The Productivity Commission this week reported that by a traditional measure of productivity, it had grown at just 0.1 per cent a year across the nation's hospitals between 2008-09 and 2018-19. By contrast, productivity across the entire economy grew by 0.7 per cent per annum. Yet that doesn't consider the huge improvements in the quality of care or patient outcomes. Cancer treatments, the commission said, are far more effective today than they were a few years ago. When you account for quality, healthcare productivity grew at 3 per cent per year through much of the past decade, dwarfing the rest of the economy. 'Simply put, Australians are getting better outcomes, but not necessarily more care services, per dollar spent,' the commission noted. Loading Another issue is that productivity in the mining sector – the nation's most productive based on the value of its outputs – has fallen off a cliff over the past five years. It has tumbled by 20 per cent, largely because miners are now tapping lower-value deposits while facing a string of natural disasters that have flooded coal mines or shut down key production sites. No matter the varied causes, it's clear the government and most participants want to target a productivity bugbear: red tape and bureaucracy. 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Loading It's pinning its hopes on the roundtable coming up with ways to lift school completion rates and overall education outcomes, given their strong connection to improved wages and incomes. 'We know children and young people from disadvantaged backgrounds are more susceptible to falling behind in the classroom, disengaging with school, not finishing year 12 and not being able to fully participate in the workforce,' the charity's chief executive officer, Doug Taylor, says. 'To boost the pool of talent in the nation's workforce, we must plug the holes to stop students experiencing disadvantage from falling through the cracks.' Despite the reticence of the government to deal with the multitude of issues with the nation's tax system, many people believe the purpose of next week is to put tax reform squarely at the centre of Anthony Albanese's second-term agenda. Independent MP Allegra Spender, who has a seat around at the roundtable, is looking for a shift to a dual income tax system. Investors would lose the ability to offset their taxable income through losses on their property holdings, with the revenue used to reduce personal income tax rates. 'You should be rewarded for investing in yourself, not for expanding your property portfolio,' she said. Ben Phillips, from the ANU's Centre for Social Policy Research, has proposed a major simplification of the entire system that includes axing the Medicare levy and the low-income tax offset, removing Family Tax Benefit B (while substantially lifting Family Tax Benefit A), and making changes to JobSeeker and the parenting payment. He says that over the years, the tax and welfare system has been subject to changes that often appear ad hoc, politically motivated or driven by short-term budget goals. 'Many of these changes lack a clear rationale and, arguably, are unnecessary and have themselves added to complexity,' he says. From family payments to suburban housing blocks to helmet standards, productivity – and its slowdown – permeates the economy. Without any concrete proposals out of next week, Michele Bullock will be joined by a prime minister and treasurer with concern etched on their collective faces.
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Low inflation and official interest rates through the 2010s, then COVID, the post-pandemic inflation explosion, Russia's invasion of Ukraine, and more recently the war in Gaza all diverted attention away from the productivity slowdown. But with inflation subsiding and Donald Trump upending the global trading order, most governments – including the freshly re-elected administration of Anthony Albanese – are revisiting ways to get their economies back to health. Treasurer Jim Chalmers, who will sit through all roundtable sessions, and whose department will be driving much of the analysis of the various proposals put up by participants, has cautioned that those looking for instant results on Thursday evening will be disappointed. '[The point of] this economic reform roundtable is not to make decisions, it's to inform the government's decisions,' Chalmers told ABC Radio National Breakfast on Wednesday. 'And that's the point that we have made all along.' The roundtable has attracted almost 900 submissions, although some proposals appear dead on arrival. There seems little appetite, for instance, to support the ACTU's ambit claim for a four-day working week without a cut in pay. Loading The Productivity Commission has, through five papers canvassing everything from tax to AI, made more than 40 separate recommendations of its own. The government has held a series of industry-specific roundtables in areas such as mining, agriculture and housing, where a host of ideas have surfaced. Chalmers sat down with business leaders and lobby groups ahead of the roundtable, as have other ministers. 'I think it has been a very worthwhile thing that we are shaking the tree for ideas, and the prime minister and I are aligned in the way we go about that,' Chalmers told Ratio National. The reason for so many ideas bubbling up is twofold. The first is that it has been a long, long time since a government has asked all and sundry to produce a shopping list of suggestions. The second is that there is no single bullet solution to a productivity problem that has afflicted every nation and almost every corner of the economy. In housing, for instance, the average time in Australia to complete a block of apartments has soared since 2008 from around 17 months to 28 months. Building a house has increased from seven months to 10. But in comparison to other countries, the Australian construction sector is almost a beacon of hope. The Productivity Commission found building productivity in Australia is outperforming the US, Britain and Sweden. Explaining its reason for lowering its productivity assumption, the Reserve Bank suggested a number of reasons. They include declining dynamism among businesses and across the labour market, slower rollout of technological breakthroughs, falling competition, regulatory red tape, a slowdown in the growth of skills among workers, and a drop in trade linkages across the world. Even measuring productivity can be difficult. Some pundits have blamed the increase in financial resources and people in the care sectors of the economy (aged care, childcare, health, disability) for the slowdown in productivity. Measuring productivity in these sectors, where relatively low-paid people provide intense services to the frail, sick, old or young, is notoriously difficult. The Productivity Commission this week reported that by a traditional measure of productivity, it had grown at just 0.1 per cent a year across the nation's hospitals between 2008-09 and 2018-19. By contrast, productivity across the entire economy grew by 0.7 per cent per annum. Yet that doesn't consider the huge improvements in the quality of care or patient outcomes. Cancer treatments, the commission said, are far more effective today than they were a few years ago. When you account for quality, healthcare productivity grew at 3 per cent per year through much of the past decade, dwarfing the rest of the economy. 'Simply put, Australians are getting better outcomes, but not necessarily more care services, per dollar spent,' the commission noted. Loading Another issue is that productivity in the mining sector – the nation's most productive based on the value of its outputs – has fallen off a cliff over the past five years. It has tumbled by 20 per cent, largely because miners are now tapping lower-value deposits while facing a string of natural disasters that have flooded coal mines or shut down key production sites. No matter the varied causes, it's clear the government and most participants want to target a productivity bugbear: red tape and bureaucracy. The battle to get bike helmets into the economy is a small-scale example. While the nation's cyclists protect their heads with imported helmets, the safety standards governing the headwear differs. It costs importers about $14 million a year to comply with those different standards. Loading The Australian Competition and Consumer Commission started a process to align the European and American standards governing helmets sold domestically in 2016. It was only completed last year, but it has yet to be signed off by all states and territories. 'The net result is that eight years after realising the value of harmonisation, most Australians are yet to see benefits,' the Productivity Commission reported earlier this month. Productivity is not just red tape or new machines or tax. The skills of the workforce are also a vital component. The Smith Family says there are 3.3 million people living in poverty in Australia, including 761,000 children. Loading It's pinning its hopes on the roundtable coming up with ways to lift school completion rates and overall education outcomes, given their strong connection to improved wages and incomes. 'We know children and young people from disadvantaged backgrounds are more susceptible to falling behind in the classroom, disengaging with school, not finishing year 12 and not being able to fully participate in the workforce,' the charity's chief executive officer, Doug Taylor, says. 'To boost the pool of talent in the nation's workforce, we must plug the holes to stop students experiencing disadvantage from falling through the cracks.' Despite the reticence of the government to deal with the multitude of issues with the nation's tax system, many people believe the purpose of next week is to put tax reform squarely at the centre of Anthony Albanese's second-term agenda. Independent MP Allegra Spender, who has a seat around at the roundtable, is looking for a shift to a dual income tax system. Investors would lose the ability to offset their taxable income through losses on their property holdings, with the revenue used to reduce personal income tax rates. 'You should be rewarded for investing in yourself, not for expanding your property portfolio,' she said. Ben Phillips, from the ANU's Centre for Social Policy Research, has proposed a major simplification of the entire system that includes axing the Medicare levy and the low-income tax offset, removing Family Tax Benefit B (while substantially lifting Family Tax Benefit A), and making changes to JobSeeker and the parenting payment. He says that over the years, the tax and welfare system has been subject to changes that often appear ad hoc, politically motivated or driven by short-term budget goals. 'Many of these changes lack a clear rationale and, arguably, are unnecessary and have themselves added to complexity,' he says. From family payments to suburban housing blocks to helmet standards, productivity – and its slowdown – permeates the economy. Without any concrete proposals out of next week, Michele Bullock will be joined by a prime minister and treasurer with concern etched on their collective faces.
