Abbott on productivity

I know what you need on this tired Friday afternoon. Tony Abbott talking about productivity! Enjoy.

DEREGULATING FOR A MORE PRODUCTIVE ECONOMY This is an important and timely conference because it’s not about who is or who isn’t winning the short term political battle but about who has a plan for the long term future of our country. My read of the public’s mood right now is that they’re sick of the spin that’s coming out of Canberra.  As MPs, we can’t opt out of this government’s political diversions but the Coalition’s focus will always be on what matters for the forgotten families and the vulnerable small businesses of Australia. That’s why good policy should prevail over clever politics, reform over rancour and substance over spin. Get the policy right, Paul Keating used to say, and the politics will look after themselves. I’m not sure how the former prime minister would have handled today’s 24/7 news cycle but long term policy considerations must always be factored into short term political management if our country is to be well governed. Over the past two years, the Coalition has consulted widely across all parts of Australia to develop comprehensive policies to improve our nation. In five speeches earlier this year, I developed our plans for a stronger economy, stronger communities, a cleaner environment, stronger borders and modern infrastructure. I thank all my senior colleagues for their contribution to this work, especially the Coalition’s senior economic team, Joe Hockey and Andrew Robb. Due to their hard work, the Coalition has an overall plan for a strong and prosperous economy and a safe and secure Australia. As I have learned from my nine years as a Howard government minister and from my six years as Leader of the House of Representatives, good government can foster change for the better. I’m confident that the next Coalition government can build on the strengths of its predecessor which, after all, delivered more than 2 million new jobs, a 20 per cent plus increase in real wages and a doubling of Australians’ net wealth per person. Our country is crying out for leadership. Our best days are ahead of us. The backflips and betrayals of minority government are an aberration rather than the new normal of public life. At the heart of good government, is sound economic management. Policy should be directed towards lower and simpler tax, fairer and more effective administration, better and more efficient services and, above all else, towards a stronger and more prosperous economy. With a strong economy, the country can be defended, the vulnerable can be protected, and the environment can be improved. A strong economy provides the conditions where Australians can run their own lives and plan their future with confidence. The stronger the economy, the fewer the invidious choices that governments have to make. Credible government must have a sound economic strategy. It need not embody a consensus but it must have a strong rationale, consistently pursued. Sound budget management means a sustainable surplus over the medium term because governments have to live within their means. Sound economic policy needs a productivity focus because that’s the only sustainable way to lift Australians’ standard of living. The current government, I regret to say, has no credible plan to return to surplus. Deep down, it thinks that the state isn’t subject to the same budgetary constraints that apply to businesses and households. Governments can defy economic gravity in a way that families and businesses can’t – but not forever. As the Eurozone is discovering the hard way, there are limits even to sovereign governments’ ability to live beyond their means. Four days before the last election, the Prime Minister was asked whether she’d resign if she failed to get the budget back to surplus, as promised, in the current financial year. “The budget is coming back to surplus” she declared. “No ‘ifs’, no ‘buts’, it will happen”. A day later, the Treasurer declared that the budget would be in surplus by 2012-13 “come hell or high water”. In fact, Treasurer Swan has declared that the government will deliver a surplus this financial year on at least 150 separate occasions since May 2010. On the return to surplus, Prime Minister Gillard told a community forum just before polling day that “failure is not an option” because, as she has variously said, a surplus is “the right thing to do for Australian families”, “it’s the right strategy for jobs and growth”, and “the best way we can lock in confidence about the future and send a message to the world”. In fact, the message from last week’s MYEFO mini-budget is that this government will never deliver an honest surplus. The great disappearing surplus rests on $5 billion of National Broadband Network spending being kept off-budget and $10 billion of accounting fiddles and money shuffles – such as spending just $1 million from the Energy Security Fund this year but $1 billion in both the year before and the year after! Even with these tricks, the $1.1 billion surplus depends on $2 billion in mining tax revenue. It’s lucky that the government chose to deliver its mini-budget on a Monday because on the Wednesday it was revealed that the mining tax had raised no revenue whatsoever in its first quarter. Even from a government that had previously built school halls for no pupils, it takes a special genius to create a tax with no revenue. What’s more, next year’s supposed $2.3 billion surplus rests on $5.5 billion of brought forward company tax. This paperwork-creating fiddle is the best the government can manage to turn an election year deficit into another bodgied-up surplus. This government has a political strategy – to proclaim a surplus; but not an economic strategy – actually to deliver one. Then there are its unfunded future commitments: a further $10.5 billion a year for the National Disability Insurance Scheme, up to $6.5 billion a year for the Gonski education changes, and – just last Friday – another $1.7 billion for Murray-Darling Basin infrastructure from a government that is much better at spending money than getting results. Many of these are worthy projects but they should only be promised when they can be paid for. By mortgaging the future, the Prime Minister and the Treasurer are acting like bad tenants, trashing the house before they’re evicted. With a softer Chinese economy, America stagnant and Europe mired in recession, more than ever, Australia needs to get its own economic house in order. Businesses and individuals borrowing too much and living beyond their means were the root cause of the Global Financial Crisis. In trying to deal with its aftermath, governments don’t seem to have grasped that you can’t solve a problem caused by too much debt and deficit with yet more debt and deficit. To the extent that they have any validity, the current government’s boasts about how well we’re doing owe almost everything to the lucky break of the biggest commodity price boom since the gold rush of the 1850s. Yet in 2004-5, with unemployment at about 5 per cent, the Howard government delivered a 1.5 per cent of GDP surplus – despite terms of trade 40 per cent lower than last year when the current government delivered a deficit of 3 per cent of GDP. That’s an instructive comparison. Today’s success, such as it is, has been made in China, not here. A sustainable economic strategy can’t be based on constantly rising terms of trade. A lazy government has been relying on luck that can’t last. Despite the best terms of trade ever, it has turned consistent 1 per cent of GDP surpluses into the four biggest deficits in our history. It’s turned $70 billion of net Commonwealth assets into almost $150 billion of net debt (or nearly $7000 for every man, woman and child). And it’s now spending about $20 million a day just to pay the interest on what it’s already borrowed. Under the current government, the participation rate has dropped, the pace of jobs growth has been 30 per cent slower, and less than half of the new jobs have been market sector jobs compared with 70 per cent under the Howard government. Under Labor, GDP per head has grown by just over one half of one per cent per year compared to well over two per cent a year under its predecessor. Calendar 2011 was the first year in two decades with no increase in the number of jobs. Although the public may be only dimly aware of these details, the massive rise in the savings rate, to levels not seen for 20 years, in part, is their implicit vote of no confidence in the current government.  People know that these are uncertain times at best and sense that they should save because their government refuses to. The carbon tax – which the government is desperate to have the Coalition stop talking about – is not just a hit on families’ cost of living. It’s actually emblematic of this government’s failure to understand what makes an economy work: it’s a great big new tax, great big new bureaucracies, a great big new slush fund, and great big new handouts to politically-favoured constituencies. The carbon tax is not “reform” in the tradition of cutting tariffs and floating the dollar because, as Professor Richard Blandy recently noted, “these reforms allowed the Australian economy to restructure towards areas of comparative advantage”. By contrast, the carbon tax denies our economy the comparative advantage of access to abundant fossil fuel. On the government’s own modelling, abolishing the carbon tax alone will add nearly $5000 to annual gross national income per head by 2050. Abolishing the carbon tax alone will add a trillion dollars extra (or nearly a full year’s output) to our cumulative GDP by 2050. So, the first big economic reform of the next Coalition government will be to abolish unnecessary taxes. The carbon tax will go because it damages the economy without helping the environment and the mining tax will go because it’s damaged confidence and investment without actually raising any revenue. Our next reform will be restoring prudent budget management. We’ll get spending down by reducing the size of government through natural attrition, rationalising the overlap between different levels of government, and establishing a once-in-a-generation commission of audit to make government more efficient. The abolition of two taxes slated to raise more than $40 billion over the forward estimates makes serious savings mandatory, even though the Coalition won’t go ahead with all the associated spending.  That’s why I’ve warned shadow ministers that some of our own initiatives might have to be phased in, or commence later than if the current structural budget position were not so poor. In many portfolio areas, the policy the Coalition takes to the next election won’t involve any new spending at all but will focus on administrative changes to make people’s lives easier. The main elements of the Coalition’s economic plan are lower taxes, lower spending, closer engagement with Asia and, crucially, higher productivity because, as Reserve Bank Governor Glenn Stevens has said: “everything comes back to productivity. It always does”. For the Coalition, a more productive economy is a less-regulated one. For Labor, by contrast, a more productive economy is one with more government spending even though it’s much easier to spend the money than to get a result. Today, I release the Coalition’s deregulation discussion paper arising from the red tape review that Senator Arthur Sinodinos chaired with the help of Kelly O’Dwyer and Senator David Bushby. It’s abundantly clear from their consultations that over-regulation is an incentive-destroying, job-jeopardising, family budget-consuming burden on our economy and on everyone employed in it. According to the Australian Chamber of Commerce and Industry, 73 per cent of businesses believe that the overall regulatory compliance burden has increased in the past two years and 60 per cent of businesses spend more than $5000 a year just meeting regulatory requirements. Red tape is feeding into poor multi-factor productivity which the ABS says fell 4.2 per cent in the four years to June last year. In August, The Economist Intelligence Unit ranked Australia as the second worst of 51 countries for productivity growth ahead only of Botswana! For instance, the now-suspended Olympic Dam project required an environmental impact statement running to 29 chapters and 51 appendices that took three years to prepare. Applicants for the government’s paid parental leave scheme have to read 30 pages of instruction and complete a 48 page form like a tax return only without the benefit of a group certificate. This is typical of the extent to which people’s business and personal lives now involve ticking boxes rather than doing things. Under the Coalition, every significant government agency and department will be required to quantify the costs that their reporting and compliance regimes impose. Every agency and department will be given an annual target for red tape cost reductions – cumulatively at least $1 billion a year – that will have to be met if senior public service bonuses are to be paid. Under a Coalition government, every cabinet submission will once more contain a regulation impact statement that quantifies the compliance costs imposed and contains matching compliance cost cuts. Every year, there will be a Deregulation Report tabled in the parliament and two sitting days will be dedicated to the repeal of redundant legislation and review of regulations. To ensure that deregulation is taken seriously, I will take responsibility for deregulation out of the Department of Finance and into the Department of Prime Minister and Cabinet so that it will be a whole-of-government focus. If the people running businesses have more time for innovation because they spend less time on paper work, productivity will go up. That’s why the deregulation measures announced today are such an important productivity boost. If workers spend less time in traffic jams they will have more time at work and more time with their families. That’s why our commitments to get WestConnex built in Sydney, the East West link in Melbourne and the Gateway extension in Brisbane as well as to duplicate the Pacific Highway well within this decade, and to fund infrastructure on the basis of published cost-benefit analyses, are further important boosts to productivity. If businesses large and small are competing on a genuinely level playing field where the most cost-effective products dominate markets regardless of who supplies them, our productivity will go up. That’s why our root and branch review of competition laws is an important productivity initiative. If the public schools and public hospitals that comprise more than 5 per cent of our total economy are more responsive and efficient, productivity will improve. That’s why community controlled public hospitals and independent public schools, where individuals have a stake in the institution and a say at the board table, are also a productivity measure. If more women are in the workforce our economy will be more productive. This means addressing the impediments to greater employment for women with families. We need a better childcare system that’s less geared to 8-to-6 institutional care and we need a fair dinkum paid parental leave scheme that gives women a better chance to combine families and careers. Australia is one of only two countries where parental leave isn’t based on people’s actual wage. If people receive their actual wage while sick or on holiday, they should also receive their actual wage while on parental leave. Parental leave, after all, is supposed to be a workplace entitlement, not a welfare one. Strategies to improve participation must also include people currently on welfare. The best form of welfare is work. That’s why more work for the dole for unemployed people and more rigorous analysis of disability pension claims to try to keep people attached to the workforce are also good for productivity. If there are fewer strikes and if unions are better governed, our economy will be more productive. That’s why restoring the Australian Building and Construction Commission; ensuring that union officials and company officials face similar duties, accountabilities and penalties; and addressing the militancy, flexibility and productivity problems arising from the Fair Work Act are also part of a productivity agenda. From day one, the next Coalition government will be as concerned to create wealth as to redistribute it. To restore confidence, people will need to know from day one that Australia is under new management. That’s why I’m announcing today a Productivity Priorities Working Group, to be chaired by Steve Ciobo, with Josh Frydenberg and Dan Tehan as deputies, to consult with business and community stakeholders on the implementation of our productivity agenda so that it can effectively be implemented from day one. Because no one owns the Liberal or the National parties, the next Coalition government will govern in the national interest, not in the interests of any particular section of the community. We understand, though, in a way that the current government palpably does not, that you can’t have strong communities without strong economies to sustain them and you can’t have strong economies without profitable private businesses. I will end the bad blood between government and business that is damaging investment and employment and that’s sapping the confidence that’s so important for every Australian’s prosperity. We will do government differently. We will talk to people before we make decisions rather than just recriminate about them afterwards. Today I announce that, if elected, the Coalition will establish a new Prime Minister’s business advisory council to meet three times a year. It will be chaired by Maurice Newman, the former head of the Australian Stock Exchange and Deutsche Bank and will include representatives from the manufacturing, agricultural, services and knowledge sectors as well as from the resources sector because we will need a strong five pillar economy when the mining boom is over. Not everything that’s good for business is good for Australia but what’s bad for business is very rarely good for our country. That’s why this council is important and will have its first meeting within six weeks of the swearing in of a new government. My colleagues and I understand that governing this country is an honour that political parties and politicians have to earn. That’s why we are presenting a real economic strategy with a real understanding of business and a real commitment to helping every Australian worker to be as productive as possible in addition to doing the standard opposition job of holding the current government to account. Australia is blessed with a benign climate, an abundance of natural resources, and people who respect each other and want to work together productively to make our country strong. We are a great people who know that we could make more of ourselves under a better government. My colleagues and I are waiting for our chance to make a difference. We hope that comes soon enough because our country is crying out for change.

Comments

    • Exec summary: Usual Abbot spiel of no substance and subliminal promises to erode worker rights in the name of productivity. The only utterance of substance was the following one-liner:

      “Businesses and individuals borrowing too much and living beyond their means were the root cause of the Global Financial Crisis. In trying to deal with its aftermath, governments don’t seem to have grasped that you can’t solve a problem caused by too much debt and deficit with yet more debt and deficit.”

      • Funny, because I thought that was also the cause of the doubling of “wealth” of Australians under the Howard Govt that he referred to…

      • That’s what happens when you have central banks promoting borrowing as a way to increase economic activity.

      • I might add that a true discussion of productivity would start with the taxation base in this country and come to a quick conclusion that a complete overhaul of the tax code is the best way to promote productivity – via shifting the taxation base further onto unearned economic land and natural resource rents. That is, incentivizing hard work through the reduction of corporate and individual tax rates is a no-brainer.

        Part of this solution would be a comprehensive land tax (ala Henry tax review) & a refiddled mining tax that is not just a politically bastardized version. Lowering tax on income/labour and capital is the solution while simultaneously stinging the rentiers.

        Remember that tax policy has previously encouraged productivity growth through cuts to the corporate rate from 46 per cent to 30 per cent between 1985 and 2004. If income tax rates are also significantly reduced further this encourages workforce participation and a more competitive nation by international comparison.

        So, while I am sure we will hear ad nauseum about ‘job/wage flexibility’, empowering business owners by cutting red tape, encouraging R&D etc, I am also sure that the silence around fundamental tax reform will be deafening from our Coalition and Labor muppets who allegedly represent the needs of all Australians in parliament…

      • “the silence around fundamental tax reform will be deafening from our Coalition and Labor muppets who allegedly represent the needs of all Australians in parliament…”

        Well put.

        As I had posted numerous times on this site, I am in favour of the recommendations spelt out in the Henry tax review. I already posted my position, more than once, on broad based land tax and on congestion tax (“they already do this in Singapore and it works well”). The only (rather minor) point to which I differ is on individual income tax.

        Dr. Henry recommends offering of 40% discount to investment incomes which will be added to one’s wages in an individual’s tax return. My proposal is to totally decouple investment incomes from wages, in which wages are taxed as they are now (indexed) and the investment incomes are taxed at a flat rate that matches the corporate tax rate (currently 30%).

        There are a few clear advantages to my proposal over the Henry’s recommendation, although back of the envelope calculation shows that the end results are remarkably similar (e.g., if one is in the top marginal tax rate of 45%, one will pay 27c on a dollar under Dr. Henry’s recommendation while 30c on a dollar under my proposal).

        My proposal is simpler, fairer and, most importantly, more evasion resistant. Under my proposal, there would be no point for one to subdivide one’s income into multiple entities or open an account in the names of one’s kids or relatives. Also, as a matter of principle, I see no reason for tax on investment (non- labour) incomes to be indexed; it should be taxed at a flat rate regardless of the size of one’s wages. In fact, it is telling that the Henry tax review itself had stated “In conjunction with introducing the discount further consideration should be given to how the boundaries between discounted and non-discounted amounts are best drawn to achieve certainty, reduce compliance costs, and prevent labour and other income being converted into discounted income.”

        In my view, Dr. Henry could go a bit farther and totally decouple wages (labour incomes) from investment (non-labour) incomes, once and for all. This would abolish negative gearing by default (which still remains in the Henry tax review).

        Granted, Dr. Henry’s recommendations in the review are not a final goal but rather an ongoing “process” toward a better system (read, e.g., his comments on inheritance tax). My sense is that the taxation system of future needs to progressively shift to more “stock-based” from the current overwhelmingly “flow-based” version as the population ages. But then again, I am too ahead of my time.

      • I hope Dr Henry has been reading. Not that he seems to have much sway with the present government.

      • What is the rationale for treating investment income and labour income differently ?

        (Apologies if this is explained in the Henry review, it’s been a while since I read it.)

      • D. A lot of the capacity to use income spitting mechanisms has already been removed. Putting income in children’s names is no longer viable, and discretionary trusts have been chipped away at by a range of provisions that limit loss flow through and non recourse loans etc.

        The capacity to change derivation through trusts (ie who the income is earned by) does exist to some extent with discretionary trusts but its not the same open slather of the old days.

        You point about taxing passive income at a flat rate actually comes down to how ‘progressive’ you want the tax system to be. Essentially a long and highly contested issue between the ‘market works’ and the ‘market doesn’t work’ ideologies.

        A progressive system taxes you more the more income you earn. There has been considerable and very erudite discussion on this and how it links with fairness over history – it’s not a new issue for society.

        Also remember if someone only wants the corporate rate on their investment income so they can shelter the profits and reinvest all they have to do is put them in a corporate vehicle of some description.

      • @ Alex Heyworth, drsmithy, aj,

        First of all, thank you for taking the trouble of reading my rather lengthy post.

        Aj. Thank you for your info. I am very happy with Dr. Henry’s recommendations, especially given that the end results (the bottom line potential revenues) are remarkably similar. If the corporate tax rate is cut to 27%, which appears the direction we are headed, there will be at least one income bracket that exactly matches my version. I just wondered, within the framework of Occam’s razor, would not it be better to go as far as I propose?

        Drsmithy, Dr. Henry did not quite spell out how he arrived at the 40% discount figure in his review (some discount is absolutely necessary because inflation takes away future purchasing power of passive income). So I am guessing; could it be that Dr. Henry had a system similar to mine in his mind and back-calculated the 40% discount figure to achieve more or less the same end result?

        Alex, I am pretty sure Dr. Henry already knows what I am talking about here, and I would be surprised if he did not consider it at some stage during his tax review. You can read between the lines that he wanted to go farther in a number of fronts but stopped short of putting them in his recommendations.

      • I might add, if the passive income is taxed at a flat rate, financial institutions can withhold taxes without the knowledge of one’s income. Individuals, in turn, will no longer be required to file a tax return on his passive incomes. The process would thus reduce the compliance costs.

      • Drsmithy, Dr. Henry did not quite spell out how he arrived at the 40% discount figure in his review (some discount is absolutely necessary because inflation takes away future purchasing power of passive income). So I am guessing; could it be that Dr. Henry had a system similar to mine in his mind and back-calculated the 40% discount figure to achieve more or less the same end result?

        It’s not the 40% figure I am wondering about, but the whole reasoning behind treating investment and labour income differently.

        Or, more simply, why shouldn’t investment income simply fall into the same tax brackets that labour income currently does ?

      • Unless you inherited a large sum to invest (the inheritance tax is another subject), the money you invest must have come from your wages which was already progressively taxed once.

      • ” the money you invest must have come from your wages which was already progressively taxed once.”

        In the same way as money you spend has already been taxed once, and we all pay the same rate of GST.

      • History shows economic booms usually start with tax cuts! If you reduce output tax then that puts a GST increase on the table… Last time I was in the UK VAT was 17.5%

        Cutting red tape would mean reversing the Nanny-State we currently endure at all levels.. A reduction in that tax payer funded overhead would reduce Government bloat and possibly allow tax cuts.

        Abolish the middle class welfare that is negative gearing and stamp duty and create a land tax… The ACT have already started along this path and with the other states on downgrade watch, how long before they follow?

  1. “actual wage while on parental leave.”

    I fail to see why a lower wage mother would “deserve” less parental leave than an executive.

    all the other crap is the same as usual, deregulation as code word for lower wage for the 99% and gain for the 1%.

    We ve seen how that s work in US, pauperisation of the society at whole.

    Australia has few issues but the biggest one is the ineptitude of its politicians, they are all pathetic.I know the french system is far from perfect but at least there is a academic cursus to train politicians there (and it s bloody difficult but create an awful uniformity)

    • “all the other crap is the same as usual, deregulation as code word for lower wage for the 99% and gain for the 1%.”

      The standard myopic view.

      De-regulation also means making it easier, more profitable and provides incentives for employers, particularly in SME’s, to grow their businesses and create new jobs. I know that is viewed as a crazy idea by many , especially seeing as how these evil Capitalists just want to exploit the proletariat.

      Heaven forbid that risk takers and business owners too should benefit from investing their time, effort and wealth then taking on commercial and personal risk while doing so. No! Their primary obligation is to provide guranteed employment to their workers regardless and deliver taxes to Govt in order to fund other workers and non workers their rightful and entitled benefits.

      And yet , people still wonder why Business does not invest in Australia, why manufacturing shakes it’s head and leaves or closes down – unless it is Houses and Holes related?

      Truly amazing.

      • now now GSM you wouldnt want the leftist cohort on the site hear about economic realities… there parents told them they were special when they won their participation awards, and therefore we must reward them so

      • TS,

        In my worklife a large part of my day is devoted to constantly reassuring said children that they are doing just fine and that their “speshul” status is still intact 😉

      • Rather big talk for someone safely cosseted in the cosy embrace of the corporate luxury. Maybe leave the ‘this is what small business needs’ schlock to someone who puts their money where their mouth is eh?

      • aj,

        You dont know my history so get off your high horse. I have built and run 2 businesses (small) of my own in my lifetime. How about you?

        Corporate luxury? Just goes to show how little you really do know.

      • I work in finance.. And it’s big… And pretty luxurious… and goats like you that think you are more than just right time right place make me laugh

      • aj,

        Like I said, the parasite does occupy a special place, much better than all of us hosts.

        Your wrong of course. I am fully aware of my sheeple status as viewed from the lofty glass towers of “finance”. I wish I had learned it earlier than I did though I admit. Now on Monday at your teller window, smile and nod like a good boy.

        Enjoy your weekend 🙂

      • I will tks. Nice long one down here in melb – cup and all.

        My point being that there is a paradox that those most spiritedly defending ‘free’ markets are often just middle winners in what is a highly manipulated system.

      • aj,
        (Apologies, had to clarify)

        Wrong again. I’m not defending free markets – they are not free in any case as you know- being in finance and all.

        What I am attempting to defend is what I hope for my family’s future in an economy. With jobs , opportunity and thriving Businesses.

        Put simply, I know where my bread is buttered (as should we all) and I give and get in a fair deal. I acknowledge my fortunate place. That doesn’t stop me from recognising massive lost opportunity for Australia and the freeloading bludgers that hold us back.

      • My point being that there is a paradox that those most spiritedly defending ‘free’ markets are often just middle winners in what is a highly manipulated system.

        Ah, but that’s just because of the oppressive Government holding them back. Were it not for The Man, they’d be able to take their rightful place at the top, and trickle down on everyone else.

      • Gsm, you are quite belligerent in your views, but the policy settings that favour rent-seekers over industry and innovators are equally a product of both sides of politics.

        I am a rent-seeker because the policy settings of the government over many years (over alternate party rule) have made this a most lucrative career. Your naive view that it’s just over regulation and big government is just an expression of anger that the pack is stacked – and for mine the right has done as much if not more to stack the pack for big capital then the left has for big union.

        The game is rigged for the rent seeker – meh – what can ya do? Get on the bus.

      • Exactly, people whine and moan about ‘taking away workers right’, what about the rights of people to enter the workforce? What about the rights of businesses to spend their money as they wish?

        Anyone can start a business, it takes time, effort and money to build one that’s profitable enough to hire employees. Businesses don’t exist to hire people, they exist to make money and hire people to help them do so. Only profitable businesses hire workers.

        Yes workers should have rights at work, but these rights have to respect the fact that without the business, nobody has a job.

      • Businesses don’t exist to hire people, they exist to make money and hire people to help them do so. Only profitable businesses hire workers

        Profit share in Australia is at its highest margin in history.

        Business, in aggregate, has never been more profitable.

        This is also coupled with the fact labour is working its longest hours since Chifley mandated 40 hours weeks in 1947… only to see wage share decline since the 1970’s.

        One may assert that we have provided too much welfare to business, wrapped them up in too much cotton wool and protected them too much, that too many bottom feeders are now engaging their capital for the prospect of easy money.

        We’ve had two decades of labour taking the fall for business.

        EVERY.SINGLE.TIME.

        I mean, if they can’t perform under the current reward structures and environment, then we’re best off raising wage share and flushing out the economically unviable trash that populates our market.

      • RP,

        Go and start your own business champ. Let’s see how lefty you feel then. Until then, perhaps you shouldn’t display such rank ingnorance.

      • Some employers don’t want you to lower your salary, although you can be ready to work for less. The rate they charge their clients depends on your hourly wage rate. It is ridiculous what is going on in some companies.

      • Tend to agree GSM. Deregulation does not automatically mean a reduction in workers rights / wages. Deregulation also means rationalising the endless reporting and compliance regimens to local councils, state and federal government. The less time spent on unproductive activities should, in theory, result in that time being spent on running and developing the business. I’m in the APS and the internal governance and compliance regimes is simply stifling. On the other hand, if deregulation is used to subvert wages and conditions simply to maximise profit then any reform benefits will be lost in the midst of Work Choices like battle.

      • Wingy,

        While I’m sure your profession has it’s regulatory straightjackets but in the Mining biz you have regulatory motherlode.

        Between the Unions and Govt, Australia is regulating Business to death. And if Abbott gets in and doesnt attack it with a chain saw and a demolitin team then he deserves to have his backside handed to him.

      • You are right GSM. My concern is that with Minchin now gone there is no-one to keep Abbott on the straight and narrow.

      • $0. She doesn’t get a salary. But I do remember when Billy McMahon was getting Family Allowance, despite being a millionaire in 1970s dollars.

  2. What an intimidating slab of text. Not even any paragraphs to break it up.

    I’m not up for this challenge on a Friday afternoon.

    • *Hypocrisy Mode ON*

      Oh come now .. where’s your spirit of adventure? 😉 Bet you there’s at least 1 somnambulatory reference to a bank(st)er’s unquestionable wisdom. And/or the appointment of one to some new onanist advisory body comprised exclusively of every powerful corporate vested interest except small business, and generously financed by the taxpayer.

      • and not even a whisper about the cost of residential housing…

        A party criticising spin their capacity for paradox know no bounds!

    • Especially if you’ve already spent three hours at the pub like I have. 🙂

      Thank dog I didn’t drive or ride to work today.

  3. I will summarize for those too drunk to digest this afternoon:

    People are sick of Labor’s spin

    Here’s 10 minutes of Coalition spin

    Productivity, productivity, productivity

    Don’t mention the GFC !

      • I read it in less than 15 minutes. You must be a slow reader.

        A lot of what you might expect, bagging the current government’s inability to generate a surplus, etc etc. But quite a lot of good stuff in there as well, assuming that it is implemented as outlined in the speech.

        I look forward to it being fleshed out in the election campaign.

      • Nothing of the sort. It’s just spin. Incidental that it comes from Tony Abbott. If he wants to engage seriously on the issue of productivity and debt then he will have to do better than those motherhood statements.

      • I don’t think that’s the reason… just like the ‘Asian Century’ whitepaper it’s big on rhetoric but with no real presentation of the actual detail.

        Both the Govt and the Coalition are terrified of getting their hands dirty in providing details of their policies. Platitudes are the order of the day!

  4. A summary:

    An argument involving GSM and some other parties will lock this thread within 4 hours.

    • Sorry RP. My single comment for this thread is already up.

      Australians get what we deserve. I’m far more concerned with divining outcomes and profitting from that.

      • Yeah But..from the start GSM ,n to the End,n if single left you,you may end stumped..almost seems Targeted..Too,like Standing Tall in a field surrounded in sorry,taken …Tone’s Black-outs..youtube

  5. I’ve never read what a politician said and not about to start now. Mute them and learn to judge them from what they do instead of what they say, thats my motto. Learn economics to understand what they do.

    Abbot speach -> mute.

  6. It’s a good speech, details a plan and lets people know what the Coalition are about as opposed to Labour. I like the idea of paying bonuses based on deregulation and cutting spending.

    I don’t think this will stop the “Abbott has no policies” nonsense from his political opponents (not much could), hopefully we will get some more details going forward.

    • In fairness, I was pleasantly surprised by the inclusion of some concrete proposals which did not seem utterly nonsensical on their face.

  7. I’d swear that was compiled by a machine.

    In fact, I’m pretty sure all the parties around the world use the same speech compilation software.

    very cruel for a friday hnh 😉

  8. Ronin8317MEMBER

    There are a lot of keywords, but no policy beyond establishing a ‘Productivity workgroup’. It will share the same fate as the various ‘XXX forum’ under Labor, result in almost no change. It’s not zero, since the ta forum did remove the stupid tax concession given to oversea executives for living in expensive mansions.

    As to raising the maternity leave allowance for those with higher income, just how does that tie in to ‘less government spending’? It’ll cost 2.7 billions!!

    The carbon tax is rigged to blow up on any government that tries to dismantle it. You either remove the compensation to low income household, raise taxes, fire off a huge chunk of government employees, or run a deficit which will make even Labor looks good. I have a feeling it won’t be the first two, and I doubt it will be number three either..

    Olympic Dam is not a good example for removing ‘regulatory hurdles’ since it’s mining uranium. Uranium mining cannot be treated like other businesses, as there are substantial risk of radioactive contamination to the environment.

    Now that the Coalition poll have tanked, the LNP should bring back Malcolm Turnbull.

  9. Well that was interesting! Abbott came out & said something half relevant & most here have bagged it. And yet you were very silent when that Asia Town white paper crap came out. Blinkers? That Asia Town stuff was absolute waffle. I could have written that crap in the 1970’s (probably did).

  10. Jumping jack flash

    “… delivered more than 2 million new jobs, a 20 per cent plus increase in real wages and a doubling of Australians’ net wealth per person.”

    … by implementing Thatcherism and cleverly shifting public debt onto the private sector, facilitated with bucketfuls of cheap debt money sourced from overseas.

    The wages and jobs followed, bubbling away merrily on the back of spiraling debt and debt-induced demand.

    I can’t see how he can reference Howard’s economic miracle with a straight face knowing what we know today.

  11. Not a bad speech, as far as these sorts of things go. One glaringly obvious point – an Abbott speech is far easier to ‘listen’ to than a Gillard speech. He presents well in such fora – suggest Lib strategists take note.

    • Wait, I just remembered, speaking of an efficient education system. I was chatting with a co-worker from Germany. She went to school in Germany (primary & high school) and AUS (Tafe) and was supprised at the poor quality education system here. She said her language skills (despite English being her second language) and maths skills were far superior to her fellow classmates here, including students who went to private high schools.

      She said Germany had a 4 tier system
      1. Schools which were designed for students to go to Uni
      2. Schools for students who want to complete Year 12 but not go to Uni
      3. Technical Schools teaching trades-hands on
      4. I think the 4th one was Steiner schools which focus on innovation and creativity (Correct me if I’m wrong). (We have a couple of Steiner schools here.)

      She said you are fluent in 4 languages (german, english, latin (italian) and french) by the time you are in grade 6.

      Oh, and there are NO PRIVATE SCHOOLS in Germany. It is all an efficient public system. She was disapointed to see so many private schools here, she believed an education is a fundamental human right that all people should have access to no matter where you are in the class system.

      the problem with Aussies is we are deluded. In terms of culture, we think we are as productive and efficient as the germans, but in reality we are more towards the greek end of the productivity sprectrum. then we wonder why we cannot build things on time & on budget.