Ironically from by the AFR, kernel of evil for business parasitism, comes Productivity Commissioner Michael Brennan:
Productivity Commissioner Michael Brennan says destructive rent seeking and a lack of entrepreneurship by business has stalled productivity and wage growth and that trying to fix the issue won’t be helped by reform nostalgia or economic pessimism.
While business groups have already called upon governments to make urgently needed economic reforms to lift productivity, which has fallen from 2.2 per cent in the 1990s to minus 0.2 per cent now, Mr Brennan will say, in one of his first major public speeches delivered on Thursday, that a lack of investment and risk taking by business is where the problem begins.
Mr Brennan has also lambasted lobbying groups and their influence over governments for special treatment.
“Just as we should encourage dynamism through productive entrepreneurship in private markets, we should work to remove the destructive entrepreneurship of rent-seeking,” Mr Brennan will say.
If there has been one feature of the collapse of Australian public policy in the post-GFC period that I have been stunned by most deeply and often it is the swing to rent-seeking.
It began with Kevin Rudd’s bailout of the big banks in the GFC, was entrenched by the big mining coup that ended Kevin Rudd’s prime ministership, and it has been made a way of life by the mass immigration economic model that Kevin Rudd popularised. Now the results are now in:
While workers have steadily lifted productivity since 2003, capital productivity has been an unmitigated disaster as capital shallowing has trailed the shift from a diverse and productive economy to one that produces only dirt and house prices.
This shift has progressively required the capture of policy to continue:
- public support for over-leveraged banks;
- undertaxing of resources;
- mass immigration despite the collapse of every argument in favour of it.
It was John Howard that put these trends into action. But it was Kevin Rudd that entenched them when they were past their use by date.
It is remarkable how much damage that Kevin Rudd did to the Aussie economy in so short a space of time.
He is also a former gold trader and economic commentator at The Sydney Morning Herald, The Age, the ABC and Business Spectator. He is the co-author of The Great Crash of 2008 with Ross Garnaut and was the editor of the second Garnaut Climate Change Review.