Producitivity blather cover for corporate tax cut?

First, we can’t talk about productivity without talking about the immense potential of new technologies such as artificial intelligence. On some measures, Australia is lagging in adoption. It is critical that our regulatory settings in everything from privacy to industrial relations address the risks without putting unnecessary roadblocks in front of business adoption.

Second, we need to address the creep of red and green tape and make regulatory processes more efficient. 

Third, we need to continue to improve access to skills and education. Australia is a services-based economy, which makes “human capital” critically important for our productivity. This starts with ensuring teachers are well-equipped to give students the skills they need for further learning.

Fourth is supporting improvements in productivity in the rapidly growing care economy. Care services are labour-intensive; traditionally, productivity gains have been harder to come by. But new technologies provide some opportunities – robots that clear dishes and push around laundry in aged care are my favourite examples.

And fifth is tax reform. Most know that our tax system is complex. But it is also economically costly: we collect too much tax from inefficient sources and not enough from more efficient bases. There are a range of reforms that could be contemplated: replacing inefficient stamp duties with broad-based land taxes, income tax reforms that wind back concessions in return for reducing tax rates, or reforms to introduce more direct road user charging to better reflect the costs of road use and vehicle emissions. One reform I will put on the table is changing our corporate tax system to create sharper incentives for businesses to invest and expand.

OK then. I’m still a half-believer in AI and don’t think we should stand in its way. But if you are going to let it loose, then how about cutting immigration to ensure that labour doesn’t cop the brunt of the adjustment and all profits flow to capital?

Cutting red tape is always good and is a near-perfect motherhood statement.

Access to skills? I am also a believer in the long-term power of education to lift productivity. But is our tertiary sector fit for purpose as it aims for the importation of the lowest possible denominator of international students worldwide? No. So, again, where is the address of the critical role of immigration in suppressing productivity by lowering pedagogical standards and, indeed, replacing local training with even worse trained imported labour, most notably from India? In short, more motherhood statements.

The care economy is a productivity sinkhole. There is nothing you can do to change that. If we import robots instead of Indians, then fantastic, and just stay out of the way.

Ahhh, yes, tax reform. Damn good idea, that, but it will be completely ignored.

Except perhaps for a corporate tax cut, eh, Danielle?

We shall see, and this might be some investment allowance instead, but the history of the corrupt Grattan Institute is not good.

There is nothing here to shift the productivity dial, but that won’t stop the spread of the mantra “growth mindset” all over.

The simple truth of collapsed productivity is not even mentioned by Wood.

If you don’t address the immigration-led growth model, then you’re part of the productivity problem, not solution. Including:

• Slashing immigration to zero to fix the housing crisis.
• Lifting wages to boost investment.
• Debottlenecking infrastructure.
• Re-funding universities.
• Slashing interest rates and crashing the currency.

That will give a solid productivity lift quickly. Then use tax reform to drive it in the long term. Including:

• Raising taxes on mining and using the revenue as a tax cut for all other businesses.
• Smashing the gas cartel with export levies.
• Cutting negative gearing, capital gains discounts for housing and super concessions, and slashing income taxes with the money.
• Broadening the GST and cutting income taxes with the money.
• Fixing horizontal fiscal mismatches.

Finally, slash motherhood statements from key bureaucrats.

Productivity fixed!