Productivity in the public service and government-funded industries has crashed to an 18-year low, and economists warn that pouring more taxpayer money into things such as disability and aged care will only serve to drag down living standards further across the board.
Employment in the public service as well as the education and care sectors has boomed over the past year, but the extra workers have not generated an equivalent increase in output, causing productivity to fall sharply.
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Michael Read is the Financial Review's economics correspondent, reporting from the federal press gallery at Parliament House. He was previously an economist at the Reserve Bank of Australia and at UBS. Connect with Michael on Twitter. Email Michael at michael.read@afr.com
