Labor’s chance to prioritise better living standards

Growing the national pie to improve living standards and generate extra revenue to pay down debt and for the defences Australia needs in a dangerous strategic environment must be the government’s focus when parliament resumes on Tuesday. In an interview on the RAAF jet en route home from China, Anthony Albanese told Ben Packham that his priorities for the first sitting fortnight would be enshrining penalty rates and cutting student debt by 20 per cent, both election policies, and ensuring the safety of childcare. The first two populist priorities fulfil election policies but will not help business margins and the budget bottom line, respectively. Ensuring the safety of childcare is a hot-button community issue after recent horrifying revelations of serious abuse perpetrated against young children.

The main economic focus of the term will be productivity, as Jim Chalmers announced after Labor’s thumping election win in May. With Australia experiencing its worst labour productivity levels on record, falling 1.2 per cent in the past year, and with average productivity growth across the past decade limping along at the lowest level in 60 years, it is what the economy needs most. While business and the government are approaching the event constructively, the Treasurer and the Prime Minister need to insist that unions do the same. Ridiculous interventions such as those of the Australian Manufacturing Workers Union and the Australian Nursing and Midwifery Federation, declaring no confidence in the Productivity Commission and advocating its abolition, deserve to be dismissed. Likewise, as Greg Brown reports, do unions objecting to Reserve Bank governor Michele Bullock stating that real wage rises can be sustained only if grounded in productivity gains. The same applies to AMWU national secretary Steve Murphy wanting workers to receive longer holidays and shorter hours for the same pay. Mr Murphy puts shorter hours ahead of income and business tax cuts, claiming workers believe “paying tax is a good thing” as it funds government services and infrastructure.

Productivity Commission chairwoman Danielle Wood recently showed she had a better grasp of the benefits of productivity gains than those union leaders. In a presentation to the Australian Conference of Economists in Sydney in early July, she said governments should focus on clearing away red tape, which would unleash investment and the dynamism on which capitalism flourished by allowing “new ideas to be the feedstock of growth”. Had the productivity growth rates of the past been sustained, the average Australian would have been better off by $14,000 across the next decade, she told Tom Dusevic. “It’s harder than it should be to start a business, to build things and to innovate,” she said.

The opposition’s task in parliament will be to home in on significant economic issues such as straitjacketed industrial relations, where the government’s record has not helped the economy, especially small business. It also should question the principles and practical flaws of the government’s legislation to tax the unrealised capital gains of superannuation savers with balances of $3m or more, opposed by Labor luminaries including Paul Keating and Bill Kelty, and Dr Chalmers’s preparedness to work on the bill with the Greens, who want the threshold lowered to $2m balances, indexed.

Labor enters parliament on Tuesday on a high, with 94 MPs to outnumber just 43 Coalition members. It has gained ground since the May 3 election, with the latest Newspoll, published on Monday, showing Labor leads the Coalition on a two-party-preferred vote 57 to 43 per cent. And for the first time in 40 years, the Coalition’s primary vote has fallen below 30 per cent. As the Coalition seeks a path back to relevance, it would do well to guard against the productivity roundtable setting up a further tax-and-spend agenda.