Industrial relations ‘key to productivity future’: ACCI

Leading business group calls for workplace overhaul to boost living standards, after outgoing PS chief’s warning.

Australian Chamber of Commerce and Industry chief James Pearson. Picture: Kym Smith

Australian Chamber of Commerce and Industry chief executive James Pearson has backed outgoing Public Service secretary Martin Parkinson’s warning that living standards will fall unless productivity is improved.

Dr Parkinson told The Australian that political instability in Australia in the past decade may have also contributed to the falling productivity rates because of policy paralysis and investment uncertainty for business.

He blamed higher electricity prices on the 10-failure to achieve a bipartisan approach to energy and emissions policy.

Mr Pearson claims Dr Parkinson’s comments point to the need to do more on industrial relations.

“The Australian Chamber shares Martin Parkinson’s concern that weak productivity growth is a significant drag on the Australian economy,” Mr Pearson told The Australian.

“Labour productivity has declined over the past seven years contributing to slower wages growth.

“Weak productivity growth is a sign that we lag behind other countries in important areas such as improving workplace relations, cutting red tape and investment in R&D.

“Industry is keen to work with government to strengthen the productive muscle of the economy through policies that deliver practical reforms in workplace relations, effective investment in skills and infrastructure, and reduce red tape.”

Dr Parkinson’s comments were also endorsed by the Australian Industry Group, who called for a renewed emphasis on tax reform, education, training and energy policy.

Chief executive Innes Willox endorsed Dr Parkinson’s assessment that the nation had fallen behind in productivity terms in the past decade and this was a key reason the current sluggish economic performance.

Australian Industry Group Chief Executive Innes Willox. Picture: AAP

Mr Willox told The Australian today that Dr Parkinson’s warnings were right and that part of the solution was tackling energy and carbon emissions policy.

“Ai Group wholly agrees with Martin Parkinson’s assessment that, as a country, we have for more than a decade fallen behind in productivity growth,” he told The Australian.

“Our poor focus on productivity growth is a key reason for our current sluggish economic performance.

“In part, our lagging performance is due to complacency borne of Australia’s long-period of continuous growth but there are also other barriers that need to be overcome. Policy uncertainty, for example in energy and emissions, is one such barrier.

“Much greater emphasis needed to be put on a number of fundamental areas including education and training, energy, workplace relations, taxation and on policies aimed at developing competitive and dynamic industries.

“In this matter and throughout his outstanding career as a senior public servant, Martin Parkinson has been forthright, thoughtful and farsighted in his perspective and his advice.”

In a wide-ranging interview, Dr Parkinson said political instability in Australia in the past decade may have also contributed to the falling productivity rates because of policy paralysis and investment uncertainty for business.

“We have fallen behind in global productivity,” Dr Parkinson told The Australian. “For whatever reason, our productivity performance is not keeping up.

Dr Martin Parkinson. Picture: Sean Davey.

“Over the next decade, our living standard growth is going to fall; it has fallen, and will continue to fall partly as a consequence of the inevitable ageing of the population and the fact we are not getting the same boost to participation.

“But it’s also productivity performance.”

Scott Morrison has made productivity a priority reform over the next decade.

Treasury forecasts show the growth in living standards per capita continuing to decline since the early 2000s and falling to levels of about 0.5 per cent by the mid-2020s.

In a wide-ranging interview, Dr Parkinson said political instability in Australia in the past decade may have also contributed to the falling productivity rates because of policy paralysis and investment uncertainty for business.

“We have fallen behind in global productivity,” Dr Parkinson told The Australian. “For whatever reason, our productivity performance is not keeping up.

“Over the next decade, our living standard growth is going to fall; it has fallen, and will continue to fall partly as a consequence of the inevitable ageing of the population and the fact we are not getting the same boost to participation.

“I think (instability) has been quite debilitating for the development of good policy,” he said. “I wonder if we had more stable governments, whichever colour, which had a chance to own the policy domain for a while, whether or not we would have had more robust policies, better policies … had a business community with more confidence … to invest and take risks. I’m sure it has absolutely contributed to the erosion in public trust in institutions … we know that from work that has been done by various bodies.”