'Miserable' wages linked to poor teaching that worsens skills gap

PRODUCTIVITY Commission chairman Gary Banks has said "miserable" wages are contributing to poor-quality teaching.

PRODUCTIVITY Commission chairman Gary Banks has taken aim at the education sector, saying "miserable" wages are contributing to poor-quality teaching that is exacerbating a skills shortage.

In an address to the Minerals Council of Australia in Canberra yesterday, Mr Banks said he had heard anecdotal accounts that some 457 visa holders were better trained than domestic workers. He attacked the increasing trend towards protecting struggling industries and called on the government to pursue labour market and tax reform, and cut unnecessary regulation and red tape to lift the productivity of those sectors of the economy facing the most pressure.

He debunked the theory that the costs of the mining boom would outweigh the benefits, saying this was "demonstrably false".

He called on the government to resist pressure to hold back on "growth-enhancing structural change" and criticised the political debate on economic reform.

Mr Banks said economic growth could not be realised without economic adjustment but these were neither easy nor painless. It was important the benefits of structural change and the trade-offs in different policies were properly explained to the community.

"Arguably this is not happening at present," he said.

His comments come in the wake of federal government bailouts for the automotive industry, the establishment of a manufacturing roundtable and a government push to increase pressure on major resources projects to increase the amount of domestic product they use.

The government has faced union pressure to protect manufacturing, which has been heavily hit by the high Australian dollar.

Mr Banks said that often governments ultimately were unsuccessful in stopping job losses in struggling industries and protection only lowered the overall growth in the economy.

He also warned that investments in renewable energy had reduced productivity in the electricity sector and higher energy costs had a "pervasive effect as an input across the economy". He said this was a crucial influence on productivity and competitiveness.

Mr Banks warned the threat to living standards lay not in the mining boom, which benefited and boosted the buying power of citizens and yielded large income flows, "but in the potential for misplaced policy responses".

He also took a clear swipe at green schemes on the eve of passage of the legislation setting up the government's $10 billion Clean Energy Finance Corporation.