Australians robbed of half a million dollars each: Henry

Working Australians had been robbed $500,000 since the turn of the century by the failure of the country to find ways to get businesses and people to work smarter, the former head of the federal Treasury has revealed, saying the situation will get worse without substantial reforms.

Before the federal government’s productivity roundtable next month, Ken Henry, who headed a review into the tax system under the Rudd government and was pivotal to the introduction of the GST under the Howard government, said the nation’s children were being short-changed by a current generation afraid to make hard decisions.

Australian workers have been robbed of $500,000 by the slowdown in productivity over the past 25 years, according to former Treasury head Ken Henry.Credit: Dion Georgopoulos

Henry, the chair of the Australian Climate and Biodiversity Foundation, used an address to the National Press Club to argue the nation’s poor productivity performance would become worse if environmental laws were not overhauled to both reduce red tape and protect nature.

As Treasury secretary, he oversaw the first intergenerational report, released by then-treasurer Peter Costello, in 2002. After a sharp lift in productivity through the 1990s, the report assumed it could continue to grow over the next 40 years at around 1.75 per cent annually.

Instead, productivity has slowed both here and around the world. In Australia, it has averaged less than 1 per cent since the turn of the century and has been negative over the past two years.

Henry said as wages usually grew in line with productivity, the drop in productivity over the past 23 years had resulted in smaller pay packets for ordinary workers.

“The average full-time Australian worker has been robbed of about $500,000 over the past 25 years because of our failure,” he said.

“When I hear people say, we cannot do this to enhance productivity, cannot do that because it will hurt somebody, I think – give me a break. Who are we talking about here?”

Henry said that without a lift in productivity, workers and businesses would face higher taxes to cover the cost of services demanded by the community.

He said claims by some vested interests that protections to the environment hurt productivity simply did not stand up to scrutiny, noting the slowdown in economic growth over recent years even as more animal and plant species were pushed to extinction.

“If this is merely a contest between the environment and development, then somebody needs to explain why it is that, whilst the pace of environmental degradation has been accelerating, our economic performance has also been deteriorating,” he said.

“We should all be angry at our collective failure to design economic structures, including environmental regulations, that underpin confidence in a better future for our children and grandchildren.

“We have known about these problems for years now. Environmental policy’s ‘too hard basket’ is overflowing with important ideas. The too hard basket is an indictment of those who have been prepared to sacrifice the nation’s future.”

He made the comments as concerns were expressed over the damage being caused in South Australia, where a marine heatwave that started in September last year has decimated fish, sharks, rays, cephalopods and all manner of marine life. Thousands of dead fish have been washed up along the beaches of Adelaide.

Greens environment spokeswoman Sarah Hanson-Young on Wednesday demanded Prime Minister Anthony Albanese and Environment Minister Murray Watt lift their response to the unfolding marine disaster caused by sea temperatures being 2.5 degrees hotter than normal.

Albanese criticised former prime minister Scott Morrison’s decision not to meet with former fire chiefs to hear their warnings before the 2019 black summer fires. Hanson-Young accused Albanese – currently on a six-day tour of China – of a similar failure after his government rejected a funding request from marine scientists for funding to grapple with the damaging phenomenon.

“This toxic algae bloom is a national disaster, and it requires a national response. I call on the prime minister and his team to come to Adelaide, to stand on the beaches with me, and to take some action,” Hanson-Young, a South Australian senator, said.

Greens’ senator Sarah Hanson-Young says there would be national uproar if the disaster taking place off South Australia was happening in Sydney.Credit: Alex Ellinghausen

“If this was happening in Bondi or on the north shore in Sydney, the prime minister would have already been on the beach talking to concerned locals and the affected industry.”

Henry said experts had warned for years of the potential for a disaster now taking place in the waters off South Australia, but they had been ignored.

“What’s happening in South Australia with the massive destruction of marine life – that’s not an early warning. That’s a late warning. It’s a late warning,” he said.

“It’s well past time that we, and others in the world, dealt properly with the threats of climate change and the warming of the oceans, which I think from what I’ve read, lies at the heart of the catastrophe that is occurring there.”

Watt said the Albanese government was supporting the state government in dealing with the outbreak, including the secondment of the Commonwealth’s Head of International Environment, Reef and Ocean Division.

“While the science has made clear that there is no quick fix for the bloom, by having senior federal representatives on the ground we are supporting the SA government’s efforts with manpower, and ramping up our ongoing monitoring efforts,” Watt said.

“We will give careful consideration to any request for assistance we receive from the state government.”

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