With his third speech in little over a week, Josh Frydenberg is making a concerted effort to shake off his “invisible man” tag; now he just needs some substance to go with it. But when the government’s economic policy is “don’t just do something, stand there”, substance can be hard to find.
Frydenberg’s first speech was about Bretton Woods and the marvels of unaccountable internationalist bureaucracies multilateralism. His second was about how the housing market and state government productivity reforms would boost the economy. For the third, Frydenberg went back to that faithful stand-by of treasurers all the way back to Peter Costello — an ageing population.
Treasury can — and by the look of them, does — write such speeches in its sleep. Throw together life expectancy, the number of people aged over 100, the number of working people per retiree and the impact on the budget (concern about our ageing population and its fiscal impact has been a key driver of our retirement incomes policy — it’s why we have $2.8 trillion in super sloshing around the economy — and all the attendant tax and other rorts).
Once these boxes have been checked, it’s then time to invoke the mantra of successive governments and their Treasury officials: the three Ps — participation, population and productivity.
On productivity, of course, we’ve performed pretty shabbily, with the labour productivity surge under Labor giving way to years of flat or falling productivity under the Coalition. Frydenberg was honest enough to admit there’s a problem. His solution? “Our focus is on deregulation, skills, industrial relations and other micro-economic reforms to improve service delivery,” he said. Hopefully he remembers that productivity took a nosedive last time the Coalition deregulated industrial relations with Workchoices, but don’t count on it.
On population and participation, however, we’ve performed brilliantly, at least from Treasury’s perspective. Australia’s population has grown far more rapidly than the Howard government projected back when it first began producing intergenerational reports. And we’ve slowed the fall of workers per retiree by dramatically increasing the supply of temporary labour.
According to CEDA, the outfit to whom Frydenberg was speaking, under the Coalition the number of temporary workers in Australia has surged, driven by a dramatic increase in foreign students working in the economy, alongside working holidaymakers and workers here on various forms of temporary working visas, which the government is expanding.
The success on participation has been even more dramatic, and it is one of the few unalloyed triumphs of the Coalition government: our participation rate appeared to max out at around 65% in the years leading up to 2017. We could have confidently expected it to decline from there given the ageing of the workforce, but instead it has since risen to 66%, fuelled by a significant rise in female participation. That’s a direct result of the huge expansion in health and social care, and education, which the Turnbull and Morrison governments have helped fund.
Problem is, we’ve been too successful on population, in particular, and participation. In the Howard years, Joe Hockey defended measures to encourage women into the workforce by saying “we’re running out of workers”. But suddenly that’s not the case: despite years of strong jobs growth — even now, jobs growth is still above the long-run average — there’s no sign of running out of workers.
In fact, unemployment is stubbornly stuck above 5% when many other developed economies have unemployment below 5% and even below 4%. The Reserve Bank is well short of its objective of getting unemployment down to a level that will spark inflation — if anything, we’re drifting further away from it.
The result is, outside health and social care and education, the persistent wage stagnation that is punishing Scott Morrison’s “quiet Australians”. There are too many temporary workers, and too little enforcement of industrial relations laws to ensure they are paid the right wages. As a result, business uses them to undercut the wages of permanent workers (not to mention the impact on infrastructure and housing affordability).
More and more older workers — healthier and more active than previous generations — continue working into their 60s and even 70s, many because of debt, expanding the workforce. At 62.6%, the employment-population ratio is at a sustained historical high (it briefly touched 62.8% right before the financial crisis hit in 2008) and four percentage points higher than twenty years ago.
In light of six years of wage stagnation (which Treasury has endlessly forecast was about to end), it might be time we updated, or at least seriously reconsidered, whether the three Ps are still working for us.
Its a worry that successive governments are more interested in improving the numbers of imperfect economic measures like GDP and productivity instead of people’s lives.
As most well informed feminists will point out much of GDP growth has been from increased participation of women in the paid workforce (which is measured and counted in GDP) but at the cost of the unpaid work which is not counted in measures like GDP.
A significant amount of claimed growth is merely a transfer from uncounted to counted and not real growth. Look at childcare with the shift from at home to market economy commercial childcare, ditto for care of the elderly, disabled and infirm…even household meal perpetration is now more in the counted economy.
Similarly, women will point out that their labour in hours per week in paid and unpaid work has increased (not only weekly, but over a lifetime now women have paid work for the pension requirement from age 60 to 67). But men’s weekly hours (paid and unpaid) hasn’t increased with increased women’s participation in the paid workforce, and its men who benefit mostly from early retirement on publicly subsidised superannuation.
Likewise, getting the aged to work longer may improve the economic numbers, but its at the cost of aged and their families. Any counted improvement is just as likely to be imaginary.
It seems to me that the federal goverment is only really interested in mining all the economic surplus of families for the benefit of the users of the labour market, ie. capital, and getting more paid work from the aged is just the next step. Why not increase economic output by reducing the school leaving and minimum working age to 12 years, or increase the standard working week to 60 hours, or cut annual leave to 5 days?
At least they could use the measure of per capita GDP, vital at a time of steep population growth.
“Josh Frydenberg is making a concerted effort to shake off his “invisible man” tag; now he just needs some substance to go with it.”
Dammit Crikey. Another keyboard ruined!
Points well made, though not pointing out that keeping people working till they drop is the very easy solution for government, involving them doing nothing at all, which admittedly is their strong point.
But productivity metrics are barely worth collecting. They are proxies at best, and measure something, but nobody quite knows what, and they’re a distraction because some people obsess about them and give them undue meaning, like politicians, The Treasury and RBA.
Funny thing about real productivity though. As you get older it drops. It’s just reality. I’m closing on 58, as fit and healthy as the better in my age, work in a sedentary job as an analyst and I am shattered by the end of the week.
I wonder how those productivity figures will look when the workforce has lots of older citizens still working because they can’t afford not to.
We weren’t designed to be working (hard) for 50 plus years. Too much gives out. We may be living longer but often as much just extending the end years.
Work till you drop is as creative as it gets for these minds, but it’s a shit policy, the neoliberal will love it though, as will the boomers in senior management positions as it gives them cover for hanging around long past their use by date.
Actually the problem is not the ‘old workers ‘ but the lack of young workers – to-day the young don’t start work until they are middle aged – after they have spent a decade at a University doing nothing productive.
Let us bring back working age starting at 11 years old preferably in the mines, rather than going to counselling for ingrown toe nails every 3 weeks. If the younger population actually had jobs the pollies won’t be mouthing off about the old workers who have already contributed. Never mind enlightened Victoria euthanases their problems.
Over the last few hundred years we have seen enormous scientific and technological advances that have dramatically increased productivity in primary, secondary and now tertiary industries. In a fair society, the benefit of these productivity improvements should have been shared as a dividend to all of our citizens. Indeed, we should all have more leisure as these technological advances have contributed to meeting our essential needs. And, with less people needing to work, the problem of an aging population would seem to be a non issue.
However, the benefits are mainly linked to having a job, so we have seen people creating jobs that have little to do with meeting essential needs. Rather, we have seen a rise of “bullshit jobs”, and worse, industries that are parasitic on the real economy. There seems to be a negative relationship between the level of remuneration and the value of that job to society. Is a financial advisor, or an advertising executive, or property spruiker worth more than someone who teaches their children, or cleans their offices?
The inference that wage stagnation is not being experienced by the health and education workforce is I think not correct. State governments fight tooth and nail against any wage rises. Pity the public servants can’t have their wage rises assessed by the same independent tribunal as the pollies, then the wage rises of the rest of the workforce may follow.
Another comment that the Turnbull and Morrison governments are helping pay for the expansion in the health, care and education workforce is pretty tricky, seeing as they underfund all of these areas. Going so far as to pocket the underfunding of the ndis.
Wage stagnation in health and education is is because health etc. is expanding at the speed of light and nobody is watching the handouts, there are lots of policies, no management nor any limits to benefits – after an argument with partner, he /she or otherwise can see a doctor and immediate referral to stranger called psychologist for 10 talk sessions paid for by the government – rather than talking with family. After witnessing a car crash , instead of giving a statement to police -off to talk with mental health worker paid for by the government. Kids been naughty at school, well off to counsellor and then an assistant supplied to sit next to the child during class and if he feels naughty class stops and assistant and child go for a walk until ready to come back- eventually there will be more adults in the class room than children paid for by the government.
If our army has to go into war zone there will be a battalion of health workers for each platoon of soldiers. If the health worker is traumatised hearing unpleasant stories they then can have the same benefits Logistics these days means health workers, military lawyers to say who and when you can shoot. After service you can have carers , houses remodelled, if you miss out on a carer you can have a companion dog, cat, horse , snake, turtle, wombat.. But , good ‘vote ‘ catcher the weekly new benefit announcement by the Ministers for Health and Education. Health is becoming an economic cancer in Australia
Meanwhile there is no money to meet the real needs of the average worker, the average pensioner, the self employed .
No again we disagree Desmond there’s not necessarily 10 sessions, it depends on the assessment that is being made, this can often be problematic for those who have experienced real trauma/ mental health issues, who don’t have the money to get the help they need..
The fact that VETs are often so scarred by their experiences that the military may or have turned away from helping them earlier, due to this compounding trauma on trauma that it’s become entrenched, the amount of political drive to change how they help support returning veterans, has been pushed hugely as these people often come back so badly broken that they have per head of population grouping one of the highest levels of homelessness in our society, usually due to PTSD, or trauma that is usually deeply embedded..
There are numerous reasons for people needing help in regards to counseling, but they don’t always have the money to access it on a regular enough basis to help..
I see a counselor, because that is my training, I also have a lifelong rare chronic illness, that can cause other chronic mental health issues..
I can also assure you there isn’t an army of people that are there to work with these various groups, in my experience many people drop out of counselor training fairly early on, as it’s not for the faint hearted, too many people go to college thinking that counseling’s going to be a doddle, they usually manage up to a month & it’s too hard it can have affects on intimate relationships & family connections..
Yes the reason why therapist’s need to go & do regular supervision, is to prevents burn out & their work leaking/finding its way into their private lives, which can have a hugely detrimental affect as It can & has been known to have destroyed promising careers & have disastrous affects on the therapists loved ones along with their own mental well being..
My last observation I’ll leave you with this, is to those who have little to no understanding of what therapists, counselor’s hear often on a daily basis, you would cringe & most likely cover your ears & runawayscreaming, no!no!no..
Also unless you get paid not a huge amount to hear the most degrading or complete & utter horror stories that have often been people’s lives, it’s a case of “walking in someone else’s shoes”, you can’t really understand what a therapists/counselor’s world is all about..
Whether you like it or not, Mental health & the issues that arise out of it, have to be dealt with, money has to be found to fund these particular areas or strategies to work within this particular sector…
Mr Frydenberg may well wish to make himself more visible but he has a real problem of delivery. Whenever I hear him speaking I think that I fall asleep, or I am hypnotised by one of the most boring speakers I have ever heard!
Well he’s a lawyer, so he’s capable of droning on for all eternity. The only time I enjoyed seeing the boring leaner was when he was savaged by Jay Wetherill, the then SA premier. He still kept that stupid smirk on his dial.