The Charter of Budget Honesty requires that an IGR be produced every five years. The first IGR was published with the 2002-03 Budget. The second was published in April 2007. And today the third IGR was published.
It projects a huge increase in population. IGR 2007 projected a population of 28.5 million by 2047. This IGR upgrades that to 36 million by 2050 – effectively an increase of more than 25 per cent in the less than two years since the previous IGR.
That in itself is worthy of a blog – why should we trust the estimate of 36 million over that of 28.5 million? How can less than two year’s worth of data allow a lifting of the population estimates by 1/4? And what does this mean for the emissions reduction target (see my ealier post Population Estimates and the CPRS of 12 October 2009).
But the issue I want to raise is that of productivity growth. Because the Prime Minister and Treasurer have been recently banging away about the need to increase productivity growth. With that I agree. But their methods are likely to do the reverse.
To wit: spending large amounts of taxpayers’ money on so-called nation building infrastructure without cost-benefit analysis. And re-regulating the labour market, making it more expensive to hire people and more difficult to fire them.
Both of these policies are more likely to reduce productivity growth rather than increase it.
And it seems that the IGR 2010 agrees.
Hidden away on page 163 of the 164 page document (not counting the preliminary pages) is this gem:
The slower labour productivity growth is a technical assumption based on the historical 30-year average. This is 1.6 per cent annually, compared with [1.75 per cent] in IGR 2007.
Well blow me down. Isn’t the labour productivity projection in IGR 2007 also based on a the historical 30-year trend (it is: see page 28 of IGR 2007).
So what’s different? Only the past two years (and the first two years of the 30 year trend).
This seems to me to be an acknowledgement that Labor’s productivity agenda isn’t expected to work.
you regularly claim the labour market is re-regulated but produce no evidence.
It would be nice to see some.
Labour productivity figures are not the ones to look at.
Perhaps you should read Ross Gittins before commenting again.
Butterfield, Bloomfield & Bishop
1 Feb 10 at 2:51 pm
Get a load of these miscreants. They blow $42 billion on toilet blocks and then beat up oldies for holding the country back.
C.L.
1 Feb 10 at 2:55 pm
Perhaps you should read Ross Gittins before commenting again.
hahahahahahahhahahahahahahahahahahahahahahhahahahahahahahahhahahahahahahahahahahahahahhahahahahahahahahahhahahahahahahahahahahahhahahahahahahahahahahahahahhahahahahahahahahahhahahahahahahahahahahahahhahahahahahahahhahahahahahahahahahahahahahahahahhahahahahaha
Screw you homer. I just spilled a mouth full of coffee all over the screen and keyboard as a result of laughing so much.
JC
1 Feb 10 at 3:03 pm
Samuel doesn’t seem to understand of which productivity figures to look at. Neither do you apparently.
Gee CL I do not recall you saying that When Costello said exactly the same things in 2007.
funny about that
Butterfield, Bloomfield & Bishop
1 Feb 10 at 3:07 pm
Costello didn’t blow $42 billion on toilet blocks.
Funny about that.
C.L.
1 Feb 10 at 3:10 pm
Costello never faced a GFC ,funny about that and gee hardly any money on toilet blocks. Even funnier
Butterfield, Bloomfield & Bishop
1 Feb 10 at 3:21 pm
Rudd never faced a “GFC” either – as the IMF repeatedly (and correctly) predicted.
Funny about that.
C.L.
1 Feb 10 at 3:38 pm
“Perhaps you should read Ross Gittins before commenting again.”
Perhaps you should get an education.
Semi Regular Libertarian
1 Feb 10 at 3:47 pm
You’re right, it can’t work, Samuelj. I would actually bet that the piddly little former bureaucrat wouldn’t even know the definition of productivity and only used it because focus group polling suggested it sounded good. This is a total illiterate show-pony we’re talking about here.
JC
1 Feb 10 at 3:49 pm
“you regularly claim the labour market is re-regulated but produce no evidence.
It would be nice to see some.”
I’ll give you a tip Butters: Google “Fair Work Act 2009″.
Semi Regular Libertarian
1 Feb 10 at 3:50 pm
“you regularly claim the labour market is re-regulated but produce no evidence.
It would be nice to see some.”
That comment alone should put the moron in moderation for insulting everyone’s intelligence.
JC
1 Feb 10 at 3:56 pm
Butters – the use of labour productivity growth is pretty standard and used in Treasury, the OECD and elsewhere. Sure, multi-factor productivity (or total-factor productivity as some term it) would encompass other sources of productivity growth (and decline). But there are problems with the measurement of MFP. That said, the use of labour productivity is entirely consistent with measuring the impact of labour market regulation. As to the effect of re-regulating the labour market (and you’d have to be hiding your head in the sand to not realise that Fair Work Australia and “simplified awards” are not re-regulating the labour market), this is a standard result and well accepted in the economics profession. That is, increasing employment protection legislation is likely to reduce labour productivity growth (other things equal). You can check numerous OECD studies on this, and take the word of Ken Henry. Check out his speech here http://www.treasury.gov.au/documents/639/HTML/docshell.asp?URL=speach_%20main.asp among others.
Samuel J
1 Feb 10 at 7:01 pm
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