Government can improve productivity by doing less

Most days I find myself nodding in agreement when reading Judith Sloan’s op-eds. Some days I find myself nodding in agreement when reading Peter van Onselen’s op-eds. Rarely, if ever, have I found myself agreeing with both on the same. Today is one such day.

Judith takes a big stick to the Productivity Commission:

The Productivity Commission immodestly calls its first five-yearly review of productivity Shifting the Dial, released this week and commissioned by Scott Morrison. I have another title for it: Shifting the Dial Backwards.

Take it from me, it’s 1200 pages of bureaucratic sludge. But amazingly, its most radical ideas — replacing stamp duty with land tax; turning pharmacies into automatic dispensing outlets (with a TAFE-qualified staff member in charge); transforming universities into schools; imposing a national carbon price and road-user ­charges — are rationalised in the space of a few paragraphs, often with reference to other institutions, particularly the Grattan Institute.

Judith is on fire and it gets better as she warms up to the task. The bottom line:

If there is one ominous theme that pervades the Shifting the Dial (Backwards) report, it is that more data will solve pretty much everything. More data is what central planners always want. With more data, those mistakes that politicians and bureaucrats routinely make can be eliminated.

And with more data, including in the hands of consumers, everything will be better. Don’t worry about privacy breaches, about self-serving analyses, about big brother watching over you. Forget principles, forget markets, forget the limitations of governments and bureaucrats — data will solve everything.

No one will deny that, along with most developed economies, we have a productivity challenge. And it would be great to have more efficient and effective health and education systems. But to think that even more detailed bureaucratic interference, piecemeal changes to taxes or getting rid of pharmacists are the solution is to be profoundly mistaken.

In a separate piece PvO identifies the problem – and, to my mind, fingers the productivity challenge facing developed economies, including Australia.

Universities prioritise research over teaching because they are incentivised to do so, by governments no less — indeed, in particular by the federal government, of which Morrison is a senior figure.

In other words, he and his cabinet colleagues are responsible for the system that rewards a focus on research over and above teaching in Australian universities.

No one in government should need a report to inform them of the effect of their own policy decisions. If Morrison thinks it’s a problem, change the policy. If he’s looking for someone to blame, find a mirror.

Let me repeat the money quote:

No one in government should need a report to inform them of the effect of their own policy decisions. 

Indeed. Yet here we are.  It’s probably worse than that. I suspect many people in Canberra have absolutely no idea that many of the perverse outcomes that we observe are precisely due to the design of the policies that they have dreamt up. The instinctive solution is more government intervention. Perhaps they should try doing less.

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14 Responses to Government can improve productivity by doing less

  1. Tel

    Five year plans from a Three Year Government… makes perfect sense once you understand the purpose is mostly blame shifting, pocket stuffing, and get the heck out of there.

  2. jupes

    … imposing a national carbon price …

    So just to be clear. The Productivity Commission recommends that CO2 emissions should be taxed.

    Rabz the fuckers.

  3. Ivan Denisovich

    If there is one ominous theme that pervades the Shifting the Dial (Backwards) report, it is that more data will solve pretty much everything. More data is what central planners always want.

    David Warren:

    My libertarian hero in this regard was Sir John Cowperthwaite KB CBE, financial secretary to Hong Kong through the 1960s, & perhaps the most significant figure in the recovery of the old Crown Colony from its condition at the end of the last World War. He pointedly refused to collect economic statistics. His reasoning was that, without numbers to play with, the “economic planners” would be at a loss. They were, & Hong Kong boomed.

    http://www.davidwarrenonline.com/2013/07/14/truth-numbers/

  4. RobK

    Perhaps they should try doing less.
    Indeed. In so many areas, much less would be much better. Let people use and develop their own initiatives. Re- Build a sense of community, self determination, dignity, resilience and resourcefulness.

  5. Rafe Champion

    I wonder what the 1200 pages of bureaucratic sludge cost?
    Not that it would matter much if it was just pulped.

  6. alexnoaholdmate

    Some days I find myself nodding in agreement when reading Peter van Onselen’s op-eds.

    Yeah, well… I’ve actually been running with the theory that Sinc is PVO since… oh, that night when Abbott got rolled for an even worse PM who has proceeded to do exactly the same things that justified Abbott’s removal, yet on a much grander scale.

  7. H B Bear

    van Wrongselen is on fire. Right twice in a week?

  8. True Aussie

    The taxpayer money paid to the parasites at universities could be much more productively used elsewhere. Defund all universities now and reinvest that money into on the job training, tafe and infrastructure projects.

  9. NB

    I don’t get it. They’re from the government and they’re here to help. What could go wrong?

  10. Ubique

    I can remember when the Productivity Commission produced half-decent reports. Plainly, it’s been successfully infiltrated, white-anted and subjugated by the Green-left.

  11. Billy Boy

    ” turning pharmacies into automatic dispensing outlets with a TAFE qualified staff member in charge”

    That is great idea. When I finished high school in the fifties those who became pharmacists were technical college graduates as were optometrists. My friends told me most of their time was making tablets on the tablet making machine and the optometrists spent a lot of their time grinding lenses — they were glass in those days. The pharmacists usually showed two qualifications, PhC and MPS being certificate in pharmacy and member of the pharmaceutical society. They wore white coats in the pharmacy to enhance their professional status. Because so many courses are now university based, the length of the courses are greater but do the graduates need all that extra time? Are they better able to type out the instructions on the label? I doubt it.

  12. Squirrel

    “Take it from me, it’s 1200 pages of bureaucratic sludge. But amazingly, its most radical ideas — replacing stamp duty with land tax; turning pharmacies into automatic dispensing outlets (with a TAFE-qualified staff member in charge); transforming universities into schools; imposing a national carbon price and road-user ­charges — are rationalised in the space of a few paragraphs, often with reference to other institutions, particularly the Grattan Institute.”

    I was particularly impressed by the suggestion (tucked away somewhere in an appendix) that because the ACT Government has thus far been able to get away with increasing annual property rates as an offset to ever-increasing stamp duty revenues, other jurisdictions would be able to get away with the same game – if only they tried. That’s the sort of advice that’s really worth paying for………….

    An organisation with the word “productivity” in its name might, instead, have asked why it is apparently necessary that conveyancing duties have been allowed grow to such a gargantuan aggregate sum in the space of a few decades – have there been productivity-enhancing reductions in the growth of other state government taxes? or has the money just disappeared into the usual black hole of ever-growing government?

  13. Shy Ted

    van Wrongselen wouldn’t write that if Labor was in power.

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