The irony of hosting a talkfest to improve national productivity hasn’t escaped commentary. If there’s more doing and less talking perhaps our productivity might increase. Having said this, the problems with our alarming decline in productivity are multifactorial and, yes, there are some policy complexities to address, but overwhelmingly the root causes of our problems don’t need a summit or Productivity Commission analyses. They are obvious and intuitively easy to identify and fix.
Essentially, productivity is a measure of volume and efficiency of output. Improvements in effort coupled with the intelligent application of capital and technology will naturally result in better productivity. It’s not overly complex, yet governments and politicians seem to want to make it so. This is perhaps because it avoids the blunt reality that as a nation, we simply aren’t working hard enough or smart enough. Hard work is often not rewarded at a micro level or macro level. Schools, workplaces and other institutions do not sufficiently recognise and reward endeavour and application. The reluctance to rank and recognise effort is a modern phenomenon in the anglosphere. Industriousness is insufficiently rewarded, so it’s not sufficiently strived for. Many workplaces seem to exist as a platform for meetings to occur rather than for good and services to made and rendered.
The aggregate result of this malaise is obvious. It’s not just our productivity that is going down the tubes. Our national literacy and numeracy levels are slipping alarmingly by international standards and even our physical fitness is dropping with ever-increasing levels of obesity and unfitness of our youth. All of this contributes to a drop in productivity. A less well-educated and less fit nation cannot hope to be productive.
Perhaps if our leaders were more vocal in extolling the virtues of hard work and effort and showed some leadership by themselves working more conspicuously harder it might catch on. Similarly, working smarter needs to be encouraged and rewarded through creating incentives for innovation and efficiency. Our current tax system operates in the opposite direction. Additionally, trying to drive the economy through the public sector, al a Victoria, is a doomed mission. The private sector is the engine.
In modern developed nations, productivity is fundamentally a cultural rather than economic measure. Countries with high productivity value hard and clever work and its citizens work generally harder than ours do. Optimism and confidence in our leaders and institutions also profoundly affect productivity. Employers also need to drive productivity and be supported in doing so. Paying harder and smarter workers more than their less productive counterparts needs to be applauded not discouraged by our legal frameworks and by union demands.
Politicians need to avoid continued abstraction and obfuscation in the public dialogue on productivity and not be afraid to offer the simple message that everyone needs to work a bit harder and smarter. The voter backlash against the coalition’s work-from-home policy brain explosion has probably caused fear, and been interpreted by pollies as a badly received productivity prod. But we need to be honest about why our productivity is slipping. I doubt WFH is a major cause, but it’s likely somewhere in the mix so can’t be ignored. Similarly, we can’t ignore the fact that despite major immigration numbers being said to be driven by a need to import skills and improve productivity, we are going backwards. AI and technology transition is also affecting productivity, but other nations are navigating these developments better than we are. Why does it take 30 to 40 per cent longer to build a new home today than it did 10 years ago?
Our leaders could usefully start the summit by publicly admitting that we aren’t putting enough collective effort in as a nation to be better and more prosperous. They also need to take responsibility for this problem and lead the way forward by creating economic incentives for hard work and for ingenuity and innovation rather than just talk about doing this. Businesses want to be more productive but can’t overcome poor policy settings.
We remain a stable and wealthy nation with abundant natural resources and a generally well-educated and highly capable population. We are also inventive and ingenious having produced many technological breakthroughs and inventions. Many of our universities are ranked in the top global echelon and we have produced some world-class businesses even with a relatively small population. We’re just in a slump. Our leaders should declaim our past achievements and future potential and foster optimism rather than culture wars and class envy. If we tackle some of these simple cultural causes, engage in some leadership and affirmative rhetoric, and back it up with meaningful tax and policy reform our productivity is likely to lift as quickly as it has dropped.
Andrew Christopher is a lawyer and writer
