Rudd pitches 'productivity pact'

By a staff reporter

Prime Minister Kevin Rudd has outlined an "unapologetically optimistic" vision for Australia's economy, advocating a new "productivity pact" between unions, government and business to manage the transition from the resources boom.

Mr Rudd said "the fact is in 2013, the China resources boom is over" and flagged a "crossover point" for the national economy.

"The truth is, if we are to drive a new national competitiveness agenda we need to have government, business and unions working as much as possible together - pushing in the same strategic policy direction for the overall wellbeing of our national economy," he told the National Press Club in Canberra.

"The core of this new national competitiveness agenda must be a common agreement among us all that we must lift our annual productivity growth rate to 2 per cent or better for the future."

Mr Rudd said the nation faces new global and national economic circumstances which demand Australians implement "a new national competitiveness agenda with a new sense of national urgency".

"These global factors frame the new economic challenge that Australia faces today: how to protect our jobs and living standards given that global growth is sluggish and now the Chinese resources is slowing,"  he said.

Mr Rudd outlined several key areas in need of policy improvement; domestic electricity price regulation in Australia; unintended rigidities arising in the labour market; Business productivity; government regulation of business; education, skills and training; infrastructure; and small business.

The restored leader said the economy was transitioning from an investment intensive phase in minerals and resources to a new phase focussing on other sectors, including the trade sector.

"Managing this economic transition is now a core task of national economic policy," he said.

Mr Rudd said Australians were seeking a discussion of "clear positive economic policy direction."

Electricity prices too high

Mr Rudd said he had met with the Business Council of Australia and the ACTU a number of times since he was returned as prime minister on June 26.

High on the agenda was electricity prices, which he said were too high by global standards.

"This affects the competitiveness of all firms large and small. Of course, it also affects individual consumers," Mr Rudd said.

"But before you all start reaching for your revolver on the carbon price, let's be rational about this - the carbon price at present contributes less than 10 per cent to national electricity prices."

Mr Rudd said the primary reason for electricity price hikes was national electricity regulation, which allowed excessive rates of return for publicly-owned transmission and distribution utilities which in turn were "cash cows" for various state and territory governments.

"Reforms are needed for the supply of competitively priced gas for Australian businesses and households," he added.

Rudd lashes absent Abbott

Mr Rudd delivered a scathing assessment of Mr Abbott toward the end of his Press Club address, saying his non-attendance at the proposed debate highlighted the fact he "just doesn’t understand economics". 

"Today, I wanted to debate the future of our economy," Mr Rudd said.

"Mr Abbott’s absence has made such a debate impossible."

Mr Rudd had challenged opposition leader Tony Abbott to a debate on debt and deficit at the National Press Club, however Mr Abbott declined.

He said the debate was the chance for Mr Abbott to defend his observations about the "debt and deficit crisis" under Labor.

"Instead, Mr Abbott decided to cut and run," he said.

"Run away from the facts."

"But keep pumping out the fear."

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Hey K.Rudd, so i guess we can start by abolishing the carbon tax and getting an immediate 10% discount off our sky high electricity prices. Then we can turn our attention to regulation and promotion of greater competition.
Nothing but good news the boom has done little but help make Australia in particular Perth one of the most expensive places in the world to live
Where does the Federal Government get their information? One thing that is obvious, it is not from the “Real World”. What Mr Rudd is doing is showing the whole world that our education system is badly flawed, if the Government can reach the conclusions they have and make the claims they continue to issue. Remove the Federal Government layer of regulation from State activities. Sure, unemployment will rise by around 270,000 but productivity will increase by around 3% [Conservatively]. Reduce the union influence and restrictions on how companies can manage their staff and “Optional” holidays, sickies and days off, and productivity will improve by a further 1.5% [conservatively]. That is at a Federal Level. For States, there is an equal level or number of limitations on productivity and efficiency, but we can only look at one level of change at a time.
So Mr Rudd is acknowledging that Labor has screwed the economy, and that they have been lying through their collective teeth to us for the past 6 years; call the election pls.
What is Little KRuddie trying to say? The Government of the past 6 years have been lying to us. I thought the Economy was strong (apart from the tax revenue shortfall and the $300 billion debt), I thought the Carbon tax did nothing to electricity prices, I thought MRRT was going to fund the budget forever..... well that's what they said. Surly the "previous" government wasn't a bunch of incompetents!!?
"The truth is, if we are to drive a new national competitiveness agenda we need to have government, business and unions working as much as possible together - pushing in the same strategic policy direction for the overall wellbeing of our national economy," Great vision by Rudd. Some members of the ALP have been advocating such a strategy for the last 40 years. In fact, Kirby as Chairman of the Law Reform Commission had papers published concerning responsible worker participation in management. This looks like the German model which is highly successful: http://en.wikipedia.org/wiki/German_model#Industrial_relations
Rudd can talk all he wants but the party he leads is a train wreck and all their brightest talent have left and won't work for him, so how is going to achieve all his dreams with no talent, a party rocked by fraud and theft (Thompson, McDonald) and controlled by unionists, plus a level of incompetence and waste that is unparalleled. Listening to politicians like him make promises makes me wonder if they think we are all total idiots with no memory. I for one have a good memory and won't be stupid enough to believe his crap.
Big on rhetoric and light on substance. It's a SNAFU.
About to be voted back into power by the great un-washed. And he knows it.
Those who don't believe that our educational system is sub-par by world standards need only check the quality of most online posts, where basic English literacy, numeracy and logical thought are rather hard to find. Gonski is right. And so is Rudd, in arguing that education is the only other way, apart from productive investment in modern equipment, to lift output per head in an economy. Management, unfortunately, has usually been obsessed with making speculative short-term 'gains' in productivity by cutting the workforce and driving the survivors ever harder. Perhaps greater profits might be achievable by cutting wages, returning to child labour or even slavery, but those avenues -- sadly blocked off by 'anti-business' labour laws -- do nothing for productivity. The greatest contributor to Australia's indifferent record in total productivity has been the persistent failure of lacklustre management to invest in world-class equipment, while blaming the consequently handicapped workforce for everything that goes wrong with the bottom line. Our capital productivity, in other words, has been atrocious when compared with the per-capita output of our workers. This is hardly surprising when a whole generation of managers has been brought up to believe that only short-term profits matter, and that those can best be achieved through financial engineering rather than through innovation and hard graft. As for electricity prices, the whole issue of the carbon 'tax' has now been played to death by the mollycoddled power companies and the Opposition. The huge rise in tariffs predated the introduction of carbon pricing by many years, and has been caused by supinely incompetent regulation which permitted gold-plating and wasteful duplication of the privatised corporates' transmission infrastructure. Those electricity producers or retailers that remained in State hands, especially in Queensland, have in effect become indispensable tax collectors, and they too have seized upon the 'Great Big New Tax' story to hide that unpalatable fact. Unfashionable as it may seem, Rudd has often been known to tell the uncomfortable truth. The courage to do so seldom buys popularity when pots are calling kettles black. It would be really helpful if the entrenched unions and corporates were to come out of their foxholes and think of themselves as potential allies in a darkening world, as he has entreated them to do.
hey you little albino wanka if you want to improve pruductivity then get off the stage and give the other side a go you meddled for long enough and now we are about to pay the price
Just another Rudd thought bubble.......it hasnt taken long to remind me of how much an idiot this man is. Lot of hot air, ill thought policy that kills people and more egomaniac grandstanding look at me moments. Labor must be starting to cringe at what this idiot will say next......they shouldnt have to wait to long.
Pious humbug. Look at his record . It is about time the press stopped reporting everything this man says without putting it into context but I suppose that is totally beyond the lazy quality of our press
As usual, those to the right misread, misinterpret, or just prefer to ignore the facts and figures. The economy and government finances are fine as I’ve pointed out at length many times in BS posts. We have GDP growth of 2.5% more than five years into the worst world economic downturn since the 1930s. We have relatively low unemployment and low inflation. The number of businesses was up nearly 9000 in 2011-12 (latest), employment is up 1.3% over the year (June on June, trend terms), retail trade is up 2.6% over the year (May on May, trend) and dwelling approval numbers are up 7.1% over the year (May on May, trend). We have a triple A credit rating from the three main credit rating agencies and the second lowest public debt (federal and states) to GDP ratio of the 34 OECD countries. The pattern of deficits is quite normal for a world economic downturn and is no different from those of the early 1980s (Coalition government) and early 1990s (Labor government). Swan got an award as best finance minister. The Howard government was named the most wasteful government by the IMF. Then there’s the Queensland example where the Liberal National government has been more wasteful than its predecessor (larger deficits). The Howard government had a dream run with the longest period of sustained world economic growth on record, yet in its last four years, spending rose by an annual average of 6.6% (ABS stats). In much more difficult circumstances, the annual average for the three years to 2011-12 was 5.4% (ABS stats). By the way, productivity rose by 2.4% from March quarter 2012 to March quarter 2013, despite all the talk by those to the right about the unions wrecking the place. In the year before that, it rose 2.3%. Since December quarter 2007, it has increased by 7.3%, which is not bad given we’ve had the worst world economic downturn since the 1930s. In the four years from December quarter 2003 to December quarter 2007, productivity rose 3.5%. These stats are from Trading Economics using ABS data: http://www.tradingeconomics.com/australia/productivity Abbott knows an election is coming up. He should stop making up excuses and come out and deliver his party’s policies so that the electorate have a good amount of time to make up their minds before the election. All he is doing is giving Labor the jump for some reason. The PM only has to give 33 days’ notice and the announcement is usually made only 5-6 weeks out.
Your post sounds awfully like a typically positive, green shoots galore, rainbows and bunnies spiel that the head in the sand kouk usually conjures up. Are you sure you're not related?
Now that is irony, you actually sound like an intelligent person yet you seem to believe this crap peddled by a well scripted leader of failed Labour party who have spent 6 years making decisions that show a level of waste and incompetence that has nearly ruined this county! We are on the slide and although it may have taken longer than other countries who didn't have the mining industry we do, it is happening right now before our eyes if you care to look. Any good position this country has achieved has been in spite of this incompetent bunch of fools and would have been much greater under a Government that contained some talent and ability.
Did Kevin tell you to write that. It sound like a KRudd rant. Lots of words, not much substance and complete distortion of realty.
Anyone seeking a substance-free rant need only look at the last three "contributions".
Anyone seeking a substance-free rant need only look at the last three "contributions".
Like I said, those to the right just don’t like facts and figures, as evidenced by the three posts above. Not a fact or a figure in sight. Just rants and opinions with nothing to back it up.
(Q) What did Rudd do differently to all other western governments who also pump-primed their economies, yet still fell into recession? (A) Nothing. The truth is that there were other unique factors that guided the Australian economy through the GFC. (1) Our resources exports that kept cash flowing through our economy. (2) Our 4-pillar banking system (originally 6-pillar and established under Hawke-Keating) but refined and tightened under Howard-Costello. Our banks were regarded by previous Australian governments as fundamental to the strength of our economy and regulated accordingly, with minimal exposure to the sub-prime toxic loans that sank the large US banking institutions. (3) The massive surplus of $23billion and near zero net debt that Rudd-Swan inherited. None of which have anything to do with any action by Rudd. Many other western governments did what Rudd did – yet their economies tanked. This great stimulus package he implemented actually saw much of the money go to (manufacturing) China, with retailers at the time admitting that profit margins were so small little of the money actually stayed in Australia. It’s another KRudd con.
But who benefits? Australia’s chapter of the debt-driven asset-price binge was facilitated by Hawke and Howard Laberals (as “Financial deregulation”) from 1983, to feed the greed of transnational capital, which in the post-war period had not enjoyed the disproportionate income and wealth to which it had for centuries been accustomed. Their policies were intended to and did allow profit to increase its share of National Income by expropriating the productivity surplus that workers were creating. Income-earners were pressured and persuaded to make up for that relative loss of purchasing power by indulging in an unsustainable consumption binge fed by debt borrowed from the wealthiest. Wherever possible, Right-wing governments owned as they are by Big Business worked to transfer risk and cost from business and government to individuals - privatisation of the pension, destruction of public health and education, unaffordability of housing due to its commoditisation and privatisation, etc. Productivity gains will be give-and-take, as it has been for the last thirty years – the workers give, the bosses take.
Rudd, and productivity in the same breath My god, none of the Canberra layabouts are value for money. None of them. Windbags all, where few could ever hold down an executive job in the corporations they unknowingly send to the wall, yet it is they who are supposed to foster the breeding grounds for business and industry. Instead, they have made it an onerous voyage to be an entrepreneur in Australia This sad lot needs to start right there in Canberra with a politicians productivity inquiry, where it will soon be found that actual achievements are of a low order indeed. Next, they need to run a broom through some of the truly stupid work place laws their union buddies have foisted on the costs of running business and industry. Perhaps even look to the US or Germany for viable models, because ours are not. Indeed, they discourage employment in favour of contractors, who can be bought and sold as a commodity On Rudds notion of getting energy bills down. For a start, a high percentage of the suppliers are now foreign owned corporate entities(if not governments), who now own what once used to be state assets. (So much for this so-called privatisation and free enterprise) Their sole mission in life is to price gouge Australian consumers for all they are worth. Indeed, do check the financial structures of these organisations, and watch their ebb and flow of money to get a handle on our high end user costs For instance .. read this. http://www.adelaidenow.com.au/news/opinion/bruce-dinham-former-etsa-boss-says-were-all-being-ripped-off-on-electricity-prices/story-fni6unxq-1226676683356 Rudd is a good whipping boy for these wild statements he comes up with - However, Abbott and his LNP cohorts are even slacker - they holding unanimous opinions that a return to the John Howard era of business as usual will be our saviour. That is, sell even more Australian assets to keep the cash flow rolling in.
Guy Kennedy's post 15:00 is right, we need governments, business leaders and the unions working together, pushing in the same strategic direction. It was followed by a post from S Locke 20:33 saying that the party Rudd currently leads is a train wreck. That comment is also right. Rudd is certainly saying the right things, but can he pull it off. With this team I doubt it. He would also have to diminish union power within the industrial relations sector, again very improbable. I also noticed that Guy mentioned the similarity in thinking to German economic model, Germany arguably being a world economic powerhouse. The big difference between Australia and Germany, at present, is Germany's manufacturing sector, Australia doesn't really have one, well a buoyant successful one anyway. And this is the problem facing Rudd, can he reduce union interference in the workplace, bearing in mind Gillard allowed union interference to flourish and grow. As I have said many times, unions don't create jobs. Australia needs both domestic and foreign investment to create jobs but unfortunately not many are prepared to invest in Australia. A survey in about 2010 showed Australia had ten time more the industrial episodes than the US. Those of the left keep saying that this union intervention goes to preventing work place health and safety incidents, and is a good thing. The US doesn't have any more WH&S issues then Australia, so are the unions being pedantic. Well if they are, and I believe they are, it's costing us jobs, and money. That's what Rudd has in front of him, to turn that around. But then if you listen you will hear the unions already squealing. That is also probably why he put through those party reforms, making it harder for the unions to get rid of him if he won the next election, just like they did last time. I also note by old mate Crispy still talks about how great our GDP to debt ratio is, compared to other developed countries. Crispy, you are aware our domestic product revolves around primary production, which has been for some time the mining industry. The boom is no longer here, although a drop in the Aussie dollar could see exports of minerals increase slightly, depending on world demand. Australia really has no secondary industry of note, other developed countries do. We import 80% of what we buy, we don't manufacture it, some other county does. We may be looking good a far as GDP to debt goes now, but as our major source of income diminishes, our GDP to debt ratio also diminishes, unless we reduce our debt, which is not happening, in fact it's growing. So Australia needs to develop other sources of income, for example manufacturing. And you can only achieve that via corporate investment. Rudd may see it, but can he achieve it.