Thoughts on the border decision and QPC’s productivity reform livestream

First, better late than never I suppose, so I should be thankful the Queensland Government, on 1 December, will finally open up the state to Sydneysiders and let us travel to Sydney without having to endure hotel quarantine when we return. The Government still has big questions to answer, however, over the justification for its knee-jerk re-imposition of the hard border with NSW a few months ago. It won’t release any written advice from the Chief Health Officer justifying it, suggesting either there wasn’t any, or the case made for the border closure wasn’t particularly compelling.  

One organisation in Queensland that does care about evidence-based policy making is the Queensland Productivity Commission, and Commissioner Karen Hooper and her team deserve credit for an excellent livestream they ran today on Productivity Reform in Australia and NZ (see my 26 October QEW post). The forum featured eminent speakers from Australia and NZ, including national and state Productivity Commissioners. Apparently, the QPC will post the video recording in the future, but, in the meantime, I thought I should summarise the highlights.

  • Former Australian Productivity Commission Chair Gary Banks said workplace relations was a major priority for policy change in the interests of boosting productivity. He described our current workplace relations system as a “legacy of a bygone era”. Banks also raised doubts about elements of the federal government’s economic response to the COVID-recession. For instance, he questioned the Modern Manufacturing Strategy which identifies six sub-sectors (e.g. recycling, defence, space) to be prioritised without any legitimate rationale. He noted the problems Australia had in the past with the ‘picking winners’ strategy of assisting so-called infant industries. Unfortunately, infant industries subsidised by government may never ever grow up.
  • Victoria University Associate Professor Janine Dixon expertly demonstrated that the impacts of productivity improvements can be ambiguous regarding employment. This reminded me of Australia’s post-early-nineties recession experience. At the time, I recall, there was talk of a ‘jobless recovery’ and ‘five minutes of economic sunshine’, but years later we talked about the nineties productivity surge.
  • My former Australian Treasury colleague Jason McDonald, now at the Department of Prime Minister and Cabinet, nicely followed on from Janine Dixon and recommended a program of deregulation which would make it easier to do business and start new projects, meaning you could get both productivity and employment gains. It’s been announced that Jason will soon head up the federal government’s Deregulation Taskforce and I look forward to what he’s able to achieve in that role. It appears Jason is very annoyed by Australia’s overly restrictive occupational licencing laws and the lack of mutual recognition across states and territories in many cases. I hope Jason does some good work in this area and makes sure state and territory governments follow through properly on the National Cabinet’s agreement to have mutual recognition from 1 July 2021.
  • NZ Productivity Commission Chair Murray Sherwin stressed the importance of Productivity Commissions being independent agencies and being able to express their views freely. I should note this is something the Queensland Productivity Commission will probably lose when it’s merged into Treasury.
  • Australian Productivity Commission Chair Michael Brennan stressed the importance of having a flexible economy unhindered by burdensome regulation so that resources can be allocated to their most economically valuable uses as the economy recovers.

Finally, my only disappointment with the livestream (which I had to leave before the final session, unfortunately) was the panel discussion with the Productivity Commission Chairs, which was conducted at a very high-level and didn’t address what I thought was the big issue affecting the QPC: its probable loss of an independent voice once it’s absorbed into state Treasury, a plan which was announced by Treasurer Cameron Dick earlier this year. I submitted a question asking about whether it’s important for Productivity Commissions to be independent, but the panel discussion moderator didn’t ask the question of the Commissioners.

Overall, the livestream was well worth watching (and I’ll link to the recording once it’s available), so well done to the QPC. I very much hope it isn’t muzzled when it’s absorbed into Queensland Treasury.  

Finally, on 1 December, all NSW residents will be allowed into Qld without needing to endure hotel quarantine.

This entry was posted in IR, Macroeconomy, Productivity and tagged , , , , , , , , , , , , . Bookmark the permalink.

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