Latest news with #ProductivityCommission
The Guardian
14 hours ago
- Business
- The Guardian
A three-day working week or higher pay: what a more productive economy could buy Australians
Australians would have a three-day working week if we had collectively decided in 1980 to spend all the productivity gains of the following decades on leisure time instead of buying more stuff, according to the Productivity Commission. Jim Chalmers has kickstarted a national conversation about reforming the economy to make Australia more productive to underpin the next generation of prosperity. There are plenty of disagreements about how this can be done, but there is general consensus that we should try. But another question has been left unasked: if we are successful in lifting productivity, what should we do with the dividends of our success? Or more simply: do we want to work less and spend the same, or do we want to work more and spend more? Looking at history, the answer has been a combination of the two, according to Rusha Das, a research economist at the Productivity Commission. In a new paper, Das calculated that Australians used only 23% of the productivity 'dividend' from the past 40-plus years to work less, while we banked the remaining 77% as higher income. 'Rather than spending our productivity dividend on more spare time, we have largely traded it for higher incomes, and more and better stuff,' Das said. This choice of how to spend the fruits of higher productivity is rarely presented to us in such simple terms. A typical employer doesn't ask if their staff want to work 5% less or have a 5% pay rise, for example. Sign up for Guardian Australia's breaking news email 'Instead, the effects of productivity gains are more subtly embedded in our lives, granting us more agency over how we live and work,' Das said. 'It may be taking a half-day each fortnight, investing time in professional development rather than taking on additional clients, or deciding to expand the number of cattle on a dairy farm. 'All these are choices that reflect the underlying freedom that productivity growth makes possible.' The economist John Maynard Keynes in 1930 famously predicted that technological advances meant his grandchildren would be working just 15 hours a week without being any worse off materially. Das said that prediction was not necessarily wrong, it's just that we have made different choices. 'With the growth in labour productivity Australia has enjoyed since 1980, Australians could have reduced their average hours worked by 15 hours per week without lowering consumption levels,' she said. Or we could have used all of the productivity dividend on working more and spending more – in which case GDP per capita would be 11% higher now than in 1980. Das said the choice between leisure and consumption can be influenced by a number of factors. Sign up to Breaking News Australia Get the most important news as it breaks after newsletter promotion If we feel like the changes that are making us more productive are short term, then we'll work more to take advantage of it while we can, and vice versa. Government policy plays a part – whether it's higher tax rates that disincentivise working that extra hour, or workplace rules that allow people more flexibility. Cultural values also have a hand, Das said. In France there is a strong tendency to choose more leisure time, while in the US it is the opposite, her research showed. 'For example, there is a saying that in the UK the last one to leave the office is seen as the hardest working, whereas in Germany the last one to leave is seen as the least efficient.' And these values change through time. Next year will mark a century of working five days a week, after carmaker Henry Ford reduced it to five days from six. As we approach this milestone, more companies are implementing or trialling four-day working weeks, while the Greens before the May election launched a four-day work week policy. Das said keeping up our high levels of work 'could be a good thing if it reflects greater voluntary participation in the workforce': workers choosing to improve their living standards, or it's the result of removing historical barriers that have held some segments of society back. 'But it is concerning if Australians have been working more out of sheer necessity, sacrificing study, rest or time with loved ones just to maintain their standard of living. 'For example, people may need to work more just to keep up with rising house prices, which has outpaced wage growth over a long period of time.'
The Guardian
2 days ago
- Business
- The Guardian
What could Albanese do to improve productivity? Here is a short, non-exhaustive list
In his address last week at the National Press Club, the prime minister announced a 'productivity roundtable' in concert with the Productivity Commission's latest inquiry into the issue. I won't be at the round table, but I do have a few ideas. First off, remember that productivity is the amount you produce with the hours and equipment you have. Work better with what you have or (usually) get better equipment to do your work faster, and productivity increases. It is not about reducing the cost of producing things. Getting paid $10 less an hour to do the same amount of work does not increase productivity even if your employer is more profitable. Unfortunately, productivity is often confused with profit and so business groups argue the key is lower company tax. They claim this will increase investment in things that increase productivity (such as new equipment or new buildings and structures). The evidence, though, is pretty nonexistent. The massive 2017 Trump company tax cuts, for example, which cut the federal US company tax rate from as high as 35% to a flat rate of 21% did bugger all to spur investment: If the graph does not display click here Hopefully the Productivity Commission will heed the advice of the current productivity commissioner, Danielle Wood, who in 2018, wrote that cutting the company tax rate would 'see national incomes go backwards for six years'. And income is really what productivity is about – specifically workers' income and their living standards. In theory, the real value of how much you earn an hour should rise in line with productivity. In the 1990s this mostly happened, but from 2000 onwards workers have missed out: If the graph does not display click here So, when worrying about productivity, we must remember to ask who benefits. But what could the government do to improve productivity? Here is a short, non-exhaustive list. This year, the government will pay about $10bn in diesel fuel rebates to mining and transport companies and the agriculture sector. By 2028-29 it will be $13bn. Despite growing almost as fast as the NDIS, we never hear the government talk about needing to rein in the expense: If the graph does not display click here But the fuel tax credit not only encourages use of fossil fuels, it creates a disincentive to investment in more efficient, and productive new vehicles – such as electric trucks. Research and development is vital to produce new equipment and technology (such as electric trucks). But the Australian government spends much less on R&D than most other OECD governments: If the graph does not display click here The government in April extended the $20,000 instant asset write-off for small business. This was purely a political rather than economic decision. Rather than encourage investment in productivity enhancing equipment, it is mostly a tax rort to buy big utes. How do we know this? Well, last week the AFR's wealth reporter, in a column about avoiding paying tax, described the instant asset write-off as 'a favourite perk of small businesses and sole traders'. They ain't lying. What else is a bad productivity investment? Residential land. It adds bugger all. But Australians devote far too much capital to property – almost 2.5 times that of the US: If the graph does not display click here Our tax system encourages this with the 50% capital gains tax discount and negative gearing, while also reducing housing affordability. The Parliamentary Budget Office estimated that removing the tax discount and negative gearing on investment properties would raise about $13.35bn in 2025-26. Dental health hurts the economy and reduces productivity because workers avoid going to the dentist because of the cost and end up with chronic issues that reduce output. A public system would be much more productive because it would massively reduce the cost hurdle for workers. The PBO estimated that putting dental into Medicare would cost $13.7bn. Rather conveniently for us, that is essentially the same as removing the CGT discount and negative gearing. By the same token, we know health systems that are dependent on private health insurance, such as in the US, are unproductive because the resources devoted to them deliver worse outcomes than public health: If the graph does not display click here Australia's health system is generally well regarded, but a recent report noted that we faired quite poorly when it came to access to care. Private health insurance is not a productive industry – consider the hours and expense devoted to marketing that yields no extra benefit. The same goes for private schools and the fees people pay fees. A 2022 study found that private education does not improve a student's academic performance. More resources devoted to no better outcomes is the essence of poor productivity. Currently both are exempt from GST, which effectively incentivises people to spend money on them (as does allowing donations to build structures in private schools to be tax deductible). Including both within the GST would deliver revenue that could go to improving productive public schools and hospitals, while repairing the shrinking tax base of the GST. Best of all, because richer households spend more of their income on both private school and private health insurance, the tax would actually be progressive. If the graph does not display click here Controversial? Of course. Which is why a government would also want to announce something huge – like say dental in Medicare. Productivity is an ongoing issue, but the key is to always think about who benefits from changes, and that the solutions are not about increasing profits or offshoring labour or reducing workers' pay, but should always be about making people's lives better. Greg Jericho is a Guardian columnist and policy director at the Centre for Future Work
ABC News
2 days ago
- Politics
- ABC News
Albanese government's tougher childcare safety rules don't go far enough
As tens of thousands of pages of regulatory childcare documents continue to pour into NSW parliament exposing systemic failures including abuse, neglect and expired or missing Working With Children Checks, the Albanese government has released a new suite of child safety measures. Touted as "tougher child safety rules" and backed by every state and territory, the new measures include 24 hour mandatory reporting of abuse, a vape ban and stricter rules on technology use in childcare centres. While any change is better than none, parents, educators and experts say the reforms are tokenistic, a Band-Aid fix, and ignore the deeper structural failures festering in the childcare system. To put it into perspective, the reforms steer clear of more substantial issues such as establishing a national childcare commission, as recommended in September 2024 by the Productivity Commission, or conducting an independent review into the National Quality Standards and its oversight body, the Australian Children's Education & Care Quality Authority (ACECQA). Nor do they address the growing calls for a national Working With Children Check (WWCC) system, despite the arrest and conviction of paedophile childcare worker Ashley Griffith, whose case exposed dangerous gaps in child protection, particularly the fractured and inconsistent nature of WWCC across states and territories. Critics say these incremental announcements, dropping every few months since the ABC's investigation into the $20 billion childcare sector, are a clear attempt to avoid a royal commission or full parliamentary inquiry and instead offer piecemeal fixes while sidestepping the deeper reckoning many argue the sector urgently needs. The previous reforms included getting tougher on centres that fail to meet the national quality standards from opening new Child Care Subsidy approved services and taking compliance action against existing providers with "egregious and continued breaches". The NSW regulatory documents, which are slowly being released following a call for papers by Greens MP Abigail Boyd, reveal widespread issues including deficient documentation, highlighting deeper failures in training, oversight, and accountability across the early childhood workforce. The documents offer a rare glimpse into what's happening behind closed doors in centres across the country, exposing patterns that go far beyond isolated incidents. Boyd said she sees nothing in the reforms that would prevent the types of horrific incidents she reads about every day in the regulatory documents. "Instead we get these piecemeal reforms that just tinker around the edges and don't face, head on, the systemic problems that have been created by allowing big companies to prey on our children for profit." She said until there is significant systemic reform, there will continue to be neglect and abuse of children and exploitation of workers. "The kind of reform that will re-establish trust in services and restore the sector to one where children are prioritised and workers are respected." In the three months since the stories first aired, thousands of parents, insiders and experts have contacted the ABC, painting a disturbing picture of a sector in crisis. Chey Carter, a former childcare worker and now an industry consultant said if we don't fix the structural issues that drive poor quality and impact child safety, little would change. "If we don't address the foundational issues then we are building compliance on top of dysfunction," she said. Carter, who previously worked for Affinity Education, a major provider owned by private equity, said the real threats to child safety often come from organisational decisions that prioritise profit, convenience, or optics over care. "We cannot legislate our way out of a culture that silences those who raise concerns," she said. Affinity has come under increasing scrutiny after 7.30 obtained leaked footage showing a childcare worker at one of its centres repeatedly slapping a baby and laughing. The footage was posted on Snapchat and reported by a concerned parent who saw it. In a recent workforce survey Carter conducted for NSW educators, 34 per cent of respondents said they had avoided reporting serious child safety concerns due to fear of retaliation. Many described being punished, isolated, or having their hours cut after speaking up. "I witnessed a staff member physically hurt a child," one respondent said. Another said: "I provided a written statement and was told by the second-in-charge that she would follow it up… Following this, my working hours were drastically reduced." And another was quoted saying they reported an incident to the Department of Education and the director started treating her differently after the department came out and investigated. "It was clear the complaint came from me." "If we don't address the foundational issues then we are building compliance on top of dysfunction," she said. Carter said supervision was another serious issue raised in the survey. "Workers told us they are routinely expected to manage unsafe ratios, often left alone with groups of children leaving them unable to safely respond to incidents," she said. The National Quality Framework Review of Child Safety Arrangements Report highlighted that in 2022-23 inadequate supervision was the second most frequently breached section of the National Law. "Being alone with children isn't just a supervision issue, it's a serious child protection risk," Carter said. A common theme in the answers of survey respondents was the chronic staff shortages in the sector. "It's become normalised for one educator to be left alone with an entire group of children when another staff member needs to step away — even just for a bathroom break," one respondent said. The brutal reality is Australia's childcare sector is now dominated by for profits, with more than 73 per cent of long day care operated by the private sector, including private equity, listed companies and investment bankers. It has created unintended consequences as too many centres put profit before care. Centres cut corners by skimping on food, gaming staff to child ratios by rostering just enough staff to meet minimum legal ratios on paper, even if it compromises supervision, overusing trainees and casuals to keep costs down, and some spend less than $1 a child per day on food. It has also created so-called childcare deserts, which are areas deemed financially unviable. These are typically lower-income or regional communities where high overheads and lower fee-paying capacity make it unattractive for for-profit providers to set up services. The result is families left with long waitlists, no access to early learning, and in some cases, parents forced to leave the workforce due to a lack of care. A parent whose child was sexually abused by a predator at childcare, who can't legally reveal her identity, said the mandatory reporting of 24 hours was appropriate and should never have been seven days. But she said it doesn't address the lack of understanding of what should be reported, whether childcare workers should rely on four year olds to disclose their own abuse, employment and visa insecurity. She said the centre her child was at had a policy in place regarding the use of personal devices and service issued devices. "Having policies does not mean that there is a culture of doing the right thing and consequences for doing the wrong thing," she said. "All of it is lots of good sounding words, but pointless without appropriate regulations, changes to legislation, funding for regulators, better screening and monitoring of providers and childcare workers, regulation rather than voluntary compliance and proper consequence," she said. Georgie Dent, the chief executive of The Parenthood, a parent advocacy organisation representing more than 80,000 parents, carers and supporters, said to ensure children's safety and wellbeing there needed to be systemic reform. "There is no question that monitoring educator behaviour is an important safeguard," she said. "But we must also confront the underlying reality — that the current system enables business models where profit can be prioritised over children's safety and wellbeing. "Surveillance alone will not protect children in a system that too often rewards cost-cutting and corner-cutting." She said safety quality, access and affordability needed to go hand in hand. "Band-aid fixes won't deliver the kind of early learning system that every child and every family in this country needs." She said the way to fix it was to reform funding. NSW regulatory documents that the ABC has gained access to in recent months highlight damning evidence the sector is broken. Last year in a southern Sydney suburb, a compliance direction was issued to a childcare centre after allegations emerged that it failed to meet legal obligations, including accusing two educators of child protection breaches. The notice said the nominated supervisor and other staff were aware of the allegations but failed to report them to the Office of the Children's Guardian. It said most staff interviewed by the regulator did not know they were legally required to report such allegations. It said one long-term staff member had worked at the centre for 15 years without ever being informed of her child protection responsibilities. It told the centre it needed to set up processes including "provide evidence that all staff have participated in training around the existence and their obligations under child protection law… reporting via the Department of Communities and Justice and the Office of the Children's Guardian as required." It said failure to comply with the notice was $2200. At a childcare centre near Tamworth in NSW, a March 2024 investigation examined allegations that an educator engaged in inappropriate physical contact by lying next to a child during sleep time and placing an arm across their body. A second educator saw the incident but failed to recognise the interaction as inappropriate and failed to report the matter, according to the documents. Until the sector has meaningful reforms, more of these hideous incidents will continue against children who have no voice. As the National Children's Commissioner Anne Hollonds says: "child safety should never be compromised for commercial or government administrative reasons. Currently we are taking unacceptable risks with the safety of our youngest citizens."
The Advertiser
4 days ago
- Business
- The Advertiser
How different would Australians feel if the system was behind them instead of on top of them?
This government has made it clear, lifting productivity is a top priority. Assistant Minister for Productivity Andrew Leigh has been charged with the complex task, supported by the Productivity Commission, top economic thinkers promoted into cabinet and the productivity roundtable in August. Leigh's recent speech at the Chifley Institute cited housing and infrastructure as two areas we have to get moving. He outlined some hard truths about bureaucracies, referencing "slow, fragmented and overengineered" systems that were no longer fit-for-purpose. And, along with that, he outlined the public service capability we need to lift productivity and be fit for the future. One of Leigh's solutions is to remove friction in critical processes - redesigning systems where "coordination should be the rule, not the exception". This plays out across the social services system - an interconnected web of payments, supports and programs that costs more than $200 billion each year. Services and supports are fragmented - government departments don't talk to each other, providers compete for funding, levels of government don't work together. Finding the right door to the right service at the right time is more the result of luck than a feature of design. Rigid eligibility criteria keep people out, allowing issues to worsen. Over time, shame, stress, trauma and financial hardship compound with generational impacts. This system is managed with a focus on cost savings and risk management. Complex rules ask people to navigate eligibility and lots of paperwork with penalties for stuffing it up. This is meant to ensure efficiency but, because of a lack of collaboration, effort and dollars are wasted and the opportunity to lay the foundation for future productivity - by investing in human capability - is lost. The Workforce Australia inquiry found a system overwhelmed by "red tape, compliance requirements and pointless mandatory activities". A careful management of risk underpins this madness, assuming harsh penalties keep jobseekers looking for work. But several recent studies show how the punitive nature of this approach is doing more harm than good. A 2022 Applied Economics Letters paper found that jobseekers in employment services took longer to find employment, spent less time in work and earned less per hour. The evidence is that big sticks don't help people build skills and find jobs. Disrupting compliance-heavy approaches isn't easy. In its 2024 Review of the National Agreement on Closing the Gap, the Productivity Commission proposed accountability mechanisms with more "bite" and "timely and appropriate consequences for failure" as a way to make progress towards the vision. But jumping through more hoops and introducing more top-down accountability won't cut it. What's needed is a different approach - one built on partnerships grounded in trust. In The Careless State, Mark Considine concludes that top-down approaches in social services haven't worked over the past half-century, despite being given "ample opportunity". Mr Leigh's analysis is that "systems that push decisions upward, delay risk, and rely on external consultants to validate internal judgment" are too cumbersome to solve today's problems. He suggests that the course-correction for "institutional risk-aversion isn't institutional recklessness, but capability". This amounts to a $200-billion opportunity to shift the system from compliance to alliance - working with people when they need support rather than putting them at the back of the queue. A government that is serious about lifting productivity should be taking a hard look at this. MORE OPINION: The Centre for Policy Development's recent report, Embedding Progress, suggests orienting the public service around whole-of-government wellbeing goals for the nation and provides a roadmap for how to do this. To begin, we need a clear vision of what we're trying to achieve. Services should focus on helping people and communities thrive - giving children a strong start, supporting access to housing, securing fair work, and building skills over time. This would enable more people to contribute to the economy and lead better lives. We also need a well-coordinated approach to changing hearts and minds, but also new approaches to delivery. Reimagining employment support means first moving away from the assumption that everyone is trying to game the system. And then we need to give employment services workers - those on the frontline - the flexibility to help people into roles that are local and matched to their skillsets and aspirations. Imagine the difference if people felt the weight of the system was behind them instead of on top of them. And, these shifts will require a different type of leadership. We need more political leaders to take to openly encourage environments where failure isn't hidden and covered up. Instead of "fear - of failure, of blame, of reputational damage" being the driver of over-regulation, our ability to learn from failure should become the source of innovation and the foundation for future productivity. Aligned with Andrew Leigh's analysis - there are no transformed social services without a transformed public service. If productivity is the goal, we need to invest in a new type of public service capability and we need a new type of political leadership to stay the course and go the distance. This government has made it clear, lifting productivity is a top priority. Assistant Minister for Productivity Andrew Leigh has been charged with the complex task, supported by the Productivity Commission, top economic thinkers promoted into cabinet and the productivity roundtable in August. Leigh's recent speech at the Chifley Institute cited housing and infrastructure as two areas we have to get moving. He outlined some hard truths about bureaucracies, referencing "slow, fragmented and overengineered" systems that were no longer fit-for-purpose. And, along with that, he outlined the public service capability we need to lift productivity and be fit for the future. One of Leigh's solutions is to remove friction in critical processes - redesigning systems where "coordination should be the rule, not the exception". This plays out across the social services system - an interconnected web of payments, supports and programs that costs more than $200 billion each year. Services and supports are fragmented - government departments don't talk to each other, providers compete for funding, levels of government don't work together. Finding the right door to the right service at the right time is more the result of luck than a feature of design. Rigid eligibility criteria keep people out, allowing issues to worsen. Over time, shame, stress, trauma and financial hardship compound with generational impacts. This system is managed with a focus on cost savings and risk management. Complex rules ask people to navigate eligibility and lots of paperwork with penalties for stuffing it up. This is meant to ensure efficiency but, because of a lack of collaboration, effort and dollars are wasted and the opportunity to lay the foundation for future productivity - by investing in human capability - is lost. The Workforce Australia inquiry found a system overwhelmed by "red tape, compliance requirements and pointless mandatory activities". A careful management of risk underpins this madness, assuming harsh penalties keep jobseekers looking for work. But several recent studies show how the punitive nature of this approach is doing more harm than good. A 2022 Applied Economics Letters paper found that jobseekers in employment services took longer to find employment, spent less time in work and earned less per hour. The evidence is that big sticks don't help people build skills and find jobs. Disrupting compliance-heavy approaches isn't easy. In its 2024 Review of the National Agreement on Closing the Gap, the Productivity Commission proposed accountability mechanisms with more "bite" and "timely and appropriate consequences for failure" as a way to make progress towards the vision. But jumping through more hoops and introducing more top-down accountability won't cut it. What's needed is a different approach - one built on partnerships grounded in trust. In The Careless State, Mark Considine concludes that top-down approaches in social services haven't worked over the past half-century, despite being given "ample opportunity". Mr Leigh's analysis is that "systems that push decisions upward, delay risk, and rely on external consultants to validate internal judgment" are too cumbersome to solve today's problems. He suggests that the course-correction for "institutional risk-aversion isn't institutional recklessness, but capability". This amounts to a $200-billion opportunity to shift the system from compliance to alliance - working with people when they need support rather than putting them at the back of the queue. A government that is serious about lifting productivity should be taking a hard look at this. MORE OPINION: The Centre for Policy Development's recent report, Embedding Progress, suggests orienting the public service around whole-of-government wellbeing goals for the nation and provides a roadmap for how to do this. To begin, we need a clear vision of what we're trying to achieve. Services should focus on helping people and communities thrive - giving children a strong start, supporting access to housing, securing fair work, and building skills over time. This would enable more people to contribute to the economy and lead better lives. We also need a well-coordinated approach to changing hearts and minds, but also new approaches to delivery. Reimagining employment support means first moving away from the assumption that everyone is trying to game the system. And then we need to give employment services workers - those on the frontline - the flexibility to help people into roles that are local and matched to their skillsets and aspirations. Imagine the difference if people felt the weight of the system was behind them instead of on top of them. And, these shifts will require a different type of leadership. We need more political leaders to take to openly encourage environments where failure isn't hidden and covered up. Instead of "fear - of failure, of blame, of reputational damage" being the driver of over-regulation, our ability to learn from failure should become the source of innovation and the foundation for future productivity. Aligned with Andrew Leigh's analysis - there are no transformed social services without a transformed public service. If productivity is the goal, we need to invest in a new type of public service capability and we need a new type of political leadership to stay the course and go the distance. This government has made it clear, lifting productivity is a top priority. Assistant Minister for Productivity Andrew Leigh has been charged with the complex task, supported by the Productivity Commission, top economic thinkers promoted into cabinet and the productivity roundtable in August. Leigh's recent speech at the Chifley Institute cited housing and infrastructure as two areas we have to get moving. He outlined some hard truths about bureaucracies, referencing "slow, fragmented and overengineered" systems that were no longer fit-for-purpose. And, along with that, he outlined the public service capability we need to lift productivity and be fit for the future. One of Leigh's solutions is to remove friction in critical processes - redesigning systems where "coordination should be the rule, not the exception". This plays out across the social services system - an interconnected web of payments, supports and programs that costs more than $200 billion each year. Services and supports are fragmented - government departments don't talk to each other, providers compete for funding, levels of government don't work together. Finding the right door to the right service at the right time is more the result of luck than a feature of design. Rigid eligibility criteria keep people out, allowing issues to worsen. Over time, shame, stress, trauma and financial hardship compound with generational impacts. This system is managed with a focus on cost savings and risk management. Complex rules ask people to navigate eligibility and lots of paperwork with penalties for stuffing it up. This is meant to ensure efficiency but, because of a lack of collaboration, effort and dollars are wasted and the opportunity to lay the foundation for future productivity - by investing in human capability - is lost. The Workforce Australia inquiry found a system overwhelmed by "red tape, compliance requirements and pointless mandatory activities". A careful management of risk underpins this madness, assuming harsh penalties keep jobseekers looking for work. But several recent studies show how the punitive nature of this approach is doing more harm than good. A 2022 Applied Economics Letters paper found that jobseekers in employment services took longer to find employment, spent less time in work and earned less per hour. The evidence is that big sticks don't help people build skills and find jobs. Disrupting compliance-heavy approaches isn't easy. In its 2024 Review of the National Agreement on Closing the Gap, the Productivity Commission proposed accountability mechanisms with more "bite" and "timely and appropriate consequences for failure" as a way to make progress towards the vision. But jumping through more hoops and introducing more top-down accountability won't cut it. What's needed is a different approach - one built on partnerships grounded in trust. In The Careless State, Mark Considine concludes that top-down approaches in social services haven't worked over the past half-century, despite being given "ample opportunity". Mr Leigh's analysis is that "systems that push decisions upward, delay risk, and rely on external consultants to validate internal judgment" are too cumbersome to solve today's problems. He suggests that the course-correction for "institutional risk-aversion isn't institutional recklessness, but capability". This amounts to a $200-billion opportunity to shift the system from compliance to alliance - working with people when they need support rather than putting them at the back of the queue. A government that is serious about lifting productivity should be taking a hard look at this. MORE OPINION: The Centre for Policy Development's recent report, Embedding Progress, suggests orienting the public service around whole-of-government wellbeing goals for the nation and provides a roadmap for how to do this. To begin, we need a clear vision of what we're trying to achieve. Services should focus on helping people and communities thrive - giving children a strong start, supporting access to housing, securing fair work, and building skills over time. This would enable more people to contribute to the economy and lead better lives. We also need a well-coordinated approach to changing hearts and minds, but also new approaches to delivery. Reimagining employment support means first moving away from the assumption that everyone is trying to game the system. And then we need to give employment services workers - those on the frontline - the flexibility to help people into roles that are local and matched to their skillsets and aspirations. Imagine the difference if people felt the weight of the system was behind them instead of on top of them. And, these shifts will require a different type of leadership. We need more political leaders to take to openly encourage environments where failure isn't hidden and covered up. Instead of "fear - of failure, of blame, of reputational damage" being the driver of over-regulation, our ability to learn from failure should become the source of innovation and the foundation for future productivity. Aligned with Andrew Leigh's analysis - there are no transformed social services without a transformed public service. If productivity is the goal, we need to invest in a new type of public service capability and we need a new type of political leadership to stay the course and go the distance. This government has made it clear, lifting productivity is a top priority. Assistant Minister for Productivity Andrew Leigh has been charged with the complex task, supported by the Productivity Commission, top economic thinkers promoted into cabinet and the productivity roundtable in August. Leigh's recent speech at the Chifley Institute cited housing and infrastructure as two areas we have to get moving. He outlined some hard truths about bureaucracies, referencing "slow, fragmented and overengineered" systems that were no longer fit-for-purpose. And, along with that, he outlined the public service capability we need to lift productivity and be fit for the future. One of Leigh's solutions is to remove friction in critical processes - redesigning systems where "coordination should be the rule, not the exception". This plays out across the social services system - an interconnected web of payments, supports and programs that costs more than $200 billion each year. Services and supports are fragmented - government departments don't talk to each other, providers compete for funding, levels of government don't work together. Finding the right door to the right service at the right time is more the result of luck than a feature of design. Rigid eligibility criteria keep people out, allowing issues to worsen. Over time, shame, stress, trauma and financial hardship compound with generational impacts. This system is managed with a focus on cost savings and risk management. Complex rules ask people to navigate eligibility and lots of paperwork with penalties for stuffing it up. This is meant to ensure efficiency but, because of a lack of collaboration, effort and dollars are wasted and the opportunity to lay the foundation for future productivity - by investing in human capability - is lost. The Workforce Australia inquiry found a system overwhelmed by "red tape, compliance requirements and pointless mandatory activities". A careful management of risk underpins this madness, assuming harsh penalties keep jobseekers looking for work. But several recent studies show how the punitive nature of this approach is doing more harm than good. A 2022 Applied Economics Letters paper found that jobseekers in employment services took longer to find employment, spent less time in work and earned less per hour. The evidence is that big sticks don't help people build skills and find jobs. Disrupting compliance-heavy approaches isn't easy. In its 2024 Review of the National Agreement on Closing the Gap, the Productivity Commission proposed accountability mechanisms with more "bite" and "timely and appropriate consequences for failure" as a way to make progress towards the vision. But jumping through more hoops and introducing more top-down accountability won't cut it. What's needed is a different approach - one built on partnerships grounded in trust. In The Careless State, Mark Considine concludes that top-down approaches in social services haven't worked over the past half-century, despite being given "ample opportunity". Mr Leigh's analysis is that "systems that push decisions upward, delay risk, and rely on external consultants to validate internal judgment" are too cumbersome to solve today's problems. He suggests that the course-correction for "institutional risk-aversion isn't institutional recklessness, but capability". This amounts to a $200-billion opportunity to shift the system from compliance to alliance - working with people when they need support rather than putting them at the back of the queue. A government that is serious about lifting productivity should be taking a hard look at this. MORE OPINION: The Centre for Policy Development's recent report, Embedding Progress, suggests orienting the public service around whole-of-government wellbeing goals for the nation and provides a roadmap for how to do this. To begin, we need a clear vision of what we're trying to achieve. Services should focus on helping people and communities thrive - giving children a strong start, supporting access to housing, securing fair work, and building skills over time. This would enable more people to contribute to the economy and lead better lives. We also need a well-coordinated approach to changing hearts and minds, but also new approaches to delivery. Reimagining employment support means first moving away from the assumption that everyone is trying to game the system. And then we need to give employment services workers - those on the frontline - the flexibility to help people into roles that are local and matched to their skillsets and aspirations. Imagine the difference if people felt the weight of the system was behind them instead of on top of them. And, these shifts will require a different type of leadership. We need more political leaders to take to openly encourage environments where failure isn't hidden and covered up. Instead of "fear - of failure, of blame, of reputational damage" being the driver of over-regulation, our ability to learn from failure should become the source of innovation and the foundation for future productivity. Aligned with Andrew Leigh's analysis - there are no transformed social services without a transformed public service. If productivity is the goal, we need to invest in a new type of public service capability and we need a new type of political leadership to stay the course and go the distance.
Sydney Morning Herald
5 days ago
- Business
- Sydney Morning Herald
I'm a working mum. Here's why I oppose Labor's universal childcare
Like every other parent I know right now, one of the biggest expenses in my budget is childcare. Of course, I greatly value it because it allows my partner and I to work, and offers amazing benefits for my child. But seeing how much we fork out on this service every week makes my stomach drop. Since 2006, the cost of childcare has risen across Australia by 48 per cent for couples and 76 per cent for single parents. In Victoria alone, the current average fee for childcare is $145 a day before subsidies. So it's hardly surprising that for years now, people have been desperately calling for more to be done. And when you combine those numbers with the facts that I'm both a working mum myself and passionate about making women's return to work easier, you might think I'd be all for the government's plan to introduce universal childcare. But you know what? I'm actually not. There are a few reasons for this, and the first one is simple: the government's plan ignores expert advice, something I'm a big fan of. When the Productivity Commission looked into the government's proposed model - which would see childcare fees cost no more than between $10 and $20 a day for all Australian families - they found it would cost taxpayers an extra $8.3 billion each year, taking the annual total cost of childcare to $21 billion. They also found it would increase demand, potentially reduce the quality of care, cost taxpayers much more than the commission's suggested model, and would not be equitable. Their report to the government spelt this out plainly, stating: 'A disproportionate share of the increased government support would go to the families whose incomes are in the top 25 per cent of income distribution.' In other words, those who need the least help stand to gain the most. Surely the goal should be to have a policy that is universally beneficial, not just universal in name. So what was the alternative proposal? The commission suggested maintaining the existing system but changing the eligibility criteria, so that families earning less than $80,000 with one child and families earning up to $140,000 with multiple children in childcare can receive three free days of care each week for 48 weeks per year. They also recommended removing the subsidy for families with a combined income of $580,000 or more. This model would cost an additional $4.7 billion annually – $3.6 billion less than the government's plan.
