Part 3 Carbon Tax & Productivity - more policy failures
"It is largely the decisions made by individual firms in the Australian economy, and the interactions between them, that will drive productivity growth over coming decades," he said.
Describing poor productivity growth as Australia's Achilles' heel, Mr Argus says it has been camouflaged by the terms of trade. "That means productivity growth must play a greater role in improving living standards.
"In recent times, productivity has received greater attention in our political rhetoric, but we must be relentless in our focus on the issue if we are to secure the living standards of future generations."
Mr Argus's comments reflect wider disenchantment in corporate boardrooms with the quality of debate over public policy and the challenges confronting Australia.
They will also add weight to concerns raised by other corporate leaders recently, as he singles out two areas that have been lightning rods for business frustration with policy - industrial relations and the carbon tax - as being threats to productivity."
COMMENT Great point by Annabel Hepworth author:
Threats to productivity and our Australian standard of living. This is a serious failure of ALP + The Greens + Independents that formed this particular dysfunctional government.
Union interference holding back investment, bragging by ALP / Yeldub about the investment pipeline and I still maintain a lot will be a pipe dream. RIO nearly went under a couple of years back. Directors can be held personally liable for ruining shareholder wealth and are notorious for shelving development even partly into the process if trends change and the need arises.
Now add arguing with mining leaders - arguing in the public arena is not acceptable nor worthy of high office. No dignity no discretion and a huge policy (?) FAILURE. Or is it just a loose cannon going off in the heat of political spin season and therefore no policy is required? This DOES NOT engender business confidence or respect from voters. This is bad for investment as the world looks in at us. Hot money yes however it can leave just as fast - but not long term confidence to invest - a BIG negative.
The carbon tax - I think I have said enough about the inflationary effect but have I mentioned this obvious point? Inflation is a key point of focus for the RBA which may keep rates on hold if they measure it. This will maintain high interest rates - and ALP advocates DON'T show me historic charts get in present time and LOOK at global rates in the developed world and current conditions.
This is a negative for the banks who need rates to fall to protect their exposure to their over bloated over priced property books. It may attract some deposits and funding temporarily however as the wheels fall off our economy - exacerbated by policy failure - the AUD will sell off and the hot money carry trade will exit leaving a hole in bank funding. Mortgage holders need rates to fall too.
Tax a core cost like power and it will permeate through the economy as inflation. Now if oil falls we could have enjoyed a benefit if it translated to the pumps. More disposable income and less pressure on mortgages etc - however with power increasing some of this will be undone. This is just part of this policy failure as I have discussed before. And spare us the blasted spin that it will have a negligible effect - look at the $300,000,000 to Whyalla just for starters.
Getting too long here - back later - work to do. CW
