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Category: Democracy & Accountability

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  • Want to lift workers’ productivity? Let’s start with their bosses

    Want to lift workers’ productivity? Let’s start with their bosses

    by David Peetz in The New Daily

    David Peetz

    Laurie Carmichael Distinguished Research Fellow

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    Originally published in The New Daily on August 18, 2025

    Business representatives sit down today with government and others to talk about productivity. Who, according to those business representatives, will need to change the way they do things?

    The elephant in the room is that it is business that has the biggest influence on productivity. Certainly, it has a much bigger impact than workers, who typically get the blame when things go wrong.

    The factor that most shapes how productive workers are, we must remember, is the technology they work with. It is management that is responsible for the decisions about what technology a business introduces, and how. Workers often do not have much of a say.

    It is not workers who make the decisions about how much money is available for investment. It is not workers who make the decision about which particular technologies to buy, install and use. It is not workers who decide how much money should be allocated to the training of workers to use the new technology, or how those workers should be deployed. It is management.

    Sure, there is lots of evidence that, when workers have a say at work, productivity is higher. But managers often don’t give them a chance to have more than a token say, if they have any say at all. Any attempts by governments to legislate that workers decide or influence decisions on those matters are opposed by business bodies in Australia.

    How much effort workers put in to their job also shapes productivity. But lazy workers don’t last long in jobs these days, and most restrictive work practices went out the window in the 1980s. If a business continued to use workers who do not put effort into their job, the finger would very quickly be pointed at the managers who decided to do that and to not have the performance management systems that would overcome that problem.

    Some characteristics of workers do make a difference, but they are often still matters in the hands of management to control.

    Output will be better with an educated and skilled workforce. If people can do more things with their brains, they will be more productive. Yet management decides on the qualifications demanded of successful applicants for jobs. Management decides how much pay to offer to attract qualified workers to apply for and fill skilled vacancies. Management decides on the training provided to workers.

    Management decides on job quality which, studies show, is positively related to performance.

    Management decides on how much a business pursues diversity, equity and inclusion practices, which (despite shenanigans in the US) have also been shown to benefit innovation and firm performance.

    So it’s no surprise that a couple of years ago the Productivity Commission, after looking at OECD evidence, said that the “productivity gains from upskilling managers could be three times higher than for upskilling workers”.

    The problem for Australia is that, overall, the quality of Australian management is not that good. One survey showed that Australia “ranks low in almost all the people management dimensions”.

    The Productivity Commission commented in its 2023 five-yearly review that “managerial capability varies, but generally lags other countries” and observed that “limited management capability may be holding back Australia’s productivity growth”. It added that its consultations had “provided insights into some of the consequences for innovation of poor management capability”.

    The main response by top management seems to be to pay itself more. But a study as far back as 2004 found that the average pay gap between CEO pay and average earnings was “at least three times higher than that required to maximise organisational performance”. Leaders might say they’re tied to performance bonuses, but somehow when profits go down, the formula or the base get changed, and the CEO’s pay packet is saved.

    When that doesn’t increase productivity, it’s blame the unions. But that wears a bit thin when only one in eight workers is unionised these days. Or cut penalty rates, or some other aspect of workers’ pay! But lower wages just reduce the incentive to introduce new technology.

    What the studies do show about the impact of workplace relations on productivity is that it’s not whether a workforce is unionised that matters, it’s the quality of relations between workers and management that counts — and that is very much in the hands of management.

    After all, research shows that workers do want a co-operative relationship with management — which, despite management wishes, is not the same as acquiescing to every management whim. If their union didn’t want co-operation, the workers would quit the union. The trouble is, if management didn’t want genuine co-operation, it will just blame the workers, and up its own pay because it’s dealing with a difficult situation.

    There are no prizes for expecting business to blame others for Australia’s productivity problems. But an honest debate would look at what management can do better.


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  • Australia’s Gas Use On The Slide

    Australia’s Gas Use On The Slide

    by Ketan Joshi

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    The Federal Government has released a new report that includes projections of how much gas Australia is set to use over the coming decades. There is no ambiguity in its message: Australia reached peak gas years ago, and it’s all downhill from here:

    “Gas consumption is projected to decline to 2040 as electrification increases across the economy and renewables and storage take an increasing share of electricity generation”, wrote the Department of Climate Change, Energy, Environment and Water (DCCEEW).

    This doesn’t sit well with the Prime Minister’s recent claims that more gas is needed for “firming” renewable energy. Figures from the Australian Energy Market Operator (AEMO)’s 2024 Integrated System Plan (ISP) show just how little gas is likely to be required in Australia’s electricity system.

    In AEMO’s ‘step change’ scenario, there isn’t a single year where gas generates more than its historical peak in the National Electricity Market. In this scenario, more gas was burned in the past 16 years than is burned over the next 25 years.

    In short: while gas might serve occasional use during low wind and sun periods, Australia simply will not end up using large amounts of it.

    It is weird, then, that Australia has a massive pipeline of planned fossil gas extraction projects. Many of them are justified on the grounds that they’re required to help Australia decarbonise its power grids, with more than 1,000 new petajoules coming online by 2027, according to the latest government projects report.

    The chart below compares the above projections of Australia’s domestic gas use to projections of the volume of gas exports, prepared by the separate Department of Resources and Energy (DISER). It makes it pretty clear where all the new gas is going – exports.

    Only looking at new gas production capacity, and only looking at the proportion that has a clear operation date, that is still around 11 times the amount of gas projected to be used in the power sector. In fact, the use of LNG for FY23 was greater just for processing LNG than the entire power sector in Australia:

    This analysis by climate expert Tim Baxter lays it out in even more detail.

    “Again, more than 3,000 petajoules of gas were exported from Western Australia in 2022–23. If the entire transition to clean energy were to stand dead still as if renewables weren’t already going gang-busters — in Western Australia renewable energy generation has increased by an average of 20% each year for the past five years — we would need just 2.5% of that gas to keep the lights on for the state”.

    It is pretty simple: Australia does not need to be expanding its fossil gas production, least of all to run fossil gas power stations. It’s a hollow fossil fuel industry talking point, and the Federal Government should know better than to repeat it.


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    Centre For Future Work to evolve into standalone entity

    The Centre for Future Work was established by the Australia Institute in 2016 to conduct and publish progressive economic research on work, employment, and labour markets. Supported by the Australian Union movement, the centre produced cutting edge research and led the national conversation on economic issues facing working people: including the future of jobs, wages

  • Briefing Paper: Restoring public sector capability through investment in public service employees

    Employment & Unemployment, Future of Work, Gender at Work, Governance & Government Agencies, Labour Standards & Workers’ Rights, Public Sector, Procurement & Privatisation

    Briefing Paper: Restoring public sector capability through investment in public service employees

    by Lisa Heap

    Author

    Lisa Heap

    Senior Researcher

    The Australian Public Service (APS) is responsible for delivering some of the most crucial social services to all Australians. The APS workforce includes employees who deliver frontline services like in Medicare and Centrelink, those who administer the National Disability Insurance Scheme (NDIS), and those who assist service personnel and veterans via Veterans Affairs. These are just some of the functions that APS employees undertake. Behind front line service delivery staff are employees who support these staff, work to coordinate and integrate services and provide policy and regulatory advice to government.

    This briefing paper examines the make-up of the APS and considers recent efforts to improve APS service delivery. We conclude that recent investment in the employment of more APS employees has improved service delivery and that any reduction in APS employees will reduce service delivery or result in the engagement of more consultants and contractors.

    In this paper we debunk several of the myths promoted in the political debate around the size of Australia’s public service. One such myth is that Australia’s public service is “bloated” or “inefficient”. The research also found that despite claims to the contrary, most of the public service jobs created since 2022 were not based in Canberra.



    Restoring public sector capability through investment in public service employees

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  • Chalmers is right, the RBA has smashed the economy

    Chalmers is right, the RBA has smashed the economy

    by Greg Jericho

    Greg Jericho

    Chief Economist

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    In recent weeks the Treasurer Jim Chalmers has been criticised by the opposition and some conservative economists for pointing out that the 13 interest rate increases have slowed Australia’s economy. But the data shows he is right.

    Last year the government announced it was considering removing its statutory power to overrule the Reserve Bank. Thankfully it has now reconsidered that move, and the actions of the RBA over the past year serve to remind everyone that it is far from infallible.

    In its May Statement on Monetary Policy the RBA looked ahead one month and estimated that in June the annual growth of household consumption would be 1.1%. When the national accounts were released last week, the actual growth was revealed to be just 0.5%.

    Now obviously economic forecasting is a bit of a mugs game, but household consumption makes up half of Australia’s economy and accounted for around 45% of all the growth in the economy over the past decade so it is pretty important. It is also the area of the economy most directly affected by interest rate rises. This error of forecasting suggests that the Reserve Bank has rather poorly misread just how greatly households had been impacted by the 13 rate rises that had taken the cash rate from 0.1% in April 2022 to 4.35% in November 2023.

    This error is crucial because the main reason the RBA raises rates is to reduce the ability of households to spend. Because you can’t tell your bank that you don’t really feel like paying your mortgage this month, interest rate rises force households to divert money that would have been spent on goods and services to paying your mortgage.

    The problem is when you are trying to slow down half of the economy so directly, if you overdo it the entire economy begins to fall. This is what happened in the early 1980s and 1990s when interest rates were raised sharply in order to slow inflation.

    And the private sector has already slowed so greatly that the only reason GDP rose in the past year was because of increased government spending.

    That is not a sign of a strong economy, nor a sign of one, according to the assistant governor of the RBA, Dr Sarah Hunter, that “is running a little bit hotter than we thought previously”.

    Economies that are running a bit hot are ones in which households are spending a lot more than they were the year before because unemployment is falling and wages are rising well ahead of inflation. Instead we currently have a situation where unemployment has risen from 3.5% in June last year to the current level of 4.2%, household spending grew just 0.5% – well below the long-term average of 3% – and real wages in the past year rose just 0.1%.

    When asked about this discrepancy between reality and the RBA’s belief, the Governor of the Reserve Bank, Michele Bullock told reporters last week that

    …it’s the difference between growth rates and levels.

    She noted that “it’s true that the growth rate of GDP has slowed” but that “part of monetary policy’s job has been to try and slow the growth of the economy because the level of demand for goods and services in the economy is higher than the ability of the economy to supply those goods and services. So there’s still a gap there. So even though it’s slowing, we still have this gap.”

    In effect Bullock was telling people to stop worrying about the fact that household consumption was barely growing or that GDP only grew because of government spending or that GDP per capita has fallen for a record 6 consecutive quarters because the amount of consumption and GDP was too high.

    This could make sense – think of it like a car travelling on a 60km/h road. If it was travelling at 80km/h and slowed to 70km/h even though it was slowing it would still be going too fast.

    In essence this is what Bullock is arguing is happening to demand in the economy – it is slowing but overall there’s still too much of it.

    The only problem is that this is completely wrong.

    Consider the suggestion that the demand for goods and services is higher than the ability of the economy to supply those goods and services. One simple way to look at this is to see if the amount of goods and services bought per person is currently at a level consistent with the growth observed in the decade before the pandemic.

    This is actually not a major test – household consumption, along with most of the economy was rather weak in the 7 or 8 years before 2020. The RBA at the time actually was hoping Australians would spend more than they did, so you would expect in an economy with too much demand that the amount of things we are buying is well above the levels of that particularly weak period.

    But it is not.

    As we can see from the below graph, while household spending did quickly recover after the lockdowns in 2020 and 2021, by the time the RBA began raising interest rates our level of demand for goods and services was only back to the level consistent with the pre-pandemic growth.

    Now yes you can argue the RBA was right to increase rates at that time – to ensure our spending didn’t keep zooming up in recovery. But by the time of the 10th rate increase in March 2023, household spending per person was already falling and 0.7% below the pre-pandemic trend. When the RBA raised rates for there 12th time in June 2023, the level of demand for goods and services was 1% below the pre-pandemic trend.

    At this point you might think the RBA had done enough. But after pausing for 4 months, the bank inexplicably raised rates for a 13th time in November 2023. At this stage household level of spending was 2.5% below the pre-pandemic trend.

    And because interest rate rises take months to worth through the economy we now find ourselves at a point where the level of household consumption per person is 3.8% lower than would have been expected had households merely kept increasing our consumption in line with the decade before the pandemic.

    In effect Australians are currently consuming almost the same amount of goods and services as they did in June 2018 and yet the head of the RBA would have us believe that is a case of excess demand.

    If we look at the overall economy, the picture is much the same (see the graph at the top of the page). Australia’s level of GDP per capita did recover quickly after the lockdowns and by June 2022 was 1.4% above the pre-pandemic trend level. But the interest rates rises had an immediate impact – reducing GDP per capita in 7 of the next 8 quarters. By June 2023 the level of activity in the economy was already below pre-pandemic expectations, and when the RBA hit Australians with the 13th rate rise in November 2023, the level of GDP per capita was 1.2% below the long-term trend.

    It is now 2.5% below – back at the level it was in June 2021.

    The RBA has got it wrong. They were initially worried that inflation was driven by concerns of strong wage growth rather than supply side issues and corporate profits. They then tried to argue household spending was still growing too strongly. The GDP figures showed that to be woefully mistaken. They then tried to argue that while growth in the economy was slow, there was still too much demand. But again the figures show this to be mistaken.

    The Treasurer Jim Chalmers stated nothing but the facts when he said earlier this month that rate rises were “smashing the economy”. The data supports his assertion, and it is time the RBA admits that their actions have not only slowed the economy but slowed it at a pace that is now harming Australians for no benefit other than the RBA saving face from its previous over-reactions.


    Related research



    Submission to the Reserve Bank Reforms 2023 bill



    Full Submission



    Profit-Price Inflation: Theory, International Evidence, and Policy Implications



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  • The 9 to 5 is back! Time to put the phone on silent

    The 9 to 5 is back! Time to put the phone on silent

    by Fiona Macdonald in The Sydney Morning Herald and The Age

    Fiona Macdonald

    Acting Director, Centre for Future Work

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    Originally published in The Sydney Morning Herald and The Age on August 26, 2024

    If you’ve ever flicked off an email before bed, texted your boss out of hours, or received an ‘urgent’ work call after clocking off, you’ll be glad to hear some respite is just around the corner.
    A new right to disconnect from work, for employees in businesses with 15 or more staff, comes into force across Australia from Monday 26th August. This is a welcome response to the growing problem of ‘availability creep’, where work demands spill over into workers’ leisure time.
    The new right means most employees can now refuse to monitor and respond to unreasonable contact from their employers about work matters outside of paid work hours.
    Many of us are now online and digitally connected to our workplaces 24/7. This constant connectedness can make it hard to escape work calls, texts, and emails when not actually at work.
    As we are now so easily contacted anywhere and anytime, our leisure and family time has become very susceptible to interruptions from work, leading to unpaid overtime, an inability to ‘switch off’, and blurred boundaries between work and non-work time. Gone are the days of 8 hours work, 8 hours rest, and 8 hours play.
    The consequences are stark. Research has shown these work practices lead to increased stress, health problems and a poor work-life balance.
    The right to disconnect from work is one solution to the problems of availability creep and unpaid overtime. The Senate Select Committee on Work and Care proposed this reform to Australia’s workplace laws in early 2023 and the initiative was included in the Government’s Closing Loopholes package of workplace reforms passed by the federal parliament later that year. A similar right is in place in a number of other countries including France, Canada and the Philippines.
    Australia’s new right to disconnect does not mean there is a blanket ban on contacting employees outside their scheduled work hours. Rather, it means that an employee cannot be penalised for refusing unreasonable contact.
    There are many circumstances in which a manager’s attempts to contact an employee out of their work hours might be reasonable. For example, this could be where an employee is on-call and receiving an on-call allowance. Some jobs regularly require a certain amount of out of hours contact and employees’ remuneration may reflect this. However, for many workers, contact out of working hours arises from pressures that lead to overwork and unpaid overtime.
    And unpaid overtime is a significant problem in Australia.
    In 2023 employees responding to a Centre for Future Work survey reported working an average of 5.4 hours of unpaid overtime a week, with full-time employees reporting working an average of 6.2 hours a week of unpaid overtime. A conservative back-of-the-envelope calculation shows that’s an extra seven weeks’ work every year.
    Workers should not have to monitor or respond to emails, text messages and phone calls after hours about concerns that could be raised and dealt with in their scheduled work time. Poor organisation, understaffing and reliance on overwork are not good reasons for requiring employees to be available out of hours. It is these practices that the right to disconnect is intended to challenge.
    Fears that workplace flexibility will be undermined as workers exercise their rights to disconnect are largely misplaced. In organisations where flexibility is based on employees’ constant availability there may be some disruption. But this is exactly the practices that the right to disconnect should disrupt.
    Flexibility can exist alongside respect for employees’ rights to switch off from work. Good flexible work practices and arrangements are those that benefit both employers and employees, and are designed through negotiation and consultation. The dissolution of boundaries between work and leisure time is not the answer.
    Will individual employees be lining up to ask the Fair Work Commission to order their employers to stop contacting them? Probably not. The real potential in the right to disconnect is its ability to catalyse an evolution in workplace expectations that shifts norms away from a reliance on overwork and constant availability.
    Time to put that phone on silent.


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  • Closing Loopholes Protections, Including Right to Disconnect, Come Into Effect 26 August

    Closing Loopholes Protections, Including Right to Disconnect, Come Into Effect 26 August

    by Melissa Donnelly

    Melissa Donnelly

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    New labour rights coming into effect on 26 August, including the ‘Right to Disconnect’.

    On Monday, 26 August, several legal and regulatory changes included in the Closing Loopholes Act (passed earlier this year by Parliament) will come into effect. These changes will better protect casual employees, with a new legal definition of what constitutes casual employment (rather than leaving it solely to employers), and better pathways for casual workers to obtain permanent employment. New protections for ‘employee-like’ workers in the road transport and platform economy (including food delivery riders and ride-share drivers) will also come into effect.

    One of the most exciting changes coming on 26 August is enactment of the new ‘Right to Disconnect’ for workers at large firms. (For smaller workplaces, these changes come into effect next year.) This marks an important step forward in workers’ ability to turn off their devices outside of normal work hours, and get full value from their leisure time.

    The importance of these protections, and some detail on how workers can make the most of them, are provided in this commentary article by Melissa Donnelly, National Secretary of the Community and Public Service Union. The commentary originally appeared in the Canberra Times. Ms Donnelly refers to research from the Centre for Future Work’s annual Go Home On Time Day survey; see our full 2023 report on unpaid overtime for full details on those findings.

    Right to Disconnect Means Countless Aussies are About to Reclaim Knock-Off Time

    By Melissa Donnelly

    Everything that is treasured by Australians gets a nickname and finishing work at the end of the day is no different.

    But I’d argue that knock-off time is more than treasured. It’s sacred.

    Workers will soon have the right to disconnect and not answer calls or emails outside of paid hours as parliament passes Labor’s bill endorsing the reform.

    For some, knock-off time leads to a frantic trip to pick up the kids from school and then piling over to the neighbours’ place to watch the footy.

    For others, it means a visit to the local gym, a game of social soccer, or dinner and drinks with friends.

    But as time has passed and technology has improved, we’ve become increasingly available.

    The iconic Nokia 3310 was released in 2000, but it wasn’t pinging at us every time we got an email or meeting invite.

    It was only used for texts, calls and, of course, snake.

    Fast forward to 2024 and things are little bit different.

    For many, our now very smart phones are ringing or sending us email notifications and texts more often than they aren’t.

    Things that could wait until you got to the office are being done while you eat breakfast, and that call that definitely could have been an email is being answered late into the night because you’re committed to your job and don’t want to ignore your boss.

    But it’s not sustainable.

    We’ve slowly but surely lost our sacred knock-off time, and in its place is “I’m heading off, but available on my mobile”, or “I’ll jump back online when I’m home to finish that thing off”.

    I don’t know that knock-off time really exists anymore, but I do know that we’re all the worse for it.

    The union movement has always fought to protect workers while they are at work.

    Basically, you now have the right to knock off at the end of day. Properly.

    But just as important, has been the long and consistent fight the union movement has had with businesses and governments to protect the right of workers to not be at work.

    Weekends, lunch breaks, annual leave, sick leave and parental have all been fought for and secured by the union movement.

    So, what do you do when your time away from work is increasingly compromised by the explosion of technology?

    You campaign for and secure the right for workers to disconnect.

    And that’s exactly what we’ve done.

    What does this mean in practice?

    It means that you’ve got a whole bunch of extra rights when it comes to being contacted after-hours or being asked to monitor emails or anything work related, outside of work hours.

    If an employer is contacting you outside of your working hours, there must be a good reason for it.

    The Fair Work Act provides a good outline to help determine if contact is reasonable or not. These include:

    The reason for the contact – is it an emergency or highly time sensitive?

    The method of contact and the level of disruption it causes (for example, an email is less disruptive than an SMS or phone call).

    Whether the employee is paid to be available or is paid for additional hours worked.

    The nature of the role and the level of responsibility held by the employee.

    The employee’s personal circumstances (including family or caring responsibilities).

    This law supports you to switch off and will make your boss think twice about contacting you.

    Basically, you now have the right to knock off at the end of day. Properly.

    You aren’t paid to be available 24/7 – so you shouldn’t be.

    You should be able to watch your child at footy training – uninterrupted.

    You should be able to go to a pottery class – uninterrupted.

    You should be able to go fishing, visit a loved one, make book week costumes (parents, head to toe in glitter and makeshift costumes will know it’s *this week*), play soccer, have a beer, go to a dance recital, plod around in your garden, read a book, bake a cake – uninterrupted.

    You might be asking yourself right now, how big of a problem is this?

    The Centre for Future Work at The Australia Institute publishes an annual report that shines a light on the amount of unpaid overtime that Australian workers are doing.

    The 2023 report found that on average, employees perform 5.4 hours of unpaid work per week, with full-time employees working about 6.2 unpaid hours per week. This equates to more than 280 additional hours per year, or about 7 weeks per year, per worker.

    Workers shouldn’t be working an extra 7 weeks for free every year.

    You’re meant to knock off on time, and you’re meant to be able to switch off at the end of the day because it is good for you. It is good for your mental health, it is good for your physical health, it is good for your relationships.

    Just because we can be available all the time, doesn’t mean we should be.

    My final comments are ones you’d expect from a union leader. I want to highlight that the rights you have as a worker aren’t really your rights unless they are enforced. And that goes for all rights – your right to flexible work, your right to a safe workplace and now, your right to disconnect.

    If you’re not sure how to access these rights and you’re a member of the CPSU, reach out to our Member Service Centre. If you’re an APS employee but not yet a member, it’s time to join.

    The right to knock off at the end of the day is back, and I encourage you to use it.

    Melissa Donnelly is the national secretary of the Community and Public Sector Union.


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  • Would you like a recession with that? New Zealand shows the danger of high interest rates

    Would you like a recession with that? New Zealand shows the danger of high interest rates

    by Matt Grudnoff

    Matt Grudnoff

    Senior Economist

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    New Zealand’s central bank raised interest rates more than Australia and went into a recession – twice.

    Recently there have been calls for the Reserve Bank to increase interest rates because inflation has remained “sticky” at 3.5%-4%. These calls are coming even though this may push Australia into recession. This horrifying scenario is being shrugged off by some as the price we have to pay to get inflation down – but the experience of New Zealand shows higher interest rates do not always bring down inflation, but they can very much lead to recessions.

    The June quarter CPI is due out this week, and many economists predict that it will increase slightly from the current 3.6%. This comes after consistent falls in the rate of inflation since the end of 2022. In fact, the inflation rate has fallen from 7.8% in December 2022 to 3.6% in March 2024.

    But a more than halving in the inflation rate is not enough for the armchair inflation hawks who are determined to see the inflation rate back into the Reserve Bank’s target band as soon as possible and regardless of the cost.

    The idea that the costs of slightly elevated inflation are in any way comparable to the costs of a recession is just ridiculous. Recessions cause widespread suffering, unemployment, and economic scaring that can last for a decade or more.

    Now that wages are growing faster than inflation, the costs of inflation are minimal, particularly when it is less than a percentage point above the target band.

    Even worse, higher interest rates are unlikely to bring inflation down any faster.

    Normally inflation is caused when the economy is booming, incomes and spending is rapidly rising, and businesses can’t keep up with all the additional demand. In this situation, higher interest rates act by reducing spending and slowing the booming economy.

    The inflation Australia and the rest of the world are facing is not that kind of inflation. It is a much more uncommon kind of inflation that is caused by supply shocks. Supply shocks increase the costs that businesses face which leads to increased prices. Importantly higher costs can’t be fixed by increasing interest rates, making them a far less effective policy response.

    As former governor Philip Lowe pointed out, there is very little that monetary policy can do to offset supply shocks, and you should “let the supply shock wash through the system.”

    New Zealand is a case in point. It has increased its official interest rate faster and higher than Australia. While Australia’s cash rate is at 4.35%, New Zealand’s rate is at 5.5%.

    The New Zealand economy has been dipping in and out of technical recession for 18 months. A technical recession is two consecutive quarter of negative economic growth – and New Zealand has experience that twice.

    By comparison Australia’s, economic growth has slowed but it has continued to remain positive.

    The problem for New Zealand is that the higher interest rates and slower economic growth have not led to a faster drop in inflation. If we compare the inflation in New Zealand and Australia, we can see that while inflation in New Zealand took off earlier than in Australia, both countries are seeing inflation come down at about the same pace.

    This should be a warning to the Reserve Bank that higher interest rates might work to crash the economy, pushing up unemployment, and heaping more misery on Australian households, but they will do little to bring down prices.

    Inflation is already on its way down as the supply shocks that set off this bout of inflation resolve themselves. When the June quarter inflation rate comes out, it might show the path back to the target band is not completely smooth. It may even increase slightly. But this is a time when the Reserve Bank needs to show courage and ignore the armchair critics and keep interest rates on hold.

    Inflation is coming down and a recession would be the worst possible outcome.


    Related research



    Profit-Price Inflation: Theory, International Evidence, and Policy Implications



    Full report

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  • Submission to the House of Representatives Standing Committee on Employment, Education and Training Inquiry into the Digital Transformation of Workplaces

    Digital Technology & the Internet, Future of Work, Labour Standards & Workers’ Rights

    Submission to the House of Representatives Standing Committee on Employment, Education and Training Inquiry into the Digital Transformation of Workplaces

    by Fiona Macdonald and Lisa Heap

    Authors

    Fiona Macdonald

    Acting Director, Centre for Future Work

    Lisa Heap

    Senior Researcher

    Artificial Intelligence (AI) is transforming the way we work and the jobs we do. AI innovations in workplaces can have positive benefits, including through productivity gains. However, AI applications can also have significant risks for workers and for job quality.
    AI applications, including automated decision making, are not neutral processes. Software can be designed and used to assist workers by augmenting their capacity and freeing up time for more meaningful or creative work. Or it can be designed and used in ways that intensify work and displace workers.
    International evidence shows the use of AI in workplaces for managing workers and work processes is extending and intensifying long-standing efficiency-driven logics that result in reduced autonomy and control and intensify work, undermining job quality and worker wellbeing. Even when designed for benevolent purposes, unintended consequences can arise from the adoption of AI in workplaces. These include serious breaches of privacy, bias and discrimination in recruitment and hiring, and unfair decision-making in performance measurement and evaluation.
    In this submission we argue that the promotion of AI innovation must not overshadow objectives and principles for decent jobs and fairness at work. We set out principles for new laws to regulate the uses of AI in workplaces with a goal of protecting workers.



    Full report

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  • “I studied economics to better understand the world and equip me with better tools to serve society”

    “I studied economics to better understand the world and equip me with better tools to serve society”

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    Prof Anis Chowdhury, an Associate of the Centre for Future Work, was recently appointed Emeritus Professor at Western Sydney University, in honour of his decades of influential work in progressive macroeconomics and development economics. Prof Chowdhury’s address on occasion of his installment provides an overview of his evolution as a progressive economist and significant impact on global policy:

    Installment Address, Emeritus Professor Anis Chowdhury, Western Sydney University, June 2024

    Chancellor, Deputy Vice-Chancellor, colleagues, guests, ladies and gentlemen – and of course, graduands.

    Thank-you Deputy Vice-Chancellor for your generous introduction. My sincere thanks to the Board of Trustees for approving me for this prestigious title.

    I recognise the Traditional Custodians of the lands where our campuses are located, and pay my respects to all First Nations Elders past and present.

    I join my voice to all calls to honour their right to self-determination and development, as enshrined in the landmark 2007 UN Declaration on the Rights of Indigenous Peoples.

    Incidentally, at the UN, the first report I provided significant input into, was State of the World’s Indigenous Peoples 2009, and drafted, was Report on the World Social Situation 2010.

    My passion for human rights, equity and justice is the product of my time. I was born in 1954, a year before the leaders of newly-decolonised Africa and Asia met in solidarity in Bandung, Indonesia.

    Indonesia’s founding President Soekarno reminded, “our unhappy world [is] torn and tortured, … because the dogs of war are unchained once again”.

    He called for “Moral Violence … in favour of peace”, to “demonstrate to the minority of the world … that we, the majority, are for peace, not for war”.

    At school in the 1960s, we were constantly inspired by calls against all forms of discrimination, violence and exploitation in favour of peace, humanity and social justice.

    Despite the wave of decolonisation, we remembered Soekarno’s warning: colonialism “was not dead”. Instead, it took “its modern dress … It is a skilful and determined enemy, … appears in many guises… [and] does not give up its loot easily”.

    In solidarity with Franz Fanon’s ‘Wretched of the Earth’, I was a student activist, joining protest movements against the Vietnam War, Indonesia’s invasion of East Timor and India’s annexation of Sikkim; condemning the murders of the likes of Che Guevara and Salvador Allende; demanding the end of apartheid in South Africa; and joining Bangladesh’s liberation war.

    Today, my involvement in these movements would be labelled as “radicalism”; back then, it was the norm.

    I studied economics to better understand the world and equip me with better tools to serve society. My father, a doctor, readily agreed, socio-economic ills are the root cause of many diseases.

    In universities in the 1970s, dissent and debate were encouraged as ways to develop humanist and universalist views; to think big; and to become movers and shakers. We were inspired by world leaders like Gough Whitlam, and Tanzania’s freedom leader Julius Nyerere. Of course, Nelson Mandela stood tall.

    The 1970s were significant.

    • Bangladesh became an independent nation in 1971.
    • In 1972, the Club of Rome warned of the unsustainability of current consumption and production.
    • In 1974, the UN called for a “New International Economic Order” to end economic colonialism.
    • And the people of Vietnam defeated the US superpower in 1975.

    Alas, the 1980s slid us backwards, commodifying everything, including education. Universities turned into mass degree factories, and economics moved from the social science faculty, to business schools.

    Unfortunately, it was not just ‘Gordon Gekko’, but a Nobel Laureate economist, Milton Friedman, who promoted the idea that “greed is good”.

    Then came wars instigated by lies, against the urging of the UN Security Council; and the gleeful murder of half a million children as “collateral damage” justified as “a price worth paying”.

    We started this decade with rich nations stockpiling Covid-19 vaccines and blocking poor countries’ access to drugs, testings and vaccines to protect big pharma profits.

    Now, we’ve descended to the lowest point of our post-war history, with the massacre of over 40,000 Palestinians – mostly women and children – and those in high office openly calling for the total annihilation of a colonised people. The ICC and ICJ are threatened by the leaders of the free world acting like a mafioso cartel.

    How much lower can we descend?

    Has civilization progressed at all?

    We cannot resolve our differences with dialogue; and modern killing machines have replaced sticks and stones where might is right.

    Have I lost hope? NO.

    I look at the bright moments like Bob Hawke’s leadership of the anti-apartheid BDS movement that liberated South Africa and Nelson Mandela.

    Student protests and encampments for Gaza all around the world, including at Western Sydney University, maintain my faith in the power of active citizens.

    Under this “moral violence” for peace, universities are reconnecting with their essential humanity and their duty of care.

    As we celebrate our academic achievements today, we must also remember the students and teachers of Gaza’s razed universities.

    We must not lose sight of the real-world impacts of our academic pursuits. My knowledge of economics was enriched by my social and political activism. When I was in Indonesia to advise on the recovery from the Asian financial crisis and to draft National Human Development Report, I lived outside the gated community to understand the daily struggle of those who lost livelihoods.

    In 1970, Friedman wrote, “the social responsibility of business is to increase its profits”.

    Dear new business graduands, as I congratulate you, I also urge you to purge the world of this obnoxious Friedmanite idea that is destroying our planet and tearing our communities apart.

    Look instead to the “Social Business Model” of Bangladesh’s Nobel Laureate Muhammad Yunus.

    Work on the right side of history; stand up for justice and liberation; spread the “moral violence” for peace; and put people and planet before profit.

    Thank-you.


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  • No need for panic over ‘sticky’ inflation: Jericho

    No need for panic over ‘sticky’ inflation: Jericho

    by Greg Jericho

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    Inflation has stopped falling, but there’s no need for a further rate hike, says Greg Jericho.

    Inflation is stubbornly staying above the Reserve Bank’s target, but it’s not because Australian consumers are flush with cash, according to Australia Institute Chief Economist, Greg Jericho.

    In fact, retail spending figures suggest that people are struggling and further suppressing consumer demand by increasing interest rates could have a detrimental effect on the economy, Jericho said on the latest episode of Dollars & Sense.

    “Pretty much since December, inflation has been stuck at that 3.5, 3.6 per cent area.

    “Whereas, before that, it had been coming down fairly steadily.

    “And so, some economists are getting rather panicky about the fact that inflation is ‘sticky’.”

    But that’s not the full picture, Jericho said.

    “What I care about as an economist is: are consumers out there spending like mad? And, as a result shop owners are going ‘wow, I’ve got lines around the block – I can raise prices’.

    “But what we see in the retail spending figures is that we are not buying much at all.

    “That is a real sign that we are not flush with cash, we are not doing well – households are really struggling.”

    While some are calling for the Reserve Bank to take further action, further suppressing consumer demand to get inflation below three per cent isn’t a silver bullet, Jericho said.

    “The Reserve Bank has a target – and it’s an arbitrary target – of trying to keep inflation between two and three per cent.

    “Other countries have different inflation targets.

    “There’s no natural law of economics that says once inflation goes below three per cent things are hunky dory.”

    Dollars & Sense is available on Apple Podcasts, Spotify or wherever you get your podcasts.


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