One of the gotcha questions at the PM’s press conference this morning was about wages and productivity growth. Yesterday, the RBA said that Australia had ‘weak productivity outcomes’ even though ‘conditions in the labour market remain tight’.

Also yesterday, employment minister Murray Watt suggested it was possible to have wage growth without waiting for productivity growth to rise. (This prompted plenty of gasps at the AFR.)

Does the PM agree with the RBA Governor or his minister? As far as gotcha questions go, it’s pretty lame.

Productivity growth is notoriously hard to measure, and it is especially unreliable for making short-term decisions. Economics commentators love that famous line from Paul Krugman, who said that ‘Productivity is not everything, but in the long run, it’s almost everything’.

But economic policy in the short run is a different kettle of fish. Quarterly productivity measurements shouldn’t dictate wages, especially for those on minimum wages.

It’s also worth noting that wage increases can actually help, not hinder, productivity. Higher wages can produce greater workplace satisfaction and worker buy-in. They are also one of the main incentives for employers to explore efficiency-enhancing technologies and work techniques.

Want to see productivity grow? Grow minimum wages first.

Also in that press conference, Peter Dutton was asked about Donald Trump.

Now Malcolm Turnbull raised an interesting point about the wedge Dutton is in when it comes to Trump. As alternative prime minister, and especially as prime minister, Dutton’s job is to represent Australia and Australia’s interests.

But his biggest supporters, his network some would say, of billionaires – like Gina Rinehart and Rupert Murdoch, have wholeheartedly embraced Trump and what he is overseeing in America. They don’t just support it, they are cheer leading from within Trump’s inner tent.

So how does Dutton then stand up for Australia, when it means alienating the support network he has cultivated during his decades in politics?

Dutton hasn’t really been tested there, because so far, he hasn’t had to be. He can blame others and spit out platitudes like ‘standing up for Australia’.

But on Aukus, he did say this:

…we negotiated with president Biden into the AUKUS submarine delt we drove a very hard deal.

We’ll let the director of the International & Security Affairs Program, Emma Shortis take that one:

I mean, sure. It’s a really hard deal that involves Australia handing over upwards of $368 billion dollars with no guarantee of return on anything. Including the very hard negotiating tactic of indemnifying the United Kingdom and the United States for anything they do give us, so if it doesn’t work, too bad. Oh, and we’re talking the nuclear waste too. And now dealing with an administration that doesn’t even care about US laws, let alone agreements with its allies.

Great result.

Liberal-National Opposition Leader Peter Dutton committed to keeping “woke agendas” that have “come out of universities” out of schools – but yesterday he couldn’t actually identify what woke issues were in the national curriculum. 

That’s not uncommon. After I was amused and surprised to hear Liberal National senator Matt Canavan accuse Queen Elizabeth II of being “woke”, the Australia Institute assembled a list of people and organisations whom conservatives had accused of being woke. 

The Queen was in surprising company: among the “woke” were the Wiggles, the Australian cricket team, the Tasmanian Liberal Party and the Pope. 

So who isn’t woke? Well, Labor Prime Minister Anthony Albanese, at least according to the Daily Telegraph. 

Woke is a useful pejorative precisely because it means nothing – the listener can fill in whatever grievances they have, not realising that to other listeners, *they* would be considered woke.

In fact, it’s not just Peter Dutton who is unclear on what is woke or not. 

Our polling research in 2022 found most Australians either didn’t know what the word meant, or had a positive definition of the word. When politicians rail against “woke”, they’re narrowcasting to about 12% of the population.

When talking yesterday about the Coalition’s plan to cut 41,000 public servants, Peter Dutton said:

“I want to make sure that we are spending money on frontline services, not back-office operations,”

The Coalition are obviously sensitive to voters concerns about the impacts that these cuts might have to public services. But does just committing to cut back-office operations really make sense?

If you sacked all the administration workers in a hospital then the amount of time that doctors and nurses could spend caring for people would drop dramatically, as they would now need to attend to all the administrative work.

Worse, because doctors and nurses are trained and proficient in providing medical care, they would not be as efficient at doing the administration as the previous admin workers. This means the admin work would take more hours to do. The back-office staff help make the front-line services more efficient.

Claims that massive cuts to the public service can be done without reducing services to Australians might make a good campaign slogan, but if political parties plan to make cuts, they should be up front with people about what the real effects they will have.

Peter Dutton loves using numbers to bamboozle people, but the numbers never stand up to any sort of critical thinking.

Take this line:

Our argument is growing the public service at three times the rate the Rudd Gillard Government did is not sustainable

Now, I am not in Dutton’s head (thank Dolly) so I am assuming he is talking about headcount. (And I think this from the IPA which appears to include state-based public sector workers)

Now when we talk about the Rudd-Gillard government, the NDIA was only in its infancy. It was supposed to have 10,000 staff under the Rudd-Gillard plans. Then it was capped at around 3,000 and about 7,000 jobs were outsourced.

So we have a whole new public service department since then.

And also, there is a little thing called POPULATION GROWTH.

The Rudd-Gillard years were a decade ago. So the population in the 2014 census had Australia’s population at 23,625,600.

In 2024, (the last formalised population data) the population was 27.2m people.

Now we know the Coalition is aware of the population growth, because it is on a whole cut-migration bender (to make housing more affordable allegedly, which is just complete bupkis) so we can say that the Coalition and Peter Dutton are absolutely aware the population has grown since the Rudd-Gillard years.

As the population increases, so does spending on essential services (as do tax receipts – so don’t forget that). It is why governments always brag about ‘record’ spends on health and education – of course they are spending more, because there are more people they need to spend on.

So as the demand on services increases, there is a need to increase the number of people who are delivering those services. That’s just maths.

Putting it in private sector terms – if more people want what you are selling, you usually put on more staff to help you meet your orders. Angus Taylor loves to talk about his private sector experience, so surely he can understand that.

So if more people are using public services because there are more people full stop – the public service must also increase to meet that demand. If you don’t increase the numbers of people to meet that demand, then you offer less service. And can’t answer the phones at Services Australia. For example. Or process claims for veteran’s affairs. For example.

Or you have to outsource the work to consultants and labour force hires, who do the same work for more money (but you can hide that in different budget lines, by including the cost as part of different projects)

You might spend $21bn – the equivalent of 54,000 full-time public service roles – on outsourcing, labour hire and consultants. For example.

So again, let us take a look at the figures based as a percentage of the population:

Peter Dutton is continuing to conflate the cost of living crisis with the public service (the two are not related) to try and manufacture consent to slash the public service.

Cutting the public service under the Coalition only means money for the private sector.

Dutton wants to cut 41,000 jobs. He keeps talking about the ‘bloated’ public service in Canberra, but the numbers don’t show that. At all.

Dutton keeps saying he wants “come back to reality” but the reality is, that the public service has not grown out of control. No where near it.

The independent review into Services Australia’s capability which was delivered in December found:

With the support of short-term government funding, the agency recently recruited over 5,100 APS 3 and 4 level staff between November 2023 and March 2024, to address excess demand in the system. The additional resourcing reduced claims on-hand by more than half (from a peak of 1.35 million), and over one million phone calls were answered, reducing call wait times.”

And then there is this, which shows the growth of the public service as as proportion of the population:

So you see how in June 2024, which covers the three years where Labor was in government, it is LOWER than what it was in 2008-2012? Which is the Gillard/Rudd years? Very demure. Very mindful.

Peter Dutton and the Coalition are also in Melbourne, and Dutton is holding his first press conference – which is a lot earlier than he has held them earlier in the week.

His main purpose is to continue to combine the unpopular Jacinta Allan government with the federal Labor government in people’s minds.

A series of attack ads have gone out across Victoria, which link Allan and Albanese and Dutton is working to reinforce that this morning:

You’ve seen how Labor has mismanaged and really wrecked the Victorian economy, and you’re seeing the first signs at a federal election as well. Three more years of Mr Albanese at a federal level, governing like Jacinta Allan, will be a disaster for our country.

That answer continues:

Albanese:

Now, that’s happening in other places (he means, but won’t say, America) I don’t think it’s a good thing for us to copy.

Now, on Medicare, he’s also then gotten on Medicare, he’s also then gotten on to say that we don’t run hospitals, and therefore why have you got so and therefore why have you got so many people in the health many people

Well, like, hello? When we went through COVID, t the Commonwealth had a critical role and Commonwealth had a critical role and we supported the Morrison Government n that role. We fund hospitals, we in that role.

We fund hospitals, we fund aged care, we have a critical role in health.

We’re the body that role in health. We’re the body that looks after things like pharmaceuticals, l looks after immunisations, the Commonwealth has immunisations, the Commonwealth has a critical role in health and a critical role in health and education, Peter Dutton wants , nup, we’ll get out of j there and we’ll leave it all to the states.

That’s the contrast, that’s what people will vote on 3 May.

And they shouldn’t be surprised, if the coalition is elected, I mean – sometimes when governments get elected people go, ‘oh, they’re doing what they said what they would do’ and expressing some surprise at that.

Now, they’re being told very clearly what the choice is.

My government that will look after people, that won’t leave people people behind, won’t hold people back, will support increased wages, will support lower taxes, will support early childhood educators, will support fixing the aged care sector, will take action on climate change, and an opposition that says there’s no role for the Commonwealth, to need to have people in education or health.

I mean today Angus Taylor is giving a speech saying there will be new public servants at the same time they’re ripping the guts off they’re ripping the guts out of Medicare, out of education and the and the public service.

We will bring you some more of what Anthony Albanese has had to say about the minimum wage in a moment.

But he is having a bit of a moment here, speaking about Peter Dutton and what the Coalition is offering. The question was on whether the Allan Labor government in Victoria was a drag on the Labor federal vote in Victoria (it is. All Labor candidates in Victoria are fighting against the swing against the Labor state government)

Albanese says:

The real choice at this election.

The choice is between a government choice is between a government building Australia’s future, cutting building Australia’s future, cutting taxes, addressing cost of living taxes, addressing cost of living pressures, and a coalition that will pressures, and a coalition that will increase taxes, that doesn’t have increase taxes, that doesn’t have policies in so many areas, and now policies in so many areas, and now have confirmed – this – this is an have confirmed – this – this is an opposition that are talking about no opposition that are talking about no need to have an education need to have an education department. That’s what they have department.

That’s what they have said federally.

Peter Dutton, you know, went on that Sky News show know, went on that Sky News show late at night, and said that there late at night, and said that there was no need for a Department of was no need for a Department of Education because the federal Education because the federal government doesn’t run schools. government doesn’t run schools.

Well, actually we’ve got a bit of a role in early childhood education, role in early childhood education, in the schools funding agreement in the schools funding agreement where we’ve just put $14.6 billion where we’ve just put $14.6 billion of additional funding into public of additional funding into public schools, we fund private schools, we schools, we fund private schools, we are providing free TAFE, we run are providing free TAFE, we run universities and coordinate that, universities and coordinate that, but this guy says, nup, we can get but this guy says, nup, we can get rid of the education department. rid of the education department.

The Australia Institute supports the call for a real wage increase for those on the minimum wage and award wages.

Our research has shown that minimum and award wage increases have no impact on inflation.

Those on the minimum wage are the poorest paid workers in Australia and they deserve to see their living standards improve.

The cost of living pressures of the past three years have hurt those on low incomes the most because the biggest price rises have been on necessities like food.

“Those on award wages have seen their real wage fall by nearly 4% since 2020 and they deserve a wage increase that will restore their living standards,” said Greg Jericho, Chief Economist at The Australia Institute. 

“It is not surprising that business groups are arguing for a wage rise below inflation because that is what they always do.

“A decent wage rise for Australia’s poorest workers will not fuel inflation; it will only ensure those workers are able to keep their heads above water.”