Productivity Commission

is that no federal government is going to cop the odium of making most things more expensive, bear the financial burden of compensating up to a third of the population, pensioners and the like, for having made things more expensive, and then the states get the political kudos for spending all the money.

So as Michael Brennan, who used to be the chair of the Productivity Commission and now runs the E61 Institute, has a very good piece out today saying that we need to break the nexus.

We do.

...revenue from the GST and payments to the states and territories.

Remember, 92 out of 103 agencies got bigger.

Guess which organization apparently needed fewer people? The Productivity Commission.

At a time when Australia has a serious productivity problem, government bureaucracy gets dramatically bigger, while the Productivity Commission gets smaller.

And if replacing consultants with permanent staff genuinely saves taxpayers money, I'm all for it.

But prove it.

And these strategies, I think, are going to be highly contextual.

I think back to sort of the early COVID days or post-COVID days where the conversation was all about supply chain resilience and the Productivity Commission had done work, the Office of Supply Chain Resilience had done work to figure out what are all the things, chemicals, you know, fuel.

AdBlue, everyone learnt about AdBlue.

Everyone learned about AdBlue, and that was across an entire economy, and it feels like you're describing a whole other work stream that is the same size in just this one area.

So Whitlam was being blamed for inflation caused by global factors.

And then what Whitlam did early on to fight inflation, following the advice of the Industry Assassination Commission, otherwise known as the Productivity Commission, The IAC, Industry Assistance Commission was its name, but the whole process was using neoclassical concepts to cut back the projection as much as they could do.

So Whitlam was persuaded by the head of the IAC to cut tariffs by 25% overnight, no warning, in the belief that would cut the rate of inflation.

Now, it made almost no impact upon the rate of inflation, but it meant Australian manufacturing was cauterized at the time.

What do

you reckon? Oh, well, Liam says, when the Productivity Commission and others look at housing productivity, why is it calculated per house as opposed to per square metre? Houses have grown more than double since the 90s with many 150 square metre plus.

Almost all are two-storey, whereas once they're all single-storey.

So he's saying that the Productivity Commission is getting it wrong by doing that and a lot of the decline in productivity is due to the larger house.

And Liam, that's an interesting, really interesting point.

There are two measures of productivity.

And it keeps, you know, it's now trying to sort of silence social media even more and tame algorithms and all of those things.

And meantime, I don't know whether you saw this, the Productivity Commission chair, Danielle Wood, has been looking at the housing approval delays madness.

And she suggested creating, guess what? Another agency to adjudicate.

There you go.