Productivity? Government is a dead weight on the economy

For example, it promotes the idea that childcare is a productivity measure because it gets more women back into the workforce faster. This seems to me to confuse increased output caused by a larger workforce with increased output caused by a more efficient workforce.

You might also ask how productive it is when the government has to subsidise childcare because it is so expensive it doesn't make economic sense for a woman to work full- or part-time, only to hand all of her post-tax income across to a childcare provider.

In economic terms we measure productivity in dollars of output per hour of work. For people who think in terms of widgets, it might be counter-intuitive but increasing the price of widgets faster than the cost of production, actually creates an increase in productivity under this definition, even though no more widgets per person are produced.

While a factory might be able to count widgets, the Australian Bureau of Statistics can't, so the only way they can feasibly measure productivity is by looking at inputs in terms of time and outputs in terms of price and volume.

If a woman (or a man) can raise their child for the same price (measured by the opportunity cost of what paying work they could be doing) a childcare centre can, and the evidence is that on average they do it much better than the centre, where is the productivity gain?

You lose not only in terms of the family, but the quality of life of the children, who are the next generation.

But the Productivity Commission's view on childcare pleases the woman who's been told she can have it all, and found that you can't, or not for the price you thought you could. And it pleases the government who thinks their proxies are better stewards of your children than you are. I bet your family never does a Welcome to Country in the mornings, or celebrates Pride Week/Month, but your local childcare centre or creche and kindergarten most certainly will.

The government is probably even more cynical. If they increase the price of childcare faster than inflation, then they've conjured a productivity gain into existence, even though they (or you as a taxpayer I should probably say) are picking up the tab.

What does the union movement want out of this summit? Productivity destruction mischaracterised as productivity growth. Here's a couple from yesterday's Financial Review.

They want to regulate AI under a 'digital just transition' so that if it does produce efficiencies, they capture the productivity gains through higher wages and/or severance and retraining packages. If these guys were running things we'd still be using quill pens and ink instead of tapping away on laptops.

Workers in the 'care' economy, the ones who influenced the government to legislate minimum carer/patient ratios making it much harder to improve productivity, are more semantically adventurous. They want a fundamental rethink of how productivity is measured. It needs to take into account quality of care. Yes, well, see above. Give higher quality of care and people will pay more and your productivity will have improved.

The aim of the unions is a centrally mandated wage rise, and yet more government interference in the economy. But government is a dead weight on the economy with its productivity being parasitic on everyone else's productivity, and highly productive countries also naturally produce high wages. The solution decreases productivity addressing an imaginary need.