Article by Ewin Hannan, courtesy of The Australian.
20.11.2025
Former Liberal treasurer Peter Costello has accused the Productivity Commission of failing to use its statutory independence to tell “inconvenient truths” to the Albanese government about the causes of the nation’s waning productivity, declaring the agency had become “politically correct”.
Blaming the “arcane” award system for a raft of big employers underpaying workers, Mr Costello is questioning why participants at the government’s recent productivity reform roundtable did not raise the impact of workplace relations policy on productivity.
“You can imagine that having created this framework, the government would not be keen to have it examined and measured for its productivity outcomes. But did any of the hand-picked participants raise it? What about our Productivity Commission?,” Mr Costello will say in a speech to be delivered to the conservative H.R. Nicholls Society on Friday.
“Does our Productivity Commission think that arcane awards, same job same pay legislation, legislated work from home, right to disconnect laws, the state of commercial building sites … has an effect on productivity? Does it? It had nothing to say about this at the roundtable.
“I am told, for tactical reasons, the PC doesn’t raise things likely to get a hostile reaction from the government. These days the PC has gone pc – politically correct.”
Mr Costello will say the commission was established in 1998 as an independent statutory agency. Members have statutory protection and can be removed only for misbehaviour.
“The reason they have this protection is so they can tell the government and the public “home truths” when they are needed,” he will say.
“If the PC is not going to use its statutory independence to tell inconvenient truths, then it is not going to be of much use.
“The Treasury Department has become adept at telling the government the things it wants to hear. The PC will not add very much if it goes down the same path.”
Mr Costello will quote from a September 25 article in The Australian that reported how the Fair Work Ombudsman had entered into enforceable undertakings with a number of universities that resulted in $128m back paid to 50,000 underpaid employees.
He will say that universities are run by highly intelligent people and have enormous resources with HR departments and lawyers on tap. “How is it that these universities all failed to comply with awards,” he will say. “Do you suppose these citadels of woke sat down individually or together to prepare a cunning plan to cheat their employees? Hardly likely. These non-profit organisations are funded with taxpayers’ money. Complying with an award doesn’t cost any person in university management anything at all. It doesn’t cost a shareholder or investor a cent. They have no incentive to cheat. This wasn’t malevolence. Universities have been caught, just like Coles and Woolworths, and the National Australia Bank, by confusing complexity. The “modern awards” that apply to these universities, and to these companies, are so vague and so complex that despite best efforts no one is really sure how to comply strictly with them.”
He will say that employees are at risk of being underpaid while employers are at risk of prosecution, ensuring a system that was “in neither’s interest”.
“There is nothing “‘modern” about these awards. A better name for them would be “arcane awards,” he will say.
“And these are the big employers. What do the companies that can’t afford expensive HR departments, and the fancy lawyers do? They are in a legal minefield.
“This is where the complexity of Australia’s workplace laws lands us. Businesses and universities are scrambling to figure out what duties can be done by what classifications, what hours trigger what breaks and what penalty rates start at what times. No wonder productivity is waning.”
“Let me repeat. No one is trying to cheat anyone here. They run the risk of non-compliance because sane rational people cannot clearly work out what it is that they have to do to comply. Does anyone in a position of influence think this is a problem?”
Mr Costello will say the productivity roundtable came up with no outcomes that would significantly boost our productivity.
“It managed to avoid talking about things that really might make a difference like lower energy costs for business; real tax reform, as opposed to smash and grab raids for revenue; ending wasteful government spending; (and) reforming workplace relations. How can we hope to break the productivity drought when there is no honest analysis of the factors contributing to it?”
