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Productivity figures highlight complacency

Tuesday, March 28, 2006

Productivity figures highlight complacency

Government complacency is evident in the productivity figures released to day, the Employers & Manufacturers Association (Northern) says. The figures don't include productivity outcomes in such as government administration, defence, health or education.

"The Government has been reaping the benefits of the reforms in the mid to late 1980's but not added much to them to keep the good times rolling," said Alasdair Thompson, EMA's chief executive.

"The agenda lately has been to redistribute the modest wealth created substantially over the past five years by good weather and world prices for our main exports.

"The legislative programme has been full of new regulations and more compliance for business, not on building a sound foundation for future sustainable growth.

"Our own business prescription to keep employment high and lift our standard of living has just two items; both to achieve higher labour outputs, and neither means working longer hours.

"They are:

* Drop the company tax rate to encourage business to retain earnings and invest more of their profit in skills development, training and new technology. This would increase the value add our goods and services.

* Government to invest far more in developing highly skilled people. Globalisation has increased the demand world wide for higher skills while slashing the demand for lower skilled people who can't hope to compete with low labour cost imports from China and India.

"25 per cent of our students leave school with no qualifications; cutting this figure in half would realise huge productivity gains.

"The Government needs to encourage businesses to invest, and to invest much more itself in ideas, intellect, innovation, infrastructure, initiative, and immigration. These are the potent forces required to keep our productivity and standards of living rising."


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