The Budget’s higher education initiative and the ALP’s proposal to upgrade technical education are both sound policies and should be implemented irrespective of which party wins the next Federal election.

Innovative spending on education is needed to overcome our ongoing “productivity crisis”. As the Harvard competitiveness guru Michael Porter puts it, ‘productivity is the prime determinant in the long run of a nation’s standard of living’. The graph shows the potential to do better by again getting closer to US productivity levels.

Australia’s newly flexible workplace relations laws will increase Australia’s productivity in the long run – by encouraging an allowing unskilled workers to get into the workforce – but almost by definition reduce productivity in the short run. Simply compare the growth of employment at 3.1% over the past year with growth of GDP, probably not much higher.

The can be no argument that a better educated population will be more productive, and in the long run WorkChoices provides added incentive for employers to provide on the job training.

Mike Sketetee wrote on Wednesday:

In 2005, 55 per cent of 55- to 64-year-olds were in the workforce in Australia compared to 86 per cent in Iceland, 73 per cent in Sweden and 71 per cent in New Zealand. That puts us 13th out of 30 OECD countries. For women between 25 and 44, we did worse, ranking 23rd out of 30. But for so-called prime-age males – those between 25 and 54 – we did even worse at 25th.

These comparisons show another way in which Australia’s economic performance can be boosted. As the Treasurer has said, its all about “productivity, participation and population”.

It is no doubt obvious to Kevin Rudd and the ALP (and to Messrs Howard and Costello) that there are over one million mainly unskilled Australians who are un- and under-employed, and the official ABS unemployment rate of 4.4% is far too optimistic, and therefore talk of a rate rise based on this statistic is also nonsense.

Henry was repeatedly told by his father that every person needs a trade, and doubtless John Howard’s father and Peter Costello’s father said similar things. The Government should accept and implement the ALP’s education and training policy immediately – there is certainly enough money sloshing around in the Treasury’s coffers!

In international news, Wall Street overnight suffered its worst trading day since the index plunged 242-points on March 13. Three retail giants, Wal-Mart Stores Inc., J.C. Penney Co. and Federated Department Stores Inc., said business fell in April, indicating that tonight’s retail trade figures may add to concerns that the economy is slowing too quickly.

The price of a gallon of ‘gas’ has now jumped to $3.05 this week, two cents from the nominal high – and the ABC News/Washington Post Consumer Index has recently fallen to six-month lows. 

Read more at Henry Thornton.