Productivity

Most economists are still arguing about Australia’s need to ‘improve our living standards’, advocating productivity as the solution. Lachlan Vass, a Fellow of the Tax and Transfer Policy Institute of the prestigious ANU Crawford School of Public Policy, defines productivity as:

Getting more for the same amount of work – working smarter, not longer, and therefore increasing output while at the same time decreasing prices, which in turn delivers an increase in real income.

Many are hoping that the AI Revolution (including AGI), as a transformative general purpose technology that is already on our doorstep, offers the next great boon in productivity. That it will relieve us of the dross and drudge of labour, while we humans get on with the exciting bits. But evidence for this is slim as we begin to see where and how it is now being applied to journalism, recruitment, surveillance, misinformation, propaganda, revenge social media, militarisation.

The dream of ‘productivity’ as more, better, best,  speaks to Modernity’s dream of endlessly improving Prosperity through technological Progress, with no regard as to whether our existing ‘standard of living’ is already ‘enough’, ‘balanced’ or even unnecessarily high in this age of consumption mania—whether of material goods, services or experiences.  

Once upon a time the Great Australian Dream was owning your own home. Today many people aspire to so much more as their idea of a good ‘living standard’—bigger houses with fashion-driven renovations, ensuite bathrooms, private swimming pools, media-entertainment rooms; quality private education for their children; annual overseas holiday travel for that very special ‘selfie’, with an alluring promise of space travel in the future.

But should this be encouraged in a time of projected ecological collapse, global warming, and increasing geo-political instability?

Australians are already chided for building houses that are too large, while at the same time households are getting smaller with single person households and couples with no children.  Should we instead be rethinking housing to include the idea of flexible neighbourhoods and communities, which allow for intergenerational co-living in a variety of housing forms and titles, and a greater mixture of private and socialised provision?

The sort of thinking behind Community Land Trusts, Housing Cooperatives and ecovillages. Does the idea of individual/couple home ownership speak only to a vision of a society of individualism at the expense of community, at a time when we are said to be experiencing a loneliness epidemic, where the population is aging, and where mental health issues linked to anxiety and depression are increasing?

Thinkers such as Thomas Hübl go so far as to suggest that the world is dealing with collective trauma, with the urgent need to engage in processes that integrate our intergenerational and cultural wounds. Wounds we see playing out in the current Gaza-Israeli war, in Sudan, in the Russian war with Ukraine, and in the intractable intergenerational trauma evident among First Nations peoples in Australia, Canada and the USA.

Rethinking Productivity

The Productivity Commission’s 5-Year Productivity Inquiry: Advancing Prosperity (2023) focused on the following key areas to achieving conventional ideas about the link between productivity, prosperity and increasing standards of living:

• Building an adaptive workforce – education, skilled migration, occupational licensing, workplace relations including new platform modes of work
• Harnessing data, digital technology and diffusion – faster and reliable internet access, especially to regional areas, cyber security compliance, diffusion of new knowledge and best practice across the business community, especially small business
• Creating a more dynamic economy – risk protection system to underpin innovative entrepreneurship and the long-term view, investment environment to allow right investment in right places (zoning), tax incentives to invigorate productivity growth, economic resilience through trade and foreign investment
• Lifting productivity in the non-market sector – Implementing best practice resource allocation when funding public infrastructure, using health funding approaches to diffuse innovations, innovation and diffusion within government agencies and regulators
• Securing net zero and adapting to a changing climate at least cost – policy settings that enable and respect private adaptation decisions, elevating the Safeguard Mechanism to be Australia’s primary emissions abatement mechanism, removing emission reduction measures that are not complementary to the Safeguard Mechanism, pursuing a least‑cost approach to securing electricity supply.

However, in this age of the dissolution of the modernity/coloniality era, right before our eyes under Trump 2.0, do we need to completely re-think the meaning of productivity?  Away from ‘more’ with the same amount of work, to the idea of ‘more appropriate‘ for the range of needs that constitute a sustainable ‘good life’ for the many—delivering more social harmony and community safety and security through the lived experience that we are ‘all in this together’: not in a zero-sum game of ‘me-first’, winner takes all.

This reminds me of the argument about evolution. Is the trajectory of evolution on Planet Earth about the survival of the fittest, the dog-eat-dog idea of winner takes all? Or is it about the survival of the most fitting—the complex relational logic that comprises the way ecological systems work from ace predator animals down to bacteria, parasites and viruses? And is this the nature of the dilemma currently confronting humanity? Have we reached a point where we are no longer the most fitting for the survival of the larger whole, of which we are but a part? Does this ancient wisdom inform the emphasis Indigenous cultures put on Caring for Country as LAW, embedded in the very logic of life on Earth?

Just as economists have discussed the inadequacy of GDP as a measure of economic growth, and the need to develop measures of wellbeing to assess the health of an economy-society, so we need to develop new measures of what actually constitutes the sort of productivity we want. This seems especially important as we face the potentially disruptive tsunami of AI on employment, media ecologies, and weapons of armed conflict and political surveillance.

We say we recognise that it ‘takes a village to grow a child’. As attachment theory has demonstrated, children are highly vulnerable to adverse childhood trauma where they grow up in emotionally and physically insecure environments, and which sets them up for long term psychological difficulty. Thus, the nuclear family, including single person families, without access to wider extended family or community support sits in a very vulnerable position when trying to provide adequate support to ensure the wellbeing of children. This is particularly true for children who have experienced violence—either domestic violence, or conflict-based community violence, which is prevalent in refugee communities.

Surely the problem we face in a country such as Australia is not the quanta of goods and services we produce for our labour and material costs, but other important considerations:

Equity in the distribution of these goods and services across all demographic groups

Efficacy—are the goods and services we are producing fit for purpose in a world that is being radically transformed by technology, climate change and geo-politics?

Environmental sustainability—the impact on ecological health for bioregional sustainability, which in the Australian context should include the broader eco-spiritual ethos of Caring for Country, in its many dimensions as the fundamental LAW of the cultural foundations of this country, embedded in our history for more than 65,000 years of continuous cultural bioregional adaptation to bioregional sustainable living.

A child poverty report reveals that 761,000 children, or 16.6% of all children, were living below the poverty line, which is defined as 50% of the median income. This figure rose to 823,000 children in 2022. Single parent families represent 14.7 percent of families, hence there are 367,000 children in single parent families living below a 50 percent median poverty line. Rental costs for the average family rose 11.2 percent between 2020 and 2022, while rental costs for lower income families rose faster still, at 17.8 per cent. And, as we all recognise, these levels of impoverishment are highest among First Nations communities, particularly those living in rural and remote areas of Australia. Levels of impoverishment that have continued to rise through 2024-2025 under inflation and geo-political instability.

The Great Australian Dream

The great Australian Dream was once about an almost universal expectation of individuals and families having access to home ownership, able to be serviced on mortgages affordable on median incomes. It harks back to the 1950s, when this was possible on the single income of a male ‘breadwinner’ whose wife could stay at home and raise the children.

Much has changed since the 1950s, when the Commonwealth Government was active with State Governments in building public housing. The Commonwealth Housing Commission was established in 1943 on the rationale that “it has been apparent, for many years, that private enterprise, the world over has not adequately and hygienically been housing the low-income group”. The Commission, therefore promoted housing as a right for all Australians that should be targeted to low-income workers on a user-pays basis.

However, under the Liberal Menzies Government, by the late 1950s public housing was no longer envisaged as housing for working families, but only for ‘welfare’ cases—high-needs demographics affected by unemployment, family breakdown, lack of education and skills, and health issues that prevented them being able to ‘get ahead’ under their own steam. Instead, the solution to the Australian Dream was focused on private home ownership by all, and encouraging private investment into housing for rental, for those who could not afford home ownership.

Since 1987 under the Liberal Howard Government, to encourage such private investment, under the Australian taxation system housing investors can take advantage of negative gearing (reducing their taxable wage income by losses on investment property incomes) and capital gains tax (GCT) concessions, as long as the property is not sold earlier than 12 months. According to the Australian Taxation Office, about 2.25 million individual tax payers (21% of all individual tax payers) claimed deductions against rental income for a total 3.25 million properties in 2020-21 financial year.

Given the recent acceleration in house prices, it is estimated that negative gearing and the CGT discount cost the budget around $20 billion per year, more than twice the $8.4 billion state and territory governments spent on public and community housing in 2022-23. A new analysis by the Parliamentary Budget Office, commissioned by the Australian Greens Party, shows the cost of negative gearing and capital gains tax discounts will skyrocket to $180.5b over the next 10 years (2026-27 to 2035-36).

That is a lot of forgone revenue to the budget, which is required to fund the sort of public services and goods everyone is demanding: forgone revenue that largely benefits the already privileged members of our society, thus increasing inequality and intergenerational conflict.

Great Australian Housing Crisis

Given that the Great Australian Dream has now become the Great Australian Housing Crisis, there is now a great deal of scrutiny on the collapse of the dream of home ownership or affordable rentals, and its implications for intergenerational wealth inequality. There are several threads to this story:

Housing supply and location—how to deliver more housing in the right location, more quickly, to meet the needs of a population that is growing through continued migration, particularly for essential workers such as nurses, doctors, teachers, police officers, and especially those required to support 24/7 services in health, security and emergency services.

• This involves issues such as planning and building regulations managed by State and Local governments
• Availability of workers skilled in house building and infrastructure
• Building material supply chains and the cost of building materials
• Innovation in house building methods
• Building more affordable rental accommodation
• Building more social and affordable housing for people on low incomes
• Building more social housing to meet the needs of those impacted by domestic violence, disability or special needs

Financing home ownership—how to help first home buyers, with an emphasis on young people, to enter the market through various means, especially for those without access to the ‘bank of Mum and Dad’, but crucially without driving up the cost of housing through increased competition for available housing stock, especially that which is well located. Thus advocated measures in the current election campaign are criticised for doing precisely this.

• Reduce the required deposit (5% guarantee scheme)
• Access private superannuation account for the deposit to be repaid in a period of time
• Provide a tax deduction on the interest cost of mortgage payments for a period of time

Climate change and sustainability—what this means for home ownership in relation to places regarded as high risk for flooding, bushfires, cyclones or severe drought/water scarcity, with 2 degrees global warming by 2050 more or less now baked in:

• Relocation of homes from flood prone lands, eg Lismore, Shepparton and other areas and ruling out further housing development on flood plains
• Design of housing to mitigate flood, fire, cyclone risks, water scarcity, heat
• Access to insurance required for bank financing of housing
• Building materials and energy efficiency to future proof housing for further global warming and extreme weather events.

Addressing cost and security of renting as a long term form of housing for many

• Finding ways to manage rent increases in privately owned rental properties so they remain affordable
• Ensuring security of tenure for tenants – eg. for at least 5 years
• Balancing the rights of tenants and landlords with regards to repairs and the standard of properties available for rental.

The Good Life

What is a ‘good life’ we should aspire to in terms of living standards?

In the current political campaign to elect a new government for Australia on 3 May 2025, we hear that the ‘Australian dream’ is to own your own home (or have a secure affordable rental home), to have a secure job commensurate with your skills and qualifications, a work-life balance that enables you to thrive and look after your family, and have access to free education, including universal free pre-school care/learning, and basic health services.

But that is not what ‘productivity’ has been delivering since the world embraced neo-liberal economic theory based on the marketisation of the dream. Houses are no longer homes, but financialised as an investment asset class. Jobs are no longer secure but increasingly precarious, with neo-liberalism determined to smash union collective power to bargain with the employer class—representing the interests of business (big, medium and small). Servicing a home mortgage or paying the rent now requires both parents with children, even young children, to work long hours, often lengthened by long commutes between where they can afford to live, and where the jobs are located. Children, even in affluent families, are no longer living in homes where their parents are time-rich in meeting their needs, while at the same time they are exposed to more and more pernicious forms of media intrusion into their emotional lives, friendship networks, and capacity for intellectual focus and maturation.

The Australian citizenship test for migrants wanting to live in Australia asserts that Australian values include freedom, respect, fairness and equality of opportunity, and living out these values in daily life along with respect for the rule of law, under which all Australians are treated as equal (regardless of wealth, age, ethnicity, race, religion or gender). To ensure this, individual freedoms of speech and association are balanced with laws that prohibit racism, violence and abuse (physical or online), including within the family unit, and requires all Australians to practice tolerance of views that may conflict with their own in terms of religion, ethnicity, gender and politics. The citizenship test also emphasises the importance of community contribution through volunteering and participating in society with the idea of ‘mateship’ encompassing this idea of giving a helping hand to those in need, whether as a result of family crisis, weather events, or accidents.

In particular Australians are said to highly value the idea of a ‘fair go’, which speaks to equality of opportunity, and fairness and transparency in decision making—whether in politics, sport or before the law, without regard to gender, ethnicity, race, religion or wealth. The ‘social class’ markers of Britain and much of Europe that speak to pre-Industrial times are, in Australia, replaced by markers of educational attainment, job status and personal wealth, which are theoretically open to all based on merit and effort so that markers of ethnicity/race, especially in avowedly multicultural Australia, are gradually diluted over time.

However, the reality is some groups are more marginalised than others, based on distinct ethnic and/or religious markers as well as cultural differences. The latter particularly applies to Aboriginal and Torres Strait Islander peoples whose culture is embedded in the pre-colonial landscape based on eco-spiritual values expressed through songlines and ceremonial knowledge and practices, held in sacred trust by Elders.

These sit in stark opposition to the transactional nature of European-based attitudes to nature as an economic resource—whether for wealth extraction (mining, farming, fishing, timber harvesting) or leisure, including ideas of the binary split between areas of protected ‘wilderness’ and those for human habitation. The legacy of forced dispossession from their traditional lands, along with forced cultural and language suppression (epistemic violence) has left a legacy of unresolved intergenerational trauma, which is expressed in the extremely high rates of criminal incarceration of Indigenous people in Australia, especially among youth, high rates of youth suicide, and the high rates of domestic violence and separation of children taken into ‘care’ through government intervention.

Thus, the idea of increasing productivity, as defined by Vass as the recipe for improved living standards, is devoid of meaning in the context of Indigenous knowledge systems, which are based on a community-relationist ethos rather than the individualist–extractivist ethos of mainstream economic thinking.  It is also devoid of meaning for the increasing numbers of non-Indigenous Australians who feel alienated and alone in a world of increasingly transactional extractivist thinking, where the promise or more consumerism and competitive individualism no longer feels very appealing as a recipe for the ‘good life’.

Further, as we assert our membership of the Pacific Family, we must recognise that our ‘First World’ Euro-American ability to enjoy an increase in real income through access to cheaper goods and services has come about through the systematic exploitation of others—the labouring classes of China, SE Asia, Mexico, Africa and the Pacific toiling away for low wages, largely unregulated working conditions, including health and safety, hours of work, and security. Just as our previous access to improved standards of living via the industrial revolutions of the 19th and 20^th centuries depended on the ruthless exploitation of natural resources and human labour, and the privatisation of land (closure of the commons or expropriation of native lands) for property-based wealth transaction.

Beyond the Modernity/Coloniality Era

Scholars such as Vanessa de Oliviera-Andreotti, whom we have referenced in many of our blog posts, have named this world order Modernity/Coloniality, forcing us to recognise that for all Modernity’s claims of liberalism, rationality and humanism, with its ideas of progress and prosperity for all as a socio-cultural system, it has rested on its shadow side, coloniality.

As we consider the impact of the American-First regime of Trump 2.0, for many it is seeing the band-aid ripped off the true nature of American society and its dream of ‘get rich’ as one of ruthless extractivism and competitive individualism, thinly veiled over with ideas of individual freedom, free speech and compassionate philanthropy under a ‘rule of law’ by which everyone was innocent until proven guilty, and under which everyone was equal regardless of gender, religion or ethnicity. The demographics of the imprisoned tell another story, both in the US and here in Australia.

However, as Daniel Pinchbeck points out in his essay on how to survive America, although Trump’s Project 2025 apparatchiks have removed not only climate protections but even the phrase ‘climate change’ from government websites, that does not change the brutal reality of biospheric breakdown. Meanwhile, while among these apparatchicks there is debate over whether that new system will be a theocracy or a technocracy, in either case it will be an authoritarian government in which power and money concentrate in a very few hands.

As has been demonstrated since Trump took office as President of the US, the plan involves overwhelming the country with rapid, shocking actions while they subvert the election system to entrench permanent one-party rule.

Taking lessons from martial arts, such as Aikido, Pinchbeck suggests that in order to effectively counter the current authoritarian takeover, Americans like him must define a kind of martial arts approach that does not directly oppose the power structure, but works with the system to turn its own momentum against it.  He envisages that instead of the organising principle of the nation state based on physical territory, there will be a digital membership-based network society. Over time, this network may assimilate physical territory—forming an archipelago of autonomous zones to host events, research projects, and community living experiments.

To some extent we see elements of this vision already occurring as a mycelium-like network of digital networks, like-hearted community groups, and projects-in-place, charting alternative ways of living and ‘making sense of things’, which we have called the paradigm shift to an Enlivenment Worldview—an underground cultural revolution occurring beneath the noise of mainstream media, policy wonks and academia.

For his more ambitious idea, Pinchbeclk draws on the example of the historic Iroquois Confederacy, 1142-1450 (CE), one of history’s oldest participatory democracies through its Great Law of Peace, which unified five (later six) nations—Mohawk, Oneida, Onondaga, Cayuga, and Seneca, with the Tuscarora joining in the early 18th century. Decisions required consensus rather than majority rule, with extensive deliberation continuing until agreement could be reached. The constitution carefully delineated powers between local communities, individual nations, and the confederacy, creating a political system where authority flowed from the people upward rather than from rulers downward. Further, women, as ‘clan mothers’ held significant political power within this system. The Confederacy’s economic system emphasised sustainable resource management and collective welfare, with the concept of “seven generations” guiding decision-making—leaders were obligated to consider how their actions would affect descendants seven generations into the future.

Many of these same ideas inform contemporary discussions among First Nations peoples across the world in thinking about how their Indigenous knowledge systems might offer pathways through the debris of the collapse of Modernity/Coloniality that has happening now, in real time.