A productivity challenge for Bill Shorten

Australia has a new frontier of employment growth and it's not mining. But this new frontier carries a clear long term danger sign.

Employment Minister Bill Shorten, speaking at CEDA yesterday, revealed that in the last four years 250,000 jobs had been created the health and aged services industry. More significantly that four year increase is more than the actual total employment in the mining industry. And the employment increase in mining has been only half the level of the new jobs generated by the health sector.

It's that investment in health and aged services that has driven employment in the non-mining sectors of the economy.

A large chunk of heath and aged services employment has a sizeable government content in its funding and in many areas there have been few improvements in productivity. Unless we do lift the health sector productivity its unlikely tax revenues will be able to sustain current spending levels let alone more growth given the competition for funds from other sectors.

One of the largest areas of heath employment is hospitals and fortunately new technology gives us the ability to greatly reduce the cost of hospital operations while increasing the service and lowering errors (Giving health a tech checkup, May 10).

And if you don't believe this can be done in 2012 Australia watch the video above.

But around Australia we have people managing and working in hospitals who do not want to change. They gain their expertise in the current environment.

That was exactly what happened at Fairfax and in other companies who ignored what was happening around them.

Bill Shorten is clearly frustrated at the lack of leadership in the total area of Australian productivity and you sense the frustration in these words:

Shorten: "What we need in Australia is more leadership. We need leadership in industrial relations and workplace relations about what is the best practice. Where is our university of leadership? Where are our business skills promoting the skills of understanding of organisational behaviour? Where are we discussing from shop floor right through to boardroom how do we train our best leaders?

"Now there are plenty of individual efforts going on but where's our national focus on leadership in the workplace? Leadership in the workplace is eclectic. It can be the leading hand in an electrical transformer company.
It can be the senior sales person on the retail shop floor. It can be the small business who understands how to work and interact with other contractors.”

Back to health and given the rise in employment and costs we desperately need leadership in our health sectors from the top to the bottom so the new technologies can lift the level of service, cut the error rate, and lower the costs.

It's not going to be easy but unless we act on health productivity, unless we have a new mining boom the increasing costs will force us into horrendous tax bills and the service levels will decline. It's an area Bill where you can show leadership.