Chief economist of Treasury is blaming SMEs as well as second rate management practices for low productivity of Australia. Conversing in Melbourne at the Australian Conference of Economists recently, David Gruen Treasury chief economist said that, there were lots of causes of inferior management practices in the companies of Australia, which include their size which is compared with those in other developed countries.
The review reported that David Gruen has said that, manufacturing of Australia has a greater proportion of very small companies with fewer than twenty employees than almost all other Organization for Economic Co-operation and Development nations", Family-run businesses are liable to exhibit poor management performance. Gruen said that multinationals tended to enforce stronger management practices as well as he urged the government to let businesses being demoralized by the high Australian dollar plus the mining boom to go out of business, caution that propping them up will break productivity. David Gruen heads macroeconomics division of Treasury and told the conference successful commodity prices had delivered straightforward income gains over the past few years but had now passed their peak, which means any future rise in household incomes would have to appear from increasing productivity.
He said that, Central to economic policy of Australia challenges is returning the financial system to a strong productivity expansion trajectory. David Gruen said that, pressure on trade from the mining success could act as an reason for companies to pursue higher efficiency. He said, periods of structural change are usually also periods of growth as well as reform for the financial system as a whole. Pressure on productivity can give a strong momentum for rethinking business models." Although, executive director of the Council of Small Business Australia, Peter Strong, told SmartCompany that David Gruen has "got it totally wrong".
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