1 00:00:00,200 --> 00:00:02,480 Speaker 1: Changes come out of scrutiny week already, We've only had 2 00:00:02,520 --> 00:00:04,840 Speaker 1: one day of scrutiny week and look what happened. The 3 00:00:04,840 --> 00:00:08,080 Speaker 1: Finance Minister confirmed the government intends to have performance based 4 00:00:08,080 --> 00:00:10,880 Speaker 1: pay for public service CEOs A labor of course. Don't 5 00:00:10,960 --> 00:00:12,360 Speaker 1: like that at a time when a lot of people 6 00:00:12,360 --> 00:00:14,720 Speaker 1: are getting laid off. Info twix chief economist Brad Olsen 7 00:00:14,800 --> 00:00:16,320 Speaker 1: is with us on this. Brad, a very good morning 8 00:00:16,320 --> 00:00:19,000 Speaker 1: to you. Good morning, call me completely out of touch. 9 00:00:19,000 --> 00:00:22,040 Speaker 1: I would have assumed that CEOs anywhere had performance pay 10 00:00:22,079 --> 00:00:24,439 Speaker 1: as part of their package as standard. Is clearly not 11 00:00:24,560 --> 00:00:26,560 Speaker 1: the case, well. 12 00:00:26,360 --> 00:00:28,680 Speaker 2: Certainly not for the public service in recent times. I 13 00:00:28,680 --> 00:00:31,880 Speaker 2: mean it got changed under this previous government. It's also 14 00:00:31,960 --> 00:00:33,520 Speaker 2: one of those things when you look at the numbers, 15 00:00:33,520 --> 00:00:35,840 Speaker 2: but we're not talking, of course, huge numbers of people. 16 00:00:36,080 --> 00:00:38,520 Speaker 2: If you look at government data, even back in twenty 17 00:00:38,560 --> 00:00:42,080 Speaker 2: sixteen when it was happening, only around one four hundred 18 00:00:42,080 --> 00:00:45,760 Speaker 2: odd people getting performance paid, three percent of the total workforce, 19 00:00:46,000 --> 00:00:48,920 Speaker 2: and the average value was only like two seven hundred dollars. 20 00:00:49,000 --> 00:00:52,520 Speaker 2: I mean, it's not big numbers that we're talking about here, 21 00:00:53,120 --> 00:00:55,000 Speaker 2: but it does seem to be something the government wants 22 00:00:55,000 --> 00:00:57,960 Speaker 2: to incentivize because they are trying to get some big 23 00:00:58,000 --> 00:01:01,720 Speaker 2: gains and some changes the government's trying to achieve, and 24 00:01:01,720 --> 00:01:04,040 Speaker 2: they want to tie performance or a bit more of 25 00:01:04,040 --> 00:01:06,559 Speaker 2: that pay for chief executive through to those results instead 26 00:01:06,560 --> 00:01:08,760 Speaker 2: of just saying no matter what happens, no matter if 27 00:01:08,760 --> 00:01:10,720 Speaker 2: you hit your targets or not, everything is just going 28 00:01:10,760 --> 00:01:13,119 Speaker 2: to be the same every year, no change. 29 00:01:13,160 --> 00:01:14,040 Speaker 1: Do you reckon would? 30 00:01:15,480 --> 00:01:18,120 Speaker 2: I think it's got the potential to. I mean, it's 31 00:01:18,160 --> 00:01:21,640 Speaker 2: not the sort of thing that is hugely usual across 32 00:01:21,640 --> 00:01:23,920 Speaker 2: the board. I mean, there were some international comparisons done 33 00:01:23,959 --> 00:01:26,880 Speaker 2: back in twenty thirty give you a bit of an idea. 34 00:01:27,200 --> 00:01:29,640 Speaker 2: New Zealand at that time had about thirty six percent 35 00:01:30,760 --> 00:01:34,560 Speaker 2: of people who were getting performance pay of some description. 36 00:01:35,200 --> 00:01:37,240 Speaker 2: You know, that compared to around sort of twenty nine 37 00:01:37,280 --> 00:01:39,560 Speaker 2: percent in Australia that you looked across some parts of 38 00:01:39,600 --> 00:01:41,759 Speaker 2: Southeast Asia, and that's sort of in the sixty seventy 39 00:01:41,760 --> 00:01:43,680 Speaker 2: percent change where you know a lot of people are 40 00:01:43,680 --> 00:01:45,760 Speaker 2: seeing that sort of incentive. So, I mean, it's one 41 00:01:45,800 --> 00:01:48,200 Speaker 2: of those things. Some of the international literature isn't particularly 42 00:01:48,240 --> 00:01:50,880 Speaker 2: strong on it, but I think it's again we're not 43 00:01:50,920 --> 00:01:53,080 Speaker 2: talking about sort of making I don't know, forty fifty 44 00:01:53,080 --> 00:01:55,960 Speaker 2: percent of their pay at risk, sort of more providing 45 00:01:56,000 --> 00:01:58,720 Speaker 2: that incentive for them to really press a bit harder. 46 00:01:58,800 --> 00:02:02,960 Speaker 2: Now already public service chiefectives, they don't go to work 47 00:02:03,000 --> 00:02:05,280 Speaker 2: to try and get better pay. So I don't think 48 00:02:05,720 --> 00:02:09,000 Speaker 2: there's possibly an argument, Mike that it might not incentivize 49 00:02:09,040 --> 00:02:12,519 Speaker 2: them hugely, but surely again it's a bit more maybe reflective, 50 00:02:12,520 --> 00:02:14,959 Speaker 2: not of fully incentivizing them, but saying that, look, you've 51 00:02:14,960 --> 00:02:17,920 Speaker 2: got to get deliver some results that stack up. Otherwise 52 00:02:18,000 --> 00:02:19,920 Speaker 2: there is a bit more variability and how much you 53 00:02:19,960 --> 00:02:20,400 Speaker 2: get paid. 54 00:02:20,560 --> 00:02:22,799 Speaker 1: While I've got your Q one Thursday, what do you reckon? 55 00:02:24,120 --> 00:02:26,840 Speaker 2: We're currently picking an increase and in fact I think 56 00:02:26,840 --> 00:02:29,520 Speaker 2: we're picking the biggest. Well, the thing here is that 57 00:02:29,560 --> 00:02:32,560 Speaker 2: I think you've got some of the weird seasonalities that's 58 00:02:32,600 --> 00:02:35,440 Speaker 2: going to sneak in. The likes of retail activity was 59 00:02:35,480 --> 00:02:39,200 Speaker 2: actually up in the quarter compared to the end of 60 00:02:39,280 --> 00:02:40,960 Speaker 2: last year, but part of that, I mean, there's all 61 00:02:41,000 --> 00:02:44,160 Speaker 2: sorts of weird Intrica season here. Remember we're also coming 62 00:02:44,200 --> 00:02:46,640 Speaker 2: off the back of having Cyclone Gabriel in the first 63 00:02:46,680 --> 00:02:49,440 Speaker 2: quarter last year, so that comparison is going to mix 64 00:02:49,440 --> 00:02:52,040 Speaker 2: it up, particularly for the primary sector. You've got the 65 00:02:52,160 --> 00:02:55,400 Speaker 2: likes of an extra day in February, which again just 66 00:02:55,440 --> 00:02:57,360 Speaker 2: adds a little bit more to all of the numbers. 67 00:02:57,720 --> 00:03:00,720 Speaker 2: But I think that again there's enough other parts of 68 00:03:00,760 --> 00:03:03,920 Speaker 2: the economy that are weak. Construction activities down what four percent, 69 00:03:04,720 --> 00:03:07,320 Speaker 2: the likes of concrete volumes of down eleven percent over 70 00:03:07,320 --> 00:03:09,760 Speaker 2: the last year, So I think you might see maybe 71 00:03:09,760 --> 00:03:11,960 Speaker 2: a little bit of a bubble up in this first quarter, 72 00:03:12,000 --> 00:03:13,720 Speaker 2: but it's not necessarily a good news story. 73 00:03:13,800 --> 00:03:16,040 Speaker 1: All right, Well, I hope you're right. Brad Olson in 74 00:03:16,080 --> 00:03:17,880 Speaker 1: for Metrics Bullish as always. 75 00:03:18,760 --> 00:03:21,680 Speaker 2: For more from the Mic Asking Breakfast, listen live to 76 00:03:21,800 --> 00:03:24,840 Speaker 2: news talks there'd be from six am weekdays, or follow 77 00:03:24,880 --> 00:03:26,400 Speaker 2: the podcast on iHeartRadio.