“Gee ma, what was it like before the resources boom started? You know, in the olden days?

“Well son, business invested in a range of industries because they saw growth prospects were good, or they took risks and invested in new areas in an attempt to pioneer the way.

“But then we fell of the growth cliff?”

“That’s right, son. We fell off it in 2017, just like that nice Michael Chaney warned us.”

We’ve been here before, so many times: a senior business figure uses the AFR or The Australian to talk palpable nonsense about the economy, unchallenged by any basic scepticism on the part of the relevant journalist or editors. Yes, we’re tired of pointing out how wrong they are, but we’re not going to stop. This garbage cannot stand unchallenged.

Today is Michael Chaney, who chairs Woodside and the National Australia Bank (and used to run Wesfarmers), who reckons “Australia is likely to fall off a ‘growth cliff’ when the resources investment boom ends in the next few years because the economy is not becoming more productive.

“Economic growth was likely to slow to less than 2.5% after 2015 because of burdens on business, including overlapping state and federal environmental regulations, and Labor’s industrial relations system, which made the workplace less ­flexible, along with other problems,” Chaney is quoted as saying.

No mention of rising labour productivity, or restrained real wages growth under the Fair Work Act. No mention of actual facts.

The AFR and Chaney have again missed the contribution business makes to economic growth and productivity. They would have you believe that business is all-wise, that it makes no mistakes and every investment decision is based on thousands of person-hour testing, studies and manipulation crunching of discounted cash flows and feasibility studies.

That means Chaney’s bank and his other company, Woodside, have crunched the numbers intensively on rising costs for the new $40 billion LNG project the company wants to build, and factored in what the additional competition for scarce resources, such as labour, concrete, steel, etc will do to the feasiblity of the project. They would have asked themselves, for example, “how will the fact that every other resources company in the country is going hell-for-leather trying to develop projects do to the demand for skilled labour for such projects?” Given Chevron is competing for the same resources in building the Gorgon and Wheatstone project, Woodside obviously carefully determined that impact.

No?

These are investment decisions being made by boards and managements in the full knowledge (we hope) that there will be competition for scarce resources, which will force up costs, especially in the remote northwest of WA and offshore. BHP Billiton, Rio Tinto and Fortescue Metals are leading the charge to expand the WA iron ore industry in the same region, which adds further pressure to costs.

It’s not as if the government isn’t bending over backwards to assist the resources industry on this score — virtually throwing open our borders to skilled temporary labour while pumping money into training.

But let’s put those niggles to one side and focus on some other investment decisions. Overnight the huge US investment group, Blackstone bought the failed Top Ryde shopping centre for $A340 million, or less than half its $A720 million or so cost. Blackstone had also bought a loan from Suncorp over a Sydney office building for a 46% discount to face value, and last year acquired the Valad property group at a bargain basement price of $A207 million. The group had a couple of billion of real estate assets in Australia and the UK. Blackstone also bought paid $9.4 billion to Centro Properties for nearly 600 US shopping malls in March. Remember the losses in the various Centro companies total more than $A12 billion since 2007-08.

How is this relevant? They were all funded via loans, equity and other funds (derivatives etc) by banks and investors here and offshore.And they resulted in losses for the investors and financiers, money that could have been used more productively elsewhere. Australian banks and investors seem to have elevated their capacity to lose money in commercial property into some sort of black art form. Dud investments in all sorts of commercial property helped worsen the recession of the early 1990s and pushed Westpac and the ANZ to the brink of collapse. In the GFC, billions were lost in loans to ABC, Babcock and Brown and its various arms, Allco and Tricom, plus Valad, Mirvac, GPT, Citi Pacific, Centro, and other property groups.

And yet no one in business has complained about the waste of capital and the damage these losses and others in Australian real estate, the media (how much lost capital has the Fairfax board presided over in the last decade?) and retailing in recent years, will do to national productivity. For these losses do impact productivity. Capital productivity is just as vital as the productivity of the labour force.

The productivity of capital and the ability of Australian businesses to invest wisely has been a topic of interest this year for Federal Treasury and others who reckon Australian business management lags behind many of its overseas peers. Superannuants and other investors saved the careers of people like Chaney and others in business (including Woodside) by stumping up well over $A100 billion of new capital in the GFC.

The National Australian Bank was one of those saved from itself by shareholders, especially super funds, especially after it invested in more than $A1 billion of financial derivatives in the US that remain on its books and have proven difficult to get rid of. Earlier this month the NAB settled a class action for $85 million over those Collaterised Debt Obligations.

In a display of absolutely impeccable timing, the NAB bought $A1.2 billion of CDOs in late 2007 and early 2008, as the GFC was unfolding. NAB first made a $181 million provision for the CDO exposure in May of 2008, then increased it to $1.1 billion two months later.

No mention from the AFR, or Chaney of that destruction of capital by NAB, which happened on his watch as chairman.

Management bungles and incompetence that cost billions are off-limits for business leaders and their media cheerleaders. The only problems in Australia, apparently, are those damn workers having too many rights.