Australia Productivity Growth at 60-Year Low as Reforms Selected

rgsd0r44m4i00]b}6uing[l)_media_dl_1.png Australian Bureau of Statistics

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(Bloomberg) — Australia’s Productivity Commission has identified 15 priority reforms to examine in the course of five inquiries it’s conducting for the government to try to boost economic efficiency and raise living standards.

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Productivity growth is at its “lowest ebb in 60 years,” said Danielle Wood, chair of the commission, highlighting the urgent need to tackle the issue. Australia’s long economic expansion has dulled enthusiasm for politically risky change, leading to calls for a renewed reform agenda as the economy begins to sputter. 

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“Productivity growth isn’t about working harder or about having more stuff,” Wood said. “It’s about making the most of what we have – the skills and experience of our workforce, new technologies, and our resources – so we can get more out of our economy.”

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Tackling productivity is challenging as it often involves difficult change that only pays dividends in later years — offering limited incentives to politicians with the truncated horizon of a three-year parliamentary term. Corporate leaders have been among the most vocal in demanding action on productivity even though business has often failed to improve its own efficiency levels.

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The Productivity Commission is seeking input on areas such as changes to corporate tax, reducing the cost of meeting carbon targets and speeding up approvals for new energy infrastructure, it said in a statement Sunday. The PC also wants to improve students’ results and boost prevention in the care sector.

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The reform areas aren’t recommendations, Wood said. Rather, they are a starting point for research and consultation to ensure the upcoming recommendations are “robust and implementable.” 

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The five inquiries being conducted are:

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Consultation on the reform areas under each of the inquiries will be open from May 19 to June 6 and the respective interim reports will then be delivered through July and August, the PC said. It will conduct further consultation to inform the final inquiry reports that will be delivered to the government in December.

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