Australia’s productivity growth has slowed down in the past two decades and is now increasing at its lowest rate in 60 years according to Australia’s Productivity Commission.
Releasing the first interim report of its latest five-year Productivity Inquiry, Chair of the Productivity Commission, Michael Brennan said the country needed to look for new opportunities to drive productivity growth.
“Productivity growth is essential to address the nation’s economic challenges, including rising cost of living pressures, but it is not guaranteed,” Mr Brennan said.
“Nowadays, improvements in service quality and the impact innovative new products and services have on people’s lives matter most,” he said.
“However, the overarching principle of productivity — that we aim to work smarter, not harder or longer — is as important as ever.”
Mr Brennan said the Commission had identified four areas of policy focus that best reflected the challenges and opportunities Australia faced.
He said the key enablers of focus were innovation and diffusion of new processes and ideas; data, digital technology and cyber security; a productivity-friendly business environment; and a skilled and educated workforce.
“These enablers are relevant to our current context — the rising services sector, the challenge of decarbonisation and continued openness to the best the world can offer,” Mr Brennan said.
“But they also reflect our best judgment about where we can achieve the biggest return on our reform effort,” he said.
“They are not specific bets on the future sources of growth, so much as broad settings that stack the odds in Australia’s favour.”
Mr Brennan said the Productivity Commission planned to release interim reports on each of the productivity ‘enablers’ for public consultation shortly.
The Commission’s 89-page interim report Five-year Productivity Inquiry: The Key to Prosperity can be accessed at this PS News link.
