Australia can’t ignore its productivity challenge

17 March 2023

Australia can’t afford to leave yet another Productivity Commission inquiry report gathering dust in the national bottom drawer, Business Council chief executive Jennifer Westacott said.

“Productivity is more than a buzzword – it plays out in the real world and Australians are living the consequences of more than a decade of slowing productivity growth right now.  

“Productivity isn’t about working harder for less. Building a more productive economy means driving the investment that lets technology cut down on the hours nurses spend doing paperwork or building new infrastructure that gets more products to lucrative export markets faster and more efficiently.

“Crucially, productivity also drives down the cost of goods and services for consumers. For example, it is productivity gains that mean a loaf of bread costs the equivalent of about 4 minutes of work at the average wage today, compared to about 18 minutes in 1901.

“Faster productivity is the ticket to higher sustained wage growth for Australians. But, on our current path, we risk stagnation.

“The Commission is right to target the key areas for action when it comes to workforce adaptability, the need to better harness data and technology, decarbonising at least cost, building a more dynamic economy and reforming the non-market sector to deliver better services at lower cost.

“There are two ingredients to fixing Australia’s productivity problem, government action and private investment. To deliver for Australians we have to get the settings right to unleash private sector balance sheets, attract new investment and drive innovation. 

“This isn’t about working harder for less. Productivity is about creating more value by doing things differently, by using new technology, putting improved systems in place and doing processes in new ways.

“And it’s about avoiding own goals like workplace relations changes that leave our feet stuck in the cement of complexity and disruption.

“Reform isn’t easy and businesses are ready to work with government to build the more productive economy that delivers for Australians.

“Today’s Productivity Commission report will take time to work through, but it is a critical blueprint for a more dynamic and productive economy that can deliver the living standards and opportunities Australians expect.”


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