16th Aug 2011. Although Australia’s economic performance during the 2000s has been impressive on many dimensions, especially by comparison with that of other ‘advanced’ economies, productivity is not among them. Australia’s productivity performance over the past decade has been, to put it mildly, poor − both by Australia’s own historical standards, and by contemporary international standards.
Areas for focus in this report by Saul Eslake for the Grattan Institute include:
- Regulatory Reform
- Taxation Reform
- Skills and Infrastructure
Australian workers increased their productivity far less in the past decade than in the previous one. They are also increasingly less productive than workers in most comparable countries. Since rising productivity is vital to a strong economy, the problem is serious, even if its consequences are not yet visible. Until recently the official account held that large investments in mining and utilities, and the lag time before they took effect, was driving declining productivity growth, but Grattan Institute research has shown that most industries are suffering the problem.
The consequences of this poor productivity performance have not, as yet, become widely apparent, because they have been masked by a combination of faster population growth (until recently) and the most sustained upswing in Australia’s terms of trade in over a century.