24 October 2017

Release of PC report on Australia’s productivity performance

The Australian Government welcomes the Productivity Commission’s (PC) report on Australia’s productivity performance.

These are the views and observations of the Commission. This report is not from Government, but produced for all Governments, State and Federal.

Similar productivity agendas from the 1990s were crucial to lifting our productivity. The changes that were made then overhauled old economy regulation - trade liberalisation, reductions in tariffs, widespread reform to capital markets, sale of government assets, changes to labour markets, competition and taxation reform, and better targeting of macroeconomic policy. These changes brought about a new generation of prosperity.

Our challenge now is not just to create more jobs, but, as outlined in this year’s Budget, better paid jobs as well. This is what productivity is all about.

The Commission has sought to bring the productivity agenda up to date and ensure it is aligned with where our economy is today and where it is headed. The new path we are encouraged to embark upon is signposted by a series of key insights pointing to the need for: more integrated and patient centered healthcare to create more healthy workers; a more proactive education system that supports better teaching to create more proficient, more resilient and more adaptive workers; and more functional cities that will not choke our economy.

The Commission continues its advocacy for more efficient Government delivery of non-market services, recognising government performance is critical for productivity with our economy now dominated by services.

And they continue their advocacy for stronger, more efficient and competitive market systems. Like the Harper Review before, the Commission argues this should be done by placing the customer at the apex - not the firm or any service provider.

The report reinforces that the work the Government is already doing will help drive the longer-term health of the country. We are already pursuing a wide range of policies that will help address the issues the PC has identified, and we will continue to make the right choices to secure the better days ahead, producing more and better paid jobs.

This report is the first in a regular series. It will now be undertaken at five-yearly intervals providing an overarching analysis of where Australia stands in terms of its productivity performance.

The Government notes the report recommendations and thanks the PC, and particularly Chair Peter Harris, for their thorough and diligent work.

Mr Harris will present the report to State and Territory Treasurers at the Council of Federal Financial Relations meeting on Friday. The report recommendations will provide a benchmark against which the Commonwealth, together with the States and Territories, can outline progress on improving productivity.

The full report is available on the Productivity Commission website.