{"id":1110,"date":"2025-05-07T05:26:49","date_gmt":"2025-05-07T05:26:49","guid":{"rendered":"http:\/\/www.cockcrotch.com\/?p=1110"},"modified":"2025-05-12T01:46:16","modified_gmt":"2025-05-12T01:46:16","slug":"labor-says-its-second-term-will-be-about-productivity-reform-these-ideas-could-help-shift-the-dial","status":"publish","type":"post","link":"http:\/\/www.cockcrotch.com\/index.php\/2025\/05\/07\/labor-says-its-second-term-will-be-about-productivity-reform-these-ideas-could-help-shift-the-dial\/","title":{"rendered":"Labor says its second term will be about productivity reform. These ideas could help shift the dial"},"content":{"rendered":"
<\/span> Summit Art Creations\/Shutterstock<\/a><\/span><\/figcaption><\/figure>\n

In his victory speech, Prime Minister Anthony Albanese highlighted social policy as a major factor in Labor\u2019s electoral success, particularly Medicare, housing and cost of living relief. He was justified in doing so. <\/p>\n

But looking forward, Treasurer Jim Chalmers named stalled productivity growth as a top priority for the next three years:<\/p>\n

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The best way to think about the difference between our first term and the second term \u2026[is] the first term was primarily inflation without forgetting productivity, the second term will be primarily productivity without forgetting inflation.<\/p>\n<\/blockquote>\n

The government asked<\/a> the Productivity Commission in December to develop five pillars of its productivity agenda and come up with actionable reforms. And for the first time, the commission went out and sought \u201cproductivity pitches\u201d from anyone in the community. <\/p>\n

Ahead of further reports due out later this year, those community \u201cpitches\u201d offer some clues about where the Albanese government might start to tackle productivity over the next three years and beyond.<\/p>\n

Why does productivity matter?<\/h2>\n

Essentially, productivity is about working smarter, not harder. It\u2019s about efficiency and innovation driving more output<\/a> for an economy or company. Growth in productivity has been the driver of real wage growth and improved living standards since the Industrial Revolution.<\/p>\n

However, productivity performance<\/a> has slumped across most advanced economies. In Australia, growth is the slowest in 60 years<\/a>. This is despite the transformative impact of the internet and digital technologies. <\/p>\n

Explanations of the productivity slowdown are many and varied. Some have suggested the growth of the care economy and the services sector<\/a> more broadly means productivity is reduced. Others wonder whether it can be measured at all in this context. <\/p>\n

The explanation that has gained most acceptance is that productivity has increased dramatically in \u201cfrontier firms\u201d<\/a> at the cutting edge of technological change and business innovation. The problem in Australia is that we have too few frontier firms and too many \u201claggard\u201d companies. The rate of new technology adoption is too slow.<\/p>\n

This problem is made more acute by Australia\u2019s trade and industrial structure, which is heavily weighted to resources exports rather than the knowledge-based industries of the future. <\/p>\n

What is the Productivity Commission looking at?<\/h2>\n

This is the rationale for the Treasurer\u2019s request in December<\/a> for the Productivity Commission to identify priority reforms in five key areas. He asked for \u201cactionable recommendations to assist governments to make meaningful and measurable productivity-enhancing reforms\u201d.<\/p>\n

The five pillars are:<\/p>\n