Treasurer Jim Chalmers has placed productivity at the forefront of Labor’s agenda for its second term, signaling an urgent call for reforms aimed at revitalizing Australia’s economic performance. The Productivity Commission has released 15 draft reform priorities for discussion. Today’s announcement is a clear indicator of the government’s desire to address one of their greatest challenges.
Australian Prime Minister Anthony Albanese is moving to make it happen and promote discussion on this urgent issue. He’s convening a national roundtable to focus on how to improve productivity, for example. The Prime Minister’s approach has been shaped significantly by the long-term historical context laid out by former Labor leader Paul Keating. He once famously joked that even a “resident galah in any pet shop” could pass judgment on micro-economic policy. This comment is particularly prescient given today’s fixation on productivity.
A productivity crisis
Australia has faced a decade of stagnating productivity. Human growth in these suburban areas has been mostly stagnant, with the exception of a short spike during the pandemic. This stagnation is deeply troubling. Our nation is facing a difficult reality where the old means of economic efficiency just doesn’t work from sector to sector.
Chalmers aims to emulate Keating’s legacy by instigating reforms that will not only address existing issues but adapt to the evolving nature of the economy. He’s right to sound the alarm that it’s becoming harder to make headway on productivity. All of the low hanging fruit have already gotten their improvements—expanded capacity.
Fortunately, Industry Minister Tim Ayres has decided to do something to address these challenges. He is dedicated to making workers more powerful, and to developing their voice as technology continues its disruptive march in Australian workplaces. He undertakes to work more closely with trade unions on these efforts.
“I will be looking in particular at how we can strengthen worker voice and agency as technology is diffused into every workplace in the Australian economy. I look forward to working with our trade union movement on all of this.” – Tim Ayres
Plans for a productivity summit in August will bring together employers, unions, and government representatives to discuss the way forward. We are excited business leaders enter this event with a renewed sense of hope, tempered with the reality of their experiences from past summits. The 2022 jobs and skills summit was viewed as mostly about matching what unions want to a government policy wish list.
Features of the upcoming summit Albanese stresses that, unlike previous summits, the goal for this upcoming event is to ensure a more direct and consistent conversation. He stated,
“a more streamlined dialogue than the jobs and skills summit, dealing with a more targeted set of issues” – Anthony Albanese
Even though there is a new emphasis on productivity, advocates fear the government will still fail to produce meaningful results. In the midst of intense partisan battle, historical precedents hold enormous power in political arguments. For example, John Howard’s erratic choice to introduce a GST after he had sworn not to is often referenced in discussions of breaking political promises and reform.
A diverse constituency has their eyes firmly trained on the Albanese administration. Their success hinges on how well the administration can steer through these choppy waters. If the second-term Labor government is remembered for making significant strides in improving Australia’s productivity, it could mark a pivotal achievement for the administration.
