Treasurer Jim Chalmers has admitted Australia hasn’t taken full advantage of big economic shifts, ahead of a new Productivity Commission report.
The Productivity Commission’s 1000-page inquiry, to be released in full on Friday, will contain 71 suggestions to kickstart Australia’s sluggish productivity performance that’s weighing on personal incomes and overall prosperity.
The report will outline ways the economy can deal with climate change, the digital revolution and global tensions while also aiming to grow the wages of working Australians.
Dr Chalmers said not all the recommendations would be implemented, but there was more work to do.
“There’ll be some conflict with our priorities and values, but overwhelmingly, the directions and the themes set out in the report today are areas that we’re interested in and that we’re progressing,” he told ABC Radio on Friday.
“We’ve got these big shifts in our economy, these big trends and transitions. And we haven’t taken full advantage of that.”
The report will identify five key trends: the growing services sector, the costs of climate change, the need for a more skilled and adaptable workforce, the growing role of data and digital technology and how economic dynamism is impacted by geopolitical tensions.
The blueprint for future productivity growth will contain suggestions to better harness data and digital technology and improve economic dynamism by “fostering competition, efficiency and contestability in markets”.
The report will also outline opportunities to reach net zero emissions while limiting the productivity damage caused by climate change.
Failing to boost Australia’s economic performance will have dire consequences for future living standards, with workers in the future likely to earn less and work more if productivity doesn’t improve.
The treasurer said it was critical for the economy to be made more productive going into the future.
“We won’t don’t want Australians to have to work harder for less money. And one of the reasons why we want to make our economy stronger and more productive is so that we can lift incomes and lift living standards,” he said.
“We haven’t done as good a job as we need to … now, we’ve got this massive opportunity when it comes to technological change, we’ve got this massive opportunity when it comes to cleaner and cheaper, more reliable and increasingly renewable energy.”
Australia is slipping down the global productivity ranks and growth has reached its slowest point in 60 years, averaging 1.1 per cent a year.
Dr Chalmers said despite concerns about lagging productivity levels in the country, he didn’t want Australians to be concerned.
“When Australians hear about productivity, and they see headlines about working longer, for less … I do understand that it makes people worried and that’s not our intention,” he said.
“Our intention is to say, this is what might happen in our economy if we don’t do some of the things that we’re doing right across the board.”
