Source : THE AGE NEWS
If you’ve ever wondered why Australians live more comfortably now than we did 50 years ago, you’ve pondered the history of “productivity”.
Simply put, productivity means producing more goods and services from the same inputs – often with the aid of new skills or technologies, or by coming up with better ways to do things.
Growing productivity is hard and unfortunately, we haven’t done it much in the past decade, and that’s a big part of why many Australians feel their quality of life has stalled.
Anthony Albanese and Jim Chalmers have a unique opportunity to turbocharge productivity.Credit: Marija Ercegovac
Growing productivity is also absolutely necessary. Without productivity gains underpinning them, wage and cost increases can be inflationary. Indeed, the Productivity Commission estimates that almost all wage growth since Federation has come from higher productivity.
And so, the re-election of the Albanese government, with a significant majority, is an opportunity to finally make productivity progress.
Treasurer Jim Chalmers has made it clear that productivity is a priority for this term of parliament, and business is keen to roll up its sleeves and help progress practical and achievable solutions.
The treasurer has also said that productivity reform has been “focused too narrowly on one or two issues”, and that the task now is “broadening that focus out”.
The challenge, however, is immense. Our productivity growth over the past decade was the worst in 60 years. And yet, with all shoulders to the wheel, and agreement on what can and must be done, we believe Australia is capable of much more over the next decade.
Here’s how: First and foremost, we need to deliver our major projects and endeavours faster. It’s not acceptable that building a renewable energy project in Australia can take more than two years of approvals roadblocks before shovels are in the ground.
Countries that get there faster will deliver better and more outcomes for their citizens, and that’s why we’re determined to work constructively with the government on implementing federal project approvals reforms that get it right for both the environment and for business.
While this should be one of the first cabs off the rank, there’s also a broader opportunity to make our regulation better and more conducive to getting things done.
This is something governments all over the world are grasping with both hands. Indeed, British Prime Minister Keir Starmer has committed to reducing the regulatory burden on British businesses by 25 per cent by the end of his first term.
This is the level of ambition we also need in Australia. If we want to be a more productive nation, we would do well to follow the British example.
To that end, the Business Council of Australia is currently developing a “to-do” list of commonsense improvements to everyday regulation that we will launch and advocate for in coming months. These will be practical and achievable steps for government that can cumulatively deliver substantial benefits. They will focus on the principle that we should regulate only where necessary and, when we do, keep burdens to a minimum.
Lastly, we cannot ignore the role of technology and innovation in our productivity growth to date, and into the future.
That means encouraging our major businesses to conduct much more research and development, and at minimum, increasing our R&D tax incentive expenditure threshold to an indexed $250 million.
It also means taking an optimistic and nationally entrepreneurial approach to the AI evolution.
Driven by incredible leaps in computing power and data, AI has reached a tipping point. It’s by no means an exaggeration to say that what we do now will determine whether our nation is playing catch-up for decades to come or gains a competitive edge that improves all Australian lives.
These points represent a snapshot of the policy fronts on which government, businesses and workers must be united if we’re to improve our productivity in the coming decade. There are other priority areas that would yield significant improvements, including addressing our retrograde taxation system.
It’s also important to note that the business community has long seen fair and balanced industrial relations reform as central to becoming more productive. Our workplace policies must encourage innovation and investment in areas like AI rather than stifling it.
If, however, we want to achieve real change, the most important thing we need is a real mindset shift. Intergenerational equity through higher living standards must be our objective, and that necessitates decisive, substantive productivity-enhancing reform – and we have no time to waste.
Bran Black is Business Council of Australia chief executive
