Why we face ‘anaemic growth in living standards'
Rising export prices for commodities such as iron ore and coal generated a national income windfall since the early 2000s by allowing people to consume more imports for a given amount of exports.
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The Advertiser
3 hours ago
- The Advertiser
'Trade-offs' on cards to get productivity back on track
Australians are being warned to prepare for trade-offs in areas such as housing if the nation's productivity push is to be successful. Productivity Commission chair Danielle Wood is calling on Australia to adopt a "growth mindset" to prioritise economic outcomes and boost living standards. That means changing corporate taxes to promote investment, simplifying regulations, speeding up housing and energy approvals and ensuring AI adoption is not undermined by unnecessary regulation, among other suggestions. It comes as the commission prepares to release a series of reports detailing how Australia can get productivity moving again. "Australia should be a place where children born today can expect to live better and more prosperous lives than the generations who have come before them,'' Ms Wood said. "Productivity growth is essential to fulfilling that promise." But productivity growth has plummeted in recent years. How much Australia produces with the same amount of workers has grown at just under 0.4 per cent per year since 2015, compared with the 60-year average of 1.6 per cent. That's been caused in part by governments ignoring or minimising economic growth when making policy choices in recent years, according to a paper released by the commission. Policymakers have made it harder that it should be to start a business or build essential infrastructure such as housing or renewable energy because they have failed to weigh trade-offs effectively, been too risk-averse or "overly influenced by vocal stakeholder groups". Governments must balance competing objectives and make choices that improve Australians' overall wellbeing, even if those decisions might negatively affect other goals. "Bringing a growth mindset to policy decisions means elevating economic growth and its benefits,'' Ms Wood said. "That doesn't mean policymakers should ignore other objectives, but it does mean being clear-eyed about the trade-offs." The paper lays the groundwork for five forthcoming reports the commission is preparing to release before an economic roundtable convened by Treasurer Jim Chalmers. He said the report made clear the productivity problem had been around for decades and almost every comparable country had the same challenge. "The best way to strengthen our economy and make it more productive is to work through the issues in a methodical and considered way in collaboration with business, unions and the broader community," Dr Chalmers said. In its submission to the roundtable, a joint group of industry associations including the Business Council of Australia and the Australian Chamber of Commerce and Industry outlined four priority areas for reform. They include reforming research and development funding models to boost innovation; cutting the regulatory burden by 25 per cent by 2030; co-ordinating and unifying planning processes to speed up project approvals; and committing to comprehensive tax reform. "We need to cut unhelpful red tape, streamline planning, fix the tax system and improve incentives for investment," Business Council chief executive Bran Black said. "These policies can deliver benefits for economic activity across the whole country and importantly ensure future generations aren't worse off." Australians are being warned to prepare for trade-offs in areas such as housing if the nation's productivity push is to be successful. Productivity Commission chair Danielle Wood is calling on Australia to adopt a "growth mindset" to prioritise economic outcomes and boost living standards. That means changing corporate taxes to promote investment, simplifying regulations, speeding up housing and energy approvals and ensuring AI adoption is not undermined by unnecessary regulation, among other suggestions. It comes as the commission prepares to release a series of reports detailing how Australia can get productivity moving again. "Australia should be a place where children born today can expect to live better and more prosperous lives than the generations who have come before them,'' Ms Wood said. "Productivity growth is essential to fulfilling that promise." But productivity growth has plummeted in recent years. How much Australia produces with the same amount of workers has grown at just under 0.4 per cent per year since 2015, compared with the 60-year average of 1.6 per cent. That's been caused in part by governments ignoring or minimising economic growth when making policy choices in recent years, according to a paper released by the commission. Policymakers have made it harder that it should be to start a business or build essential infrastructure such as housing or renewable energy because they have failed to weigh trade-offs effectively, been too risk-averse or "overly influenced by vocal stakeholder groups". Governments must balance competing objectives and make choices that improve Australians' overall wellbeing, even if those decisions might negatively affect other goals. "Bringing a growth mindset to policy decisions means elevating economic growth and its benefits,'' Ms Wood said. "That doesn't mean policymakers should ignore other objectives, but it does mean being clear-eyed about the trade-offs." The paper lays the groundwork for five forthcoming reports the commission is preparing to release before an economic roundtable convened by Treasurer Jim Chalmers. He said the report made clear the productivity problem had been around for decades and almost every comparable country had the same challenge. "The best way to strengthen our economy and make it more productive is to work through the issues in a methodical and considered way in collaboration with business, unions and the broader community," Dr Chalmers said. In its submission to the roundtable, a joint group of industry associations including the Business Council of Australia and the Australian Chamber of Commerce and Industry outlined four priority areas for reform. They include reforming research and development funding models to boost innovation; cutting the regulatory burden by 25 per cent by 2030; co-ordinating and unifying planning processes to speed up project approvals; and committing to comprehensive tax reform. "We need to cut unhelpful red tape, streamline planning, fix the tax system and improve incentives for investment," Business Council chief executive Bran Black said. "These policies can deliver benefits for economic activity across the whole country and importantly ensure future generations aren't worse off." Australians are being warned to prepare for trade-offs in areas such as housing if the nation's productivity push is to be successful. Productivity Commission chair Danielle Wood is calling on Australia to adopt a "growth mindset" to prioritise economic outcomes and boost living standards. That means changing corporate taxes to promote investment, simplifying regulations, speeding up housing and energy approvals and ensuring AI adoption is not undermined by unnecessary regulation, among other suggestions. It comes as the commission prepares to release a series of reports detailing how Australia can get productivity moving again. "Australia should be a place where children born today can expect to live better and more prosperous lives than the generations who have come before them,'' Ms Wood said. "Productivity growth is essential to fulfilling that promise." But productivity growth has plummeted in recent years. How much Australia produces with the same amount of workers has grown at just under 0.4 per cent per year since 2015, compared with the 60-year average of 1.6 per cent. That's been caused in part by governments ignoring or minimising economic growth when making policy choices in recent years, according to a paper released by the commission. Policymakers have made it harder that it should be to start a business or build essential infrastructure such as housing or renewable energy because they have failed to weigh trade-offs effectively, been too risk-averse or "overly influenced by vocal stakeholder groups". Governments must balance competing objectives and make choices that improve Australians' overall wellbeing, even if those decisions might negatively affect other goals. "Bringing a growth mindset to policy decisions means elevating economic growth and its benefits,'' Ms Wood said. "That doesn't mean policymakers should ignore other objectives, but it does mean being clear-eyed about the trade-offs." The paper lays the groundwork for five forthcoming reports the commission is preparing to release before an economic roundtable convened by Treasurer Jim Chalmers. He said the report made clear the productivity problem had been around for decades and almost every comparable country had the same challenge. "The best way to strengthen our economy and make it more productive is to work through the issues in a methodical and considered way in collaboration with business, unions and the broader community," Dr Chalmers said. In its submission to the roundtable, a joint group of industry associations including the Business Council of Australia and the Australian Chamber of Commerce and Industry outlined four priority areas for reform. They include reforming research and development funding models to boost innovation; cutting the regulatory burden by 25 per cent by 2030; co-ordinating and unifying planning processes to speed up project approvals; and committing to comprehensive tax reform. "We need to cut unhelpful red tape, streamline planning, fix the tax system and improve incentives for investment," Business Council chief executive Bran Black said. "These policies can deliver benefits for economic activity across the whole country and importantly ensure future generations aren't worse off." Australians are being warned to prepare for trade-offs in areas such as housing if the nation's productivity push is to be successful. Productivity Commission chair Danielle Wood is calling on Australia to adopt a "growth mindset" to prioritise economic outcomes and boost living standards. That means changing corporate taxes to promote investment, simplifying regulations, speeding up housing and energy approvals and ensuring AI adoption is not undermined by unnecessary regulation, among other suggestions. It comes as the commission prepares to release a series of reports detailing how Australia can get productivity moving again. "Australia should be a place where children born today can expect to live better and more prosperous lives than the generations who have come before them,'' Ms Wood said. "Productivity growth is essential to fulfilling that promise." But productivity growth has plummeted in recent years. How much Australia produces with the same amount of workers has grown at just under 0.4 per cent per year since 2015, compared with the 60-year average of 1.6 per cent. That's been caused in part by governments ignoring or minimising economic growth when making policy choices in recent years, according to a paper released by the commission. Policymakers have made it harder that it should be to start a business or build essential infrastructure such as housing or renewable energy because they have failed to weigh trade-offs effectively, been too risk-averse or "overly influenced by vocal stakeholder groups". Governments must balance competing objectives and make choices that improve Australians' overall wellbeing, even if those decisions might negatively affect other goals. "Bringing a growth mindset to policy decisions means elevating economic growth and its benefits,'' Ms Wood said. "That doesn't mean policymakers should ignore other objectives, but it does mean being clear-eyed about the trade-offs." The paper lays the groundwork for five forthcoming reports the commission is preparing to release before an economic roundtable convened by Treasurer Jim Chalmers. He said the report made clear the productivity problem had been around for decades and almost every comparable country had the same challenge. "The best way to strengthen our economy and make it more productive is to work through the issues in a methodical and considered way in collaboration with business, unions and the broader community," Dr Chalmers said. In its submission to the roundtable, a joint group of industry associations including the Business Council of Australia and the Australian Chamber of Commerce and Industry outlined four priority areas for reform. They include reforming research and development funding models to boost innovation; cutting the regulatory burden by 25 per cent by 2030; co-ordinating and unifying planning processes to speed up project approvals; and committing to comprehensive tax reform. "We need to cut unhelpful red tape, streamline planning, fix the tax system and improve incentives for investment," Business Council chief executive Bran Black said. "These policies can deliver benefits for economic activity across the whole country and importantly ensure future generations aren't worse off."
West Australian
4 hours ago
- West Australian
Rebecca Tomkinson: WA miners get productivity and the State deserves a seat at Chalmers roundtable
For every 308 people on this planet, just one is Australian. There simply aren't that many of us. Which makes it all the more remarkable that the 0.3 per cent of humanity lucky enough to call this country home operate the world's 13th biggest economy. Generating that kind of output, and the prosperity that flows from it, would not be possible without the minerals and energy that account for two thirds of all Australian exports. The Australian success story is grounded firmly in two things: access to international customers and cost-competitive products to sell them. And it's grounded firmly in WA. Which is why it is so important WA is strongly represented at Treasurer Jim Chalmers' economic reform roundtable. Of the 24 invitations issued to date, just one has been delivered this side of the Nullarbor. The balance seems questionable when you consider that without the commodities produced in WA, Australia's productivity woes would have forced a reckoning years ago. Instead, the resources sector has papered over the cracks, helping disguise the economic drag of an outdated and ill-equipped tax and regulatory system. The irony is that our miners and energy producers have only been able to perform this act of sorcery through a laser-like focus on maximising productivity in their own operations. Capital deepening — improving the equipment and technology available to workers — has been an essential driver of those gains. But it hasn't come cheap. Tens of billions of dollars have been invested in ports, rail, roads, machinery and automation to improve efficiency and drive down costs. Securing that level of investment doesn't happen by accident. It requires a sustained focus on delivering fundamentals that attract businesses with no shortage of global options for their capital. There is an important lesson here. The crux of the challenge facing the national budget is this: our tax base is narrowing as the proportion of working Australians shrinks, while demands on government spending for health, aged care, infrastructure and defence continue to rise. Shifting to a more equitable and sustainable tax system is a significant piece of the puzzle — and at this point it is worth highlighting the Prime Minister categorically ruled out any new resources taxes during a visit to WA ahead of the recent election. But just as important as tax reform is improving the productive output of every Australian worker. That doesn't mean forcing everyone to work around the clock. Far from it. It means equipping the workforce with the technology, training and tools they need to get more done in the same amount of time — and then sharing the spoils with them. It means identifying Australia's most productive sectors (that's easy, they're the ones paying the highest wages) and supporting them to thrive through a generational energy transition. And it means fostering the conditions needed for those sectors to unleash a new wave of productivity-enhancing investment. For the resources industry, those conditions are sadly heading in the wrong direction. Energy costs, historically an Australian advantage, have skyrocketed at the precise time access to cheap electrons has become perhaps the most important factor in global industrial competitiveness. One of the primary obstacles to building out the transmission lines and low-emission generation required to bring energy costs back down is a complex and protracted assessment system that leaves projects in limbo for years. Approvals can be both efficient and rigorous. Cutting unnecessary waiting times, which are hurting investment in both resources and energy, must be a national priority. Equally important is incentivising businesses, through grants and tax rebates, to explore and prove up the new processes and technologies — such as green metals and low-carbon fuels — that will be critical to decarbonisation. Damaging recent industrial relations reforms will harm rather than promote productivity. Carve-outs for the resources sector, in line with the original intent of the workplace changes, would restore some much-needed confidence. Artificial intelligence has the potential to supercharge output across the entire economy. It's vital that potential is given space to flourish and not suffocated by yet more rules and regulations. Many of these suggestions aren't new. But Australia doesn't need more productivity sermons. It needs action. If we want our economy to keep punching above its weight, we must unshackle the sectors that already do. That means looking west. The WA resource sector isn't just a passenger in the Australian economy. It's the engine room. Ensuring WA's voice is heard in economic reform discussions can't be a courtesy. It's a necessity. Rebecca Tomkinson is Chief Executive Officer of the Chamber of Minerals and Energy of WA
Perth Now
5 hours ago
- Perth Now
'Trade-offs' on cards to get productivity back on track
Australians are being warned to prepare for trade-offs in areas such as housing if the nation's productivity push is to be successful. Productivity Commission chair Danielle Wood is calling on Australia to adopt a "growth mindset" to prioritise economic outcomes and boost living standards. That means changing corporate taxes to promote investment, simplifying regulations, speeding up housing and energy approvals and ensuring AI adoption is not undermined by unnecessary regulation, among other suggestions. It comes as the commission prepares to release a series of reports detailing how Australia can get productivity moving again. "Australia should be a place where children born today can expect to live better and more prosperous lives than the generations who have come before them,'' Ms Wood said. "Productivity growth is essential to fulfilling that promise." But productivity growth has plummeted in recent years. How much Australia produces with the same amount of workers has grown at just under 0.4 per cent per year since 2015, compared with the 60-year average of 1.6 per cent. That's been caused in part by governments ignoring or minimising economic growth when making policy choices in recent years, according to a paper released by the commission. Policymakers have made it harder that it should be to start a business or build essential infrastructure such as housing or renewable energy because they have failed to weigh trade-offs effectively, been too risk-averse or "overly influenced by vocal stakeholder groups". Governments must balance competing objectives and make choices that improve Australians' overall wellbeing, even if those decisions might negatively affect other goals. "Bringing a growth mindset to policy decisions means elevating economic growth and its benefits,'' Ms Wood said. "That doesn't mean policymakers should ignore other objectives, but it does mean being clear-eyed about the trade-offs." The paper lays the groundwork for five forthcoming reports the commission is preparing to release before an economic roundtable convened by Treasurer Jim Chalmers. He said the report made clear the productivity problem had been around for decades and almost every comparable country had the same challenge. "The best way to strengthen our economy and make it more productive is to work through the issues in a methodical and considered way in collaboration with business, unions and the broader community," Dr Chalmers said. In its submission to the roundtable, a joint group of industry associations including the Business Council of Australia and the Australian Chamber of Commerce and Industry outlined four priority areas for reform. They include reforming research and development funding models to boost innovation; cutting the regulatory burden by 25 per cent by 2030; co-ordinating and unifying planning processes to speed up project approvals; and committing to comprehensive tax reform. "We need to cut unhelpful red tape, streamline planning, fix the tax system and improve incentives for investment," Business Council chief executive Bran Black said. "These policies can deliver benefits for economic activity across the whole country and importantly ensure future generations aren't worse off."
