Productivity Commission chair warns 'growth' has fallen off government priority lists
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The news: In a high-profile speech on Monday, Productivity Commission chair Danielle Wood will lay the blame of sluggish productivity on decades of government inaction, while pushing for light-touch AI and technology regulation and a suite of changes across care, company tax and skills.
And she will put the onus on the Albanese government, saying it will be "judged" on the outcomes it achieves for productivity after putting it front and centre of the agenda.
In a National Press Club address to be delivered on Monday afternoon ahead of the three-day Economic Reform Roundtable, Wood will encourage governments to regulate with growth in mind, to understand that “real growth comes from new ideas and technology” and to consider a raft of pro-productivity decisions to shift the dial.
While sluggish productivity growth has become a global phenomenon among similar countries, Wood notes there is "another common phenomenon across many richer nations: less policy emphasis on growth and a declining reform appetite".
The context: Wood’s speech is carefully timed ahead of the government’s roundtable and will set the tone for the three days ahead.
An early copy of the speech provided to media indicates she will use the opportunity to reiterate the many recommendations the Commission has made to the government across five interim reports, including lowering the company tax rate for all but the biggest companies to 20% and introducing a 5% net cashflow tax. Some of these have proven controversial.
Wood also specifically points out her concerns that Australians born in the 1990s “were the first generation not to earn more than people born a decade before” and this generation “will bear more of the cost of addressing climate change – both the impacts of wilder weather, and the policy response – because Australian policy makers have for so long avoided the lowest cost policy choices”.
Wood will deliver a presentation to the Roundtable on the second day.
What they said: "I’m thrilled by the new appetite for economic reform that the roundtable has created over the past two months. And by the Treasurer’s elevation of productivity as ‘the primary focus’ of the government," Wood will say at the Press Club on Monday.
"Ultimately the government will be judged on its actions and the outcomes they achieve," she will say.
"I think it is fair to say that policy makers have not pulled as hard or as often on these levers as some of us would have liked over the past two decades. The reasons commonly advanced include a decline in bipartisanship, the influence of vested interests and the 24/7 media cycle. These factors have certainly played a role.
"And to be fair to today’s leaders, the reforms required now are more complex to design and implement than some of the major reforms delivered in the 1980s and 1990s.
"But I think there is another reason as well. Growth has simply fallen down the list of priorities in policy making. This manifests not just in less economic reform but in decisions by governments – federal, state and local – to pay less attention to growth trade-offs in pursuing other policy goals."
The source: National Press Club speech copy
