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How to resolve AdBlock issue? ‘No flash in the pan’: Productivity problem a long-term challenge
AUSTRALIA'S PRODUCTIVITY continued to stagnate in the December quarter, suggesting that the country's productivity problem may be part of a long-term trend.
The Productivity Commission's latest quarterly productivity bulletin shows labour productivity declined by 0.1% in the December quarter and by 1.2% over the year.
"The data makes it clear that our productivity problem is not a flash in the pan – this is a long-term, structural challenge that requires dedicated attention from government and industry," said PC Deputy Chair Alex Robson.
In a new article, the PC takes a closer look at the drivers of the COVID 'productivity bubble'. The PC will expand further upon this work in a detailed research paper to be released in the future.
‘The COVID pandemic was a massive global economic shock," Dr Robson said. "The pandemic and the policy response to it drove a sharp rise – and then a crash – in measured productivity. Now that the dust has settled, we're back to the stagnant productivity we saw in the period between 2015 to 2019 leading up to the pandemic.
"Ultimately the COVID productivity bubble was just that: a bubble. We saw a sharp rise in productivity driven by the lockdowns which was then wiped out as lockdowns ended and hours worked reached record highs," he said.
"There are lessons to be learned from these fluctuations, but they aren't likely to have a meaningful long-term effect on productivity.
"The real issue is that Australia's labour productivity has not significantly improved in over 10 years. With global policy uncertainty again on the rise, addressing productivity directly via targeted reforms will be the best way to sustainably boost Australians' living standards," Dr Robson said.
"To that end, the PC is undertaking a program of five inquiries, each focusing on a different pillar related to productivity. We will identify the highest priority reforms under each of the five pillars which will improve Australia’s long-run productivity growth."
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