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‘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."

www.pc.gov.au

 

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JCPAA publishes report of inquiry into administration of Commonwealth regulations

THE Joint Committee of Public Accounts and Audit has today published the report of its inquiry into the administration of Commonwealth regulations.

The inquiry was informed by audits into regulatory responsibilities of five entities: Department of Health and Aged Care; Aged Care Quality and Safety Commission; Department of Home Affairs; Department of Industry, Science and Resources; and the Australian Taxation Office.

These audits dealt with: management of non-compliance with the Therapeutic Goods Act 1989 for unapproved therapeutic goods; early implementation of aged care reforms; regulation of migration agents; trade measurement; and the management and oversight of fraud control arrangements for the goods and services tax.

Chair of the committee, Linda Burney MP said, "Government regulation has a profound effect on the daily lives of all Australians. When it is administered effectively, regulation protects the public interest, ensures the efficient delivery of services, promotes trust, and improves community safety and wellbeing.

'The committee found that overall the agencies were meeting their requirements but there are areas where improvements could be made. We noted gaps and inconsistencies, as well as partial regulation and, in some cases, failure to regulate effectively."

During the inquiry, the committee also examined the adequacy of the current principles-based policy guidance from the Department of Finance and found regulators required more practical advice on how to go about their regulatory responsibilities.

"To ensure improvements, we made nine recommendations. These deal with specific entity shortcomings discovered during the inquiry, the need for greater transparency and accountability, and the nature of policy advice," Ms Burney said.

The report can be downloaded from the Committee website.

 

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Public sector contract management is mixed and requires closer attention

THE Joint Committee of Public Accounts and Audit has released its report on the contract management frameworks operated by Commonwealth entities, which examined whether they are fit for purpose to ensure project delivery and value for money.

The Australian National Audit Office audits examined by the committee revealed areas of good practice in this regard, underpinned by effective governance. They also exposed deficiencies, including insufficient record-keeping and poor documentation of value for money in contract variations.

The inquiry also highlighted the need for entities to maintain an appropriate arm’s length relationship with suppliers and to establish and monitor effective and measurable key performance indicators (KPIs).

Committee Chair, Linda Burney MP, said, "It became clear from this inquiry that value for money cannot be achieved for the taxpayer if a well-managed procurement process is not followed up with effective contract management."

The following requirements are among the committee’s six recommendations:

  1. That the Department of Finance’s annual self-assessment survey for contract management capability becomes mandatory, contains clearer indicators of this capability and that corrective action is taken when shortfalls are revealed.
  2. That the Department of Finance consults with relevant agencies to ensure that guidance and training address weaknesses in contract management, as outlined by the Committee.
  3. That updates be provided on the management of the My Health Record and the Adult Migrant English Program contracts, and on their upcoming tendering processes.

"The Department of Finance has a pivotal role to play in addressing shortfalls in contract management across the Commonwealth. The Department needs to be more than just a policy steward that provides advice and resources," Ms Burney said.

The report can be downloaded from the inquiry website.

 

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National Youth Parliament 2026 – House of Reps seeks a supplier

THE Department of the House of Representatives is seeking a suitably qualified and experienced service provider to develop and deliver a National Youth Parliament to be held in Canberra in 2026.

Participants in the National Youth Parliament will have the unique opportunity to learn about aspects of being a Member of Parliament, including the process by which bills are drafted, considered, and pass Parliament to become law.

The provider will manage the event and deliver a program for 150 senior students, one per federal electorate, which complies with all child safety requirements and will achieve best practice educational outcomes.

An open tender is available via AusTender for interested suppliers.

 

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Committee reports on the operation of Australia's Magnitsky-style thematic sanctions

THE Human Rights Subcommittee of the Joint Standing Committee on Foreign Affairs, Defence and Trade (JSCFADT) has published its report into the operation of amendments made by the Autonomous Sanctions Amendment (Magnitsky-style and Other Thematic Sanctions) Act 2021.

Chair of the Subcommittee, Maria Vamvakinou MP said, "Sanctions can and do play a vital role in tackling human rights abuses, curbing serious corruption, and addressing other issues of international concern.

"Recent legislative developments have strengthened Australia’s sanctions framework. But as this review makes clear, there are opportunities for us to have an even greater global impact through our use of autonomous sanctions."

This report makes five recommendations aimed at strengthening Australia’s autonomous sanctions framework, including:

  • sanctions decisions be accompanied by detailed reasoning;
  • reasons for sanctions decisions be included in the Consolidated List of sanctioned individuals and entities;
  • the Parliament receive an annual report on sanctions decisions taken during the previous year;
  • the regulations for imposing autonomous sanctions be updated to include listing criteria for all thematic areas;
  • a humanitarian exemption be legislated to ensure humanitarian assistance is not adversely affected by the imposition of sanctions.

The report is now available on the JSCFADT website.

 

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