Fed: Productivity must be raised for long-term well-being:report

AAP General News (Australia)
04-28-2010
Fed: Productivity must be raised for long-term well-being:report

CANBERRA, April 28 AAP - The federal government must take an active roll in raising
productivity for the nation's long-term wellbeing, a new government committee report has
found.

The House of Representatives Economics Committee's report on productivity growth, released
on Wednesday, makes a number of recommendations and calls for a national productivity
forum in the next parliament.

Committee Chair Craig Thomson said robust productivity growth would be a key determinant
of Australia's long-term economic prosperity.

"With the challenges posed by a larger and ageing population, climate change and the
current constrained fiscal environment, productivity growth is essential to generate the
living standards and community wellbeing expected by Australians," he said, releasing
the report.

The report noted that Australia experienced a productivity growth surge in the mid-1990s,
averaging 2.3 per cent "multi-factor" productivity growth per annum.

Since then, productivity growth has declined, with multi-factor productivity declining
0.4 per cent from 2003/04 to the present day.

"The high per capita incomes Australians currently enjoy can be attributed to favourable
commodity prices and thus strong terms of trade," the report said.

"However, to secure long-term economic growth, Australia will need to focus on productivity
growth, through improvements in the technical efficiency of firms and their utilisation
of technological advances."

A national forum would bring together governments, business, unions and non-government
organisations.

It recommends that the government introduce a national aggregate productivity growth
target for the medium term to 2030.

The Council of Australian Governments (COAG) should adopt a specific national productivity
agenda, while the Productivity Commission should undertake modelling on the effect of
human capital investment on Australian productivity growth.

The Australian Bureau of Statistics should investigate alternative ways of measuring
multi-factor productivity in the services sector, while a cost-benefit analysis should
be mandatory for all policies aimed at increasing aggregate productivity growth.

Any national productivity agenda should include public sector service provision, it said.

AAP cb/sb/tr

KEYWORD: PRODUCTIVITY

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