Australia's productivity problem is screwing you over

🧠 The big idea:

Australia’s productivity growth is on the downward spiral — and it could be quietly dragging your quality of life.

• Treasurer Jim Chalmers says “jump-starting productivity” is now a key focus of economic policy.
  

• But before you roll your eyes at another dry economy stat: this one actually hits close to home — from your wages to your rent to how much that Friday night beer costs.
  

⚙️ What we mean by productivity

This isn’t about grinding harder or glorifying hustle culture. Productivity, in this context, means getting more done in the same amount of time.

• Think: A café installs a faster ordering system and suddenly serves more customers per hour. That’s productivity in action.

📉 By the numbers:

Australia’s labour productivity grew just 0.9 percent in the 2022–23 financial year, per the Productivity Commission. That’s bad — and not just because it makes economists nervous.

• Productivity growth is what makes higher wages possible without inflation. When it stalls, so do your pay rises — while living costs keep climbing.

📊 See the ABS data

🦠 So, what happened?

COVID scrambled the data — but the slowdown started before the pandemic.

• Danielle Wood, chair of the Productivity Commission, says this is a broader trend affecting other wealthy countries too.

• The Reserve bank has laid some of the blame on the lack of investment in capital. 

🗣️“Overall investment has not kept pace with the strong growth in employment recently.”

🧑‍💼 What the government’s doing

Jim Chalmers has tasked the Productivity Commission with figuring out how to turn things around.

They’re running five major inquiries, and while there’s no single fix, some ideas are already being floated.

⚡ Fast-tracking clean energy

One proposal? Speed up approvals for new energy infrastructure.

• This would cut red tape and help reach net zero faster.
  

• Bonus: more renewables are expected to lower energy bills — a double win for productivity and your power bill.

🤖 The AI factor

Another focus area is artificial intelligence.

• The Commission’s exploring how to boost productivity with AI while managing the risks — like job displacement or algorithmic bias.

🏢 The not-so-sexy part: corporate tax

The least thrilling — but potentially most impactful — reform proposal is rethinking how companies are taxed.

• Since 2009, non-mining companies have invested about 3% less, meaning fewer tools, tech upgrades and productivity-boosting gear for workers.
  

• The Commission argues that a simpler, more efficient tax system could incentivise businesses to reinvest.
  

📚 This isn’t a new idea — it’s been floated in:

• The Henry Tax Review (2010)
  

• Treasury reports (2012, 2015)
  

• IMF (2018)
  

• OECD (2021)
  

It’s not about slashing taxes for billionaires — it’s about smarter settings that get money flowing back into the economy.

⏳ What’s next

The government is still in the early consultation phase, with recommendations expected later this year.

💡 The bottom line

If the word productivity makes your brain crash like Windows XP, you’re not alone.

But don’t ignore it — because whether or not you see it, this is the stuff that shapes everything from your wage to your weekend plans.