Daniel Mulino (Fraser, Australian Labor Party) Share this | Hansard source

Nobel Prize winner Paul Krugman once said:

Productivity isn't everything, but, in the long run, it is almost everything.

This does reflect the fact that we need to focus on productivity growth if we're going to lift living standards in the long run and if we're going to put ourselves in position to deal with some of the first-order challenges that our society faces. To that extent, I agree with some of the underlying sentiments of the motion that has been put before us today.

Productivity is absolutely key to our economic agenda and more broadly. As the previous speaker, the member for Curtin, alluded to, productivity is important in many ways. Firstly, multifactor productivity growth is critical to ensure that we get more out of an existing set of inputs. It's also obviously critical to innovation. It's important not just that we get more outputs out of a given set of inputs but that we actually create new outputs and new services. That's why it's so important to look at the context in which this government assumed office after the last election. We came to office after a decade, leading up to 2020, in which productivity growth had been the lowest it had been for over 60 years—1.1 per cent compared to 1.8 per cent over 60 years leading up to 2019 and 2020. Indeed, the trajectory of productivity growth was so bad that productivity growth had fallen for five consecutive years in the lead up to the pandemic.

Right from the beginning, this government has seen turning around productivity growth as absolute central. But, as almost all macroeconomists would agree, turning around productivity growth takes time. There's typically a lagged effect between investing in the economy, changing regulation and seeing productivity growth come through in the statistics. We will see that again this time, but this government has invested in a range of important policy reforms that will pay off in important ways. Indeed, to make reference to the PC reform agenda that the previous speaker alluded to, many of the government's priority areas for reform overlap with those areas identified by the Productivity Commission. So I want to talk on the five pillars that this government has used as a frame for its productivity agenda. I won't have time to run through all of the various components, of course, but these will point to the fact this government is turning productivity growth around and that it is doing so on a very broad basis.

The first of those pillars is that we need a more dynamic, competitive and resilient economy, and if I might say—somewhat self-indulgently—the committee I chair, the House economics committee, looked at this in great detail. Some of the recommendations that came out of our competition and economic dynamism review are now coming to fruition—reforms of mergers laws, reforms in relation to non-compete clauses. There are others in this chamber who signed up to some of those recommendations. I think those recommendations will have a real impact to strengthen and streamline approval processes and remove 500 nuisance tariffs. There are significant number of reforms already underway being implemented in the parliament at this very time, which will have a significant effect on productivity.

There was a range of reforms right from day 1. Indeed, some of the very first laws passed by the parliament in this term related to the skilled and adaptable workforce, which is the second of the five pillars: university reforms, fee-free TAFE, and a record investment in skills. Many of these reforms are about fairness, but they are also about productivity. There are also number of reforms in relation to the third of the five pillars: harnessing data and the digital economy, expanding the NBN into digital areas, and a range of digital apprenticeships. That's something that I am seeing in my own electorate. There's investing in the net zero transformation, which is something many in this chamber at this point in time would agree with. That is critical for protecting our environment and society but will also have productivity benefits. Then there's the ageing population and care economy, which is a huge and growing part of our economy. We have put in place a number of reforms through the NDIS and its sustainability through more aged care services at home.

This government is turning productivity around. It does take some time for it to come through in the official statistics, but it will be reflected in the statistics, because we have reforms right across the economy and our society. This will benefit us in terms of both our quality of life and our economic statistics.

See this speech in context