Anthony Albanese and Jim Chalmers are facing criticism over Australia’s productivity slump, with the article saying they’re so desperate to blame the Coalition for the country’s poor economic performance that they now call the nation’s damaging productivity crisis a two-decade problem. That’s the shape of the thing: a government that promised fixes after last year’s election victory now presides over record levels of debt, spending and tax, while workers are left to live with the worst decade for productivity since records began in the 1960s.
Who Pays for the Mess
The people at the bottom always get the bill. After almost 4½ years in office, the Prime Minister and Treasurer are on track to oversee record levels of debt, spending and tax, and the article says their commitment to make fixing productivity their economic priority is looking as bad as Labor’s broken 2022 election promise to slash household power bills by $275. The promise was there. The relief wasn’t.
On the one-year anniversary of Chalmers’ three-day economic reform roundtable talkfest, convened to help turbocharge grim productivity levels, national accounts data this month showed productivity growth remains dire. That’s the bureaucratic ritual of reform in miniature: a roundtable, a headline, a promise, then the same grinding reality for everyone who doesn’t sit at the top table.
What They Call “Fixing”
Chalmers tried to frame the problem as bigger than his own government. He said: “This is a two-decade problem that will take more than 12 months or even more than a couple of years to turn around. Right around the world, with the possible exception of the US, countries have got a productivity challenge a bit like ours, and for us it’s been there for decades.” He also said Labor was doing more than previous Coalition governments because he had a “big broad productivity package in the budget, which will cut compliance costs by more than $10bn a year”.
He added: “This is all about trying to shift the productivity challenge, which has been a huge problem in our economy for some decades now and will take time to turn around.” The language is careful. The damage is not.
The Business Council of Australia, representing the country’s largest employers and biggest companies, has also sounded the alarm, though from the side of capital rather than the side of anyone who has to survive the economy it shapes. BCA chief executive Bran Black said while the budget package was necessary, “the weight of previous workplace relations changes and regulation are taking their toll”. He also said: “And the budget capital gains, negative gearing and discretionary trust tax changes take us even further backwards, adding complexity and weakening investment incentives.”
Black said: “For the past six years Australia has gone backwards on productivity. If we stay on the current path, we will record the worst result since records began in 1960. Australia has a productivity crisis and this data should be a wake-up call for the government. Unless we turn it around, Australians will continue paying the price with weaker real wages, greater pressure on the cost of living and lower living standards.”
The Reform Trap, Again
Asked by The Australian on Sunday whether fixing productivity remained his top economic priority, Albanese pointed to a list of already announced Labor policies and said he hoped artificial intelligence would help lift productivity. He also said: “Productivity has been weak for the last couple of decades.” That’s the familiar loop: announce policy, invoke technology, admit the problem has been festering for years, and leave the structure intact.
The article says Chalmers will release his second Intergenerational Report on September 21. It also says productivity drives living standards, real incomes and a stronger economy, and that it can help to curb inflation, which Chalmers has struggled to contain since Labor’s return to power in 2022. For everyone below the ministerial press conference, the numbers keep moving in the wrong direction while the people in charge keep explaining why it’ll take longer.
The crisis isn’t just a statistic. It’s the cost of decisions made above everyone else’s heads, then sold back as necessity, patience and reform.