The political class yammers about productivity, sprinkling the term like magic dust over dodgy policy and wasteful spending.
Increasing productivity growth comes down to the enterprise, companies and workers changing the way they do things, taking up fresh ideas and technologies to create more from precious capital and labour.
Governments can help or hinder this dynamic process, because of their power to spend, tax and regulate across a huge swath of the economy.
As the five-yearly review of our performance from the Productivity Commission shows, we’re falling behind, because governments have been asleep at the control panel, failing to show policy leadership, averse to conflict, and putting off the hard calls that experts have been urging them to make for decades.
Friday’s nine-volume blockbuster will challenge the Albanese government to be brave, spend political capital, especially in the vital areas of government services, which are eating up a greater share of the budget as Australia ages and keeps adding to its buffet plate.
It is 1000-plus pages of ammunition for the policy crowd to push politicians to aim higher.
We need growing companies shooting for the productivity frontier, and more resources flowing their way, not backfilling the lagging services sector with more taxpayer money.
If we are to get a step-change, nay simply maintain our lifestyle, the country needs more creative destruction, fewer zombie firms, high-skilled workers and a plan to manage the transitions for people who are on the wrong side of changes that benefit the many.
He’s not popular this week, but we need the energy of the maddie from Bankstown, brawling on the big stage with friends and foes for change and explaining to the public why there is no alternative.
OK, there is an alternative: a more indebted, dumbed-down, slower, older and poorer nation.
But as Jim Chalmers has said, the appetite for reform is not there, other than in spending more money on childcare, skills, data, and industry subsidies – although his list is a lot longer.
The Treasurer refers to the commission as an “ideological parking lot” so he’ll be taking his reform advice from others.
That’s a pity, because Australia can’t afford the backsliding and second-best policy for another era and, frankly, with a chronic budget deficit, it can’t afford the coming bill shock.
Unless we optimise our tax system, put a price on carbon emissions, carefully ration our migration program, encourage market competition, innovation and investment, improve workplace flexibility, properly price infrastructure and fashion a more dynamic economy, we’ll stay on the low-income road.
But first things first: a revitalised care sector. That may not necessarily trim costs in the burgeoning areas of health, aged care and disability services, but we’ll get more from our money and superior services.
The commission has provided a road map for revival. It may be purist, pointy-headed, ambitious and even naive in parts, but if adopted in spirit we can get closer to a destination that has all the five-star amenities Australians see as our inheritance.
More of the same from our alleged national leaders, and that goes to the provincial mendicants off-Broadway, means blowing those fabulous endowments, falling behind the pack, and sinking into shabby isolation.
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