A strong cup of coffee could solve our productivity problem

When it comes to changes that have transformed our lives and made us richer, what comes to mind? The advent of electricity, perhaps? Refrigeration? Penicillin? Public education?

How about lattes?

According to one member of the Australian public, all that’s needed to transform our economy is “high-quality coffee on every floor of an office building”.

Treasurer Jim Chalmers.Credit: Alex Ellinghausen

Another reckons that, given we spend 90 per cent of our lives indoors, the government should introduce ventilation standards that would “turbocharge our productivity by reducing the transmission of illnesses and other airborne pathogens, and improving our cognition”.

Who knew a lack of coffee and fresh air was holding the Australian economy back?

These ideas, and around 450 others, are all part of the Productivity Commission’s latest initiative, in which they have asked the public for suggestions on how to improve the overall operation of the economy and, more specifically, “practical” ways to make the country more productive. In that context, ordering a double espresso and seeking out sunshine makes a lot of sense.

There’s been a bit of ballyhooing of late about Australia’s falling productivity rates, as if it’s a problem that has just occurred. But the decline has been a big problem globally for well over a decade – ever since the global financial crisis hit.

It’s likely that some of the recently reported drop is due to measurement problems that arise when an economy is suddenly dominated by services. That’s because it’s far easier to measure productivity when looking at how many widgets a business produces and the quality of them, for example, than it is to measure at the local physiotherapist.

There’s also the tiny problem that after deliberately short-changing older Australians, veterans and those with disabilities for such a long time, we’ve decided to throw money and workers at rectifying the situation.

Whatever the reason, Australia and just about every other developed nation on the planet has struggled with poor productivity for a long time, as the Productivity Commission’s previous reports prove.

Their 2017 tome, which recommended a carbon tax, road user charges, competition in the pharmacy sector and different tax arrangements for the alcohol sector among other things, risked offending just about every vested interest across the country and has been collecting dust since the day after its release. Its 2023 release included similar proposals and, as such, was also quickly shelved.

Perhaps that’s why the Productivity Commission’s chair, Danielle Wood, chose to do something different and poll the public.

As you’d expect, the ideas on how to improve Australia’s economic performance cover an extraordinary range of insights.

One person suggested more “Japanese-style” public toilets, reasoning that introducing the ultra-stylish high-end public loos, which enjoy minor celebrity status across Japan, would “improve the quality of life appreciably”.

Another channelled the prison hulks of 18th century London, suggesting disused ocean liners could be repurposed to provide housing to the homeless, while someone else believes all the country really needs to get more done is introducing a maximum level of illumination in offices and meeting rooms.

Wild ideas aside, the commission has been offered some ideas that could feasibly force policymakers (and economists) to think again.

Noting Australia’s poor record on research and development, one person suggested creating a decade-long funded program similar to the Medical Research Future Fund (but for basic nonmedical research), with free research made publicly available so that it could be accessed by budding entrepreneurs or inventors. This suggestion aligned with many other submissions that have also noted the importance of information sharing, and finding ways to increase its accessibility across the community.

Others aired frustrations at the “same rules, different state” red tape that surrounds occupational licences for people wanting to work across the border, suggesting that the state and territory model for occupational registrations and licences be nationalised and overseen by the Commonwealth.

Another person proposed the installation of floating solar panels on public and private lakes or dams, with the aim of generating cheap power while also reducing water evaporation – an idea that might seem crazy at first, but that is already being used on a small scale overseas.

More than 450 suggestions have already been provided by the public, with the commission now facing the task of weeding out the weirder ones and assessing those that may hold water (including some that the commission itself will develop). The result will be a draft report mid-year and the final report should be done.

Some of the ideas are downright loopy. Others simply sound as if they were submitted by a poor soul trapped working in an industrial zone devoid of nearby cafes and only a jumbo tin of International Roast for company.

But considering experts have spent the best part of a decade trying to get to the bottom of what will improve our economy, casting the net so wide might not be so bad an idea: there may be a nugget or two worth pursuing, and even some common sense applied.

Shane Wright is a senior economics correspondent for The Age and The Sydney Morning Herald.

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