One of the most regrettable aspects of public life in Australia is the very short attention span of politicians and the public.
It was only in August last year that some of the best and brightest economists in Australia were meeting in Canberra to discuss ways of improving the country's lacklustre productivity growth.
Now the major results of those discussions have been released at a time when many people are on holidays, running the risk that some vital steps in improving Australia's wealth ends up being kicked either to the side of the road or further along it.
This is literally a multi-billion dollar free kick for the country, so ignoring it would be a terrible idea.
47 Growth Recommendations
The final reports of the Productivity Commission's productivity inquiries included 47 recommendations to support productivity growth across five key areas of the economy.
They arrive as Australia remains stuck with productivity that has stalled since 2016, something that must change if future generations are to live better and more prosperous lives.
As Productivity Commission chair Danielle Wood put it: “Our final suite of recommendations, if fully implemented, would add billions to the economy, benefiting workers, households and businesses today and into the future.
"No single policy reform can bring productivity growth back to its long-term average - governments will have to make a lot of pro-productivity decisions that support and reinforce each other."
The five pillars the Commission worked on were creating a more dynamic and resilient economy; building a skilled and adaptable workforce; harnessing data and digital technologies; delivering quality care more efficiently; and investing in cheaper, cleaner energy and the net zero transformation.
To do that the Commission looked at the current tax system and regulatory burdens and suggested changes to create a more dynamic and resilient economy.
Lower Taxes for Small Business
The most radical part of that was moving to a hybrid corporate tax system, combining a lower company income tax of 20% for small and medium businesses earning up to $1 billion, and a tax rate of 28% for larger firms, with a net cashflow tax of 5% for all companies.
Commission modelling suggested this change alone would increase GDP by just over $13 billion (0.7%).
These substantial benefits came with the benefit of being revenue neutral, although other options that reduced Government revenue were also modelled.
The report also recommends the government make regulatory reform a key priority with an ambitious whole of government agenda, including major reforms targeting a $10 billion reduction in the regulatory burden.
Helping Workers to Upskill
To build a skilled and adaptable workforce, the Commission said the government should help build solid foundational skills, smooth pathways to upskilling and make it easier for workers to enter new occupations.
That includes measures like improving access to high-quality teaching resources such as instructional materials and professional development material, which would support teachers and ensure more students receive high-quality teaching.
It also recommends ways to make it easier for students and workers to access learning and build their skills over time, replacing excessive occupational entry regulations with more efficient alternatives.
Using AI to Boost Productivity
The report on harnessing data and digital technologies recommends an approach to regulating AI based on finding and fixing gaps in current regulations to make the most of what is potentially a $116 billion productivity opportunity over the next decade.
It also recommends reforms that would help people access and share data that relates to them.
On delivering quality care, the PC recommended greater investment in prevention and early intervention.
It said that investing $1.5 billion over the first five years of a proposed National Prevention Investment Framework could return savings to government of around $2.7 billion 10 years after the initial investment.
"Governments can lift productivity by breaking through the siloed approach to decision-making in the care economy and improving the quality and efficiency of the services it provides," Ms Wood said.
How to Save $8 Billion
Lastly, recommendations for investing in cheaper, cleaner energy and the net zero transformation included introducing a national emissions-reduction policy for the electricity sector.
It said taking a technology and jurisdiction-neutral approach to the location of new generation and storage infrastructure in the National Electricity Market could save around $8 billion over the next 15 years, without compromising the achievement of state renewable energy targets.
"Achieving net zero at least cost and adapting to the effects of climate change are central to our productivity challenge," Ms Wood said.
