“The focus on current inflation inherent in Australia’s performance in the latest OECD Economic Outlook should not disguise the more fundamental problem of weak productivity growth,” Innes Willox, Chief Executive of the national employer association Ai Group said today.
“The OECD Economic Outlook points to the likelihood of the further slowing of activity both in Australia and the global economy over the next 18 months. In large part this is linked to the deliberate policy measures in place aimed at returning inflation to sustainable levels. For Australia there is an additional concern linked to the expected fall in growth in China which is our largest trading partner.
“While the collapse of productivity growth is not unique to Australia, there are clear steps that Australia’s governments can and should take to boost our productivity growth and move us further up the OECD performance ladder. These steps include encouraging and facilitating investment and innovation; investing in education and training; ensuring our regulatory settings enable flexible adaptation and adoption of new approaches to economic activity; and developing a coherent, long-term industry policy.
“We need to apply a sense of urgency to address these challenges.
“Similarly, there are clear policies that should be avoided. The Federal Government’s workplace relations agenda is full of such bad policies. This agenda is set to radically reduce workplace flexibility and impose debilitating additional compliance costs on business at a time when we should be doing all we can to improve the environment for business,” Mr Willox said.
