CONRAD LIVERIS: There's no superhero to fix Australia's productivity. It's up to us

West Australian

4 hours ago

Australia's productivity growth is limping along at 0.7 per cent. We're moving slower than traffic on the freeway in peak hour, with about as much co-ordination.
It's the kind of dysfunction you'd expect from an episode of Utopia: big ambitions, lots of PowerPoints, and somehow, still no action.
Treasurer Jim Chalmers' recent speech at the National Press Club offered some good ideas. But productivity isn't a spreadsheet problem. It's a systems problem. And more than that, it's a people problem.
As an economist, I know that we are not short on people. We're just not letting them do the work they're capable of doing.
If we want a more productive Australia, we need to stop managing for scarcity and start building for abundance. More people working. More care being delivered. More capability in government. More houses, faster. And definitely more managers who know what they are doing.
To assist the Treasurer, I have a few ideas.
We have to stop wasting our potential. We keep telling ourselves we have a 'tight labour market'. But that's like saying your petrol is full because it is at 75 per cent.
Right now, the under-utilisation rate (people who are unemployed or underemployed) is hovering around 10 per cent. That includes parents stuck without child care, older workers who want to keep working and people with disabilities facing unfair hurdles. This amounts to tens of thousands of people in WA alone who want to work — and could — if the system wasn't working against them.
Next, we need to build productivity in the care economy. Aged care, child care, disability support aren't just services, they are infrastructure. They enable everyone else to work. But we treat them like a cost centre instead of the productivity engine they are.
Care workers remain woefully underpaid, under-supported, and often working with retro tech and paper rosters. Boosting productivity in care industries by just 10 per cent could save $9 billion a year, according to the Productivity Commission. That's a lot of money that can be invested in improving efficiency and creating jobs.
ASIC chair Joe Longo has been a leading voice on deregulation to improve productivity. He wants to go deep and look at the specific pain points, not just wishy-washy frameworks.
Longo is right: the problem isn't just too much regulation but too much of the wrong kind. Aged care providers stuck in admin quicksand, small business managers buried in procurement rules, and skilled workers blocked by paperwork.
Resolving everyday efficiencies are where productivity gains can be made.
Then there's management capability, or the lack thereof. A lot of Australian workplaces are badly managed. Like, 30 open tabs and no idea who owns the project badly managed.
Our national management capability scores are below the OECD average. The Productivity Commission calls it a 'capability gap'. I call it the reason your local café is taking 30 minutes to get you the eggs benedict.
The truth is that almost nobody in Australia is taught how to manage. Everyone struggles at times, but there's a vacuum of support. The go-to solution is often to outsource to a consultant to fix the immediate issue, rather than build the long-term skills managers need to, you know, manage.
Then there's housing. A recent CEDA report showed that dwellings built per construction worker have halved since the 1970s. Even with better tools and technology, we're building less per worker. The problem isn't a lack of effort, but red tape.
The CEDA report also found that if the construction industry matched manufacturing, they would produce $54 billion more in revenue without any additional labour. That's equivalent to 150,000 extra construction workers. We can only dream.
Many of us know the quagmire of council delays, inconsistent zoning and design-by-committee. Planning has become so slow it makes the NBN roll-out look nimble.
Let's reward councils that approve housing faster. Offer incentives for early completion of affordable housing. And stop making developers submit 200-page traffic studies for a five-unit block.
Finally, all levels of government must look at themselves. This is a team effort.
To see real productivity growth, the Federal Government has to work with State and local governments. Because it's not just what's said in Canberra that matters, it's what gets delivered closer to the ground.
Nobody wants government that is bloated, but ours is not the most efficient it can be. This is a handbrake on productivity.
Chalmers himself cites a new book by journalists Ezra Klein and Derek Thompson, Abundance, as a key influence. But abundance doesn't start or end in Parliament House. It starts on the ground: in faster council approvals, mobile workforces, child care places that exist, and digital systems that aren't allergic to logic.
We're not short on ideas. We're short on execution. That's why Chalmers' reform round table in August matters. But let's make sure it isn't another polite Canberra talkfest where everyone agrees to be ambitious later.
Treasurer, what we need is simplicity. Australia needs simplicity around how we work.
We've been waiting for productivity to be saved like it's the final act of an Avengers movie. But there's no superhero coming. It's up to us to build, fix, and deliver.
Conrad Liveris is an economist and non-profit executive.