Latest news with #Rumbens
West Australian
26-05-2025
- Business
- West Australian
AI in sights to build up nation's sliding productivity
Beneath its robust facade, deep-seated cracks threaten the integrity of Australia's jobs market. Wages are growing in real terms, unemployment is historically low and falling interest rates bode well for further jobs growth. But employment growth has been lumpy, with investment in government-reliant industries such as health and childcare masking weakness in the market sector, says Deloitte Access Economics partner David Rumbens. As growth in public spending and immigration trend downwards, the pace of job creation will slow from 2.7 per cent to 2.3 per cent in 2024/25 and 1.5 per cent the year after, Deloitte's latest quarterly Employment Forecasts report found. The good news is wages growth remains strong and Australia's economy looks to be on the way up, despite uncertainty caused by Donald Trump's trade war. "All sectors are expected to benefit from the gradual economic upturn, with consumer-facing industries poised for growth due to the combined effects of tax cuts, government rebates and anticipated cuts to interest rates," said Mr Rumbens, the report's lead author. But Australia's abysmal productivity performance threatens to limit workers' dividends. "The sustainable way to maintain healthy wage growth is through productivity gains - something the treasurer has recently nominated as being central to the Labor government's second term," Mr Rumbens said. Since March 2022, labour productivity - the output produced by a worker over a given amount of time - has fallen by 5.7 per cent. Treasurer Jim Chalmers has said while the first term was focused primarily on getting inflation down and improving productivity second, reigniting productivity growth would be the main economic focus of the next three years. To that end, the Productivity Commission will conduct inquiries into 15 reform areas, including finding a way to harness generative artificial intelligence. As well as making workers more efficient, Deloitte Human Capital Partner Sarah Rogers said AI could free up employees to perform higher quality or new work, enhancing a job's desirability. "For example, the role of AI for professionals is enormous," she said. "There are large opportunities for automating or augmenting routine tasks and creating worker efficiencies across many occupations." Productivity outcomes have been particularly dismal in the construction industry, compounding the challenge of increasing dwelling supply to make housing more affordable. A report by the Committee for Economic Development of Australia found the dominance of very small businesses, inefficient tax settings and overly-complex land regulation was dragging the industry's productivity down. As a result, Australia is building half as many homes per construction worker today as in the 1970s, said the committee's chief economist Cassandra Winzar. To fix it, Australia should encourage building companies to move away from the dominant sub-contracting model and grow in size. "Smaller firms are less productive than bigger firms because they can't achieve the same productivity gains from innovation, investment and economies of scale," Ms Winzar said. Stream-lining planning and zoning laws across all levels of government and expanding national licensing for trades such as electricians would remove barriers for firms to expand interstate, the report found. The government should also reform the tax system to remove disincentives for sole traders from joining a business, with self-employed workers paying less tax than salaried employees.
Perth Now
26-05-2025
- Business
- Perth Now
AI in sights to build up nation's sliding productivity
Beneath its robust facade, deep-seated cracks threaten the integrity of Australia's jobs market. Wages are growing in real terms, unemployment is historically low and falling interest rates bode well for further jobs growth. But employment growth has been lumpy, with investment in government-reliant industries such as health and childcare masking weakness in the market sector, says Deloitte Access Economics partner David Rumbens. As growth in public spending and immigration trend downwards, the pace of job creation will slow from 2.7 per cent to 2.3 per cent in 2024/25 and 1.5 per cent the year after, Deloitte's latest quarterly Employment Forecasts report found. The good news is wages growth remains strong and Australia's economy looks to be on the way up, despite uncertainty caused by Donald Trump's trade war. "All sectors are expected to benefit from the gradual economic upturn, with consumer-facing industries poised for growth due to the combined effects of tax cuts, government rebates and anticipated cuts to interest rates," said Mr Rumbens, the report's lead author. But Australia's abysmal productivity performance threatens to limit workers' dividends. "The sustainable way to maintain healthy wage growth is through productivity gains - something the treasurer has recently nominated as being central to the Labor government's second term," Mr Rumbens said. Since March 2022, labour productivity - the output produced by a worker over a given amount of time - has fallen by 5.7 per cent. Treasurer Jim Chalmers has said while the first term was focused primarily on getting inflation down and improving productivity second, reigniting productivity growth would be the main economic focus of the next three years. To that end, the Productivity Commission will conduct inquiries into 15 reform areas, including finding a way to harness generative artificial intelligence. As well as making workers more efficient, Deloitte Human Capital Partner Sarah Rogers said AI could free up employees to perform higher quality or new work, enhancing a job's desirability. "For example, the role of AI for professionals is enormous," she said. "There are large opportunities for automating or augmenting routine tasks and creating worker efficiencies across many occupations." Productivity outcomes have been particularly dismal in the construction industry, compounding the challenge of increasing dwelling supply to make housing more affordable. A report by the Committee for Economic Development of Australia found the dominance of very small businesses, inefficient tax settings and overly-complex land regulation was dragging the industry's productivity down. As a result, Australia is building half as many homes per construction worker today as in the 1970s, said the committee's chief economist Cassandra Winzar. To fix it, Australia should encourage building companies to move away from the dominant sub-contracting model and grow in size. "Smaller firms are less productive than bigger firms because they can't achieve the same productivity gains from innovation, investment and economies of scale," Ms Winzar said. Stream-lining planning and zoning laws across all levels of government and expanding national licensing for trades such as electricians would remove barriers for firms to expand interstate, the report found. The government should also reform the tax system to remove disincentives for sole traders from joining a business, with self-employed workers paying less tax than salaried employees.
Perth Now
26-05-2025
- Business
- Perth Now
Key work trend set to continue in 2026
Australian workers will continue to work from home, although not as much as some would like, as the insane amount they are saving comes to light. Fresh figures released by Deloitte Access Economics shows the average Australian worker could save $5308 a year by taking out transportation and fuel costs. It is also having the added benefit of having a happier workforce, which is reducing turnover for employers, the report said. It also said the tug of war between employees wanting to be able to work from home and employers wanting them to be in the office more often appears to have ended for now, with 80 per cent believing WFH would remain fro at least the next two years. Deloitte Access economics partner and lead author David Rumbens told NewsWire employers are meeting employees in the middle, focusing on hybrid working models. 'There has been this tension as employees have preferences working from home because it saves on travel costs and time,' Mr Rumbens said. Australians are saving thousands by avoiding going into the office everyday. NewsWire / Luis Enrique Ascui Credit: News Corp Australia 'There is certainly a body of thinking that collaboration in person aids productivity and innovation, hence, where there is flexible work there is encouragement of some time collaborating and working together. 'We are now seeing a lot of organisations in the white collar and professional space settling on a hybrid mix allowing for those benefits of teaming and proximity.' These balances come as the overall strength of the workforce shows the employment rate remains at a near record low of 4.1 per cent, with 390,000 more Australians finding work over the last 12-months. In April alone the employment rate surged by 89,000 people, but it's not all good news for workers. 'The overall strength of the labour market has masked the relative strength of non-market sector employment compared to the market sector,' Mr Rumbens said. 'In the year to the December quarter of 2024, the non-market sector (health care, education, public administration) accounted for approximately 80 per cent of total employment gains.' Australia's Cash Rate 2022 Productivity lags remains the key threat to living standards Deloitte said with inflation moderating, wages ticking up and interest rates ticking down, there could be further boosts to jobs if it wasn't for the 'abysmal' productivity performance. 'Australian labour productivity has fallen considerably over the past three years,' he said. 'Since its peak in March 2022, Australia's labour productivity has fallen by 5.7 per cent and labour productivity in the non-market sector now sits at a near 20-year low, underscoring why boosting productivity growth should be a top priority for the government.' But productivity falls remains a key threat to market. NewsWire / Nicholas Eagar Credit: NewsWire Mr Rumbens said if this continues to fall over a number of years, Australian workers will eventually see a fall in living standards. 'We want productivity gains so we can get sustainable real wage growth. 'The risk if we don't have productivity all the nice wage growth goes back into price growth and we're effectively no better off. 'So it becomes really important to drive living standards and the ability to sustainably actually generate real wage growth over time.' Mr Rumbens said Australians just experienced a real cost of living crisis over the last two years, going through a per capita recession which could return if productivity doesn't improve. 'It could be that it means inflation rises again. 'While the Reserve Bank is cutting rates and experts expect it to continue but none of that is guaranteed. 'So if productivity goes backwards, then prices will go up and hence you go back into a cost-of-living spiral, which workers have just been through. 'They got reasonable wage growth but price growth was much more, so they ended up being poorer over the last, effectively, three years. Despite the risks Mr Rumbens said workers could over time help solve the problem. 'We've seen from the Treasurer, the agenda for the second term of government will be productivity focused without forgetting about cost of living. 'Part of that is encouraging technology use, encouraging innovation by private businesses. 'Skills need to evolve as well. In many cases there needs to be a skill or knowledge boost that goes along side the technology boost.
West Australian
26-05-2025
- Business
- West Australian
Australians insane savings from key working trend
Australian workers will continue to work from home, although not as much as some would like, as the insane amount they are saving comes to light. Fresh figures released by Deloitte Access Economics shows the average Australian worker could save $5308 a year by taking out transportation and fuel costs. It is also having the added benefit of having a happier workforce, which is reducing turnover for employers, the report said. It also said the tug of war between employees wanting to be able to work from home and employers wanting them to be in the office more often appears to have ended for now, with 80 per cent believing WFH would remain fro at least the next two years. Deloitte Access economics partner and lead author David Rumbens told NewsWire employers are meeting employees in the middle, focusing on hybrid working models. 'There has been this tension as employees have preferences working from home because it saves on travel costs and time,' Mr Rumbens said. 'There is certainly a body of thinking that collaboration in person aids productivity and innovation, hence, where there is flexible work there is encouragement of some time collaborating and working together. 'We are now seeing a lot of organisations in the white collar and professional space settling on a hybrid mix allowing for those benefits of teaming and proximity.' These balances come as the overall strength of the workforce shows the employment rate remains at a near record low of 4.1 per cent, with 390,000 more Australians finding work over the last 12-months. In April alone the employment rate surged by 89,000 people, but it's not all good news for workers. 'The overall strength of the labour market has masked the relative strength of non-market sector employment compared to the market sector,' Mr Rumbens said. 'In the year to the December quarter of 2024, the non-market sector (health care, education, public administration) accounted for approximately 80 per cent of total employment gains.' Australia's Cash Rate 2022 Productivity lags remains the key threat to living standards Deloitte said with inflation moderating, wages ticking up and interest rates ticking down, there could be further boosts to jobs if it wasn't for the 'abysmal' productivity performance. 'Australian labour productivity has fallen considerably over the past three years,' he said. 'Since its peak in March 2022, Australia's labour productivity has fallen by 5.7 per cent and labour productivity in the non-market sector now sits at a near 20-year low, underscoring why boosting productivity growth should be a top priority for the government.' Mr Rumbens said if this continues to fall over a number of years, Australian workers will eventually see a fall in living standards. 'We want productivity gains so we can get sustainable real wage growth. 'The risk if we don't have productivity all the nice wage growth goes back into price growth and we're effectively no better off. 'So it becomes really important to drive living standards and the ability to sustainably actually generate real wage growth over time.' Mr Rumbens said Australians just experienced a real cost of living crisis over the last two years, going through a per capita recession which could return if productivity doesn't improve. 'It could be that it means inflation rises again. 'While the Reserve Bank is cutting rates and experts expect it to continue but none of that is guaranteed. 'So if productivity goes backwards, then prices will go up and hence you go back into a cost-of-living spiral, which workers have just been through. 'They got reasonable wage growth but price growth was much more, so they ended up being poorer over the last, effectively, three years. Despite the risks Mr Rumbens said workers could over time help solve the problem. 'We've seen from the Treasurer, the agenda for the second term of government will be productivity focused without forgetting about cost of living. 'Part of that is encouraging technology use, encouraging innovation by private businesses. 'Skills need to evolve as well. In many cases there needs to be a skill or knowledge boost that goes along side the technology boost.
