Latest news with #labourproductivity
SBS Australia
3 days ago
- Business
- SBS Australia
All about the federal government's productivity summit
Listen to Australian and world news, and follow trending topics with SBS News Podcasts . As government officials, business leaders and economists attend a national economic round table in Canberra this week, you will keep hearing them mention a buzzword: productivity growth. According to the Reserve Bank, productivity refers to how much output can be made within a given set of inputs. One is labour productivity, which focuses on workers themselves, such as their skillsets, the technology they use, and how they are managed. The other one is multifactor productivity, which looks at factors beyond the workers, such as capital, land, energy and materials. Why will it be the focus of the national economic round table this week? Federal Treasurer Jim Chalmers says that's because there's no better time than now to talk about it. "Our economy is finally balanced, between the progress we've made on wages and inflation and living standards and the productivity that we desperately need to sustain that progress in the years and decades ahead. Living standards, higher living standards, are the holy grail, and that makes productivity the primary focus." In recent decades, Australia's productivity growth has slowed. During the Financial Year of 2022/2023, it was only 0.9 per cent. It mirrors the general experience of many advanced economies, but the Reserve Bank says the slowdown also reflect persistent flaws of Australia's economy, such as declining business competition, slower upgrades in technology, and low wage growth. Trent Wiltshire, Deputy Director of Grattan Institute's Economic Prosperity program, says in the past decade, there have been attempts and measures by both federal and state governments to increase talent pools and business investment. "There have been reforms to skilled migration in the past few years, (such as) streamlining employer sponsorship (which has been) good, the reform of point tests (which) is underway - that's a big layer for the input - but it hasn't been implemented. There's been some attempts on tax reform, although not particularly big. We have seen some changes in higher education. State governments also play a role too, so we've seen Victorian and New South Wales (government) are reforming their planning system on more houses can be build at where people live." But Mr Wiltshire says these policies haven't been able to offset some persistent barriers for Australia's productivity, including its ageing population. He says Australia's growth of service sector also slows down productivity. Ahead of the round table, various stakeholders already signal their pitches to boost Australia's productivity. Business representatives call for cutting the levels of red tapes and the uptake of emerging technology. Unions want to see four-day working weeks. Welfare advocates urge the Government to fix what they call the broken employment services. Among the calls, one of the most controversial topics is artificial intelligence. It follows the Treasurer's comment that A-I is what he calls a game changer for Australia's economy. But questions have been looming regarding A-I's tolls on human jobs, regulations on copyrights, and the capacity of businesses to roll out the technology. Even Mr Chalmers has also admitted that Australia needs to find a middle path for A-I. Dr Jake Goldenfein is a law and technology scholar at Melbourne Law School. His research has found while A-I may help boost productivity at work, the roll out of A-I can be pricey and slow. "If we as a nation are interested in increasing sovereign capability around A-I and getting benefits from A-I, we need to think about ways in which we can do that but don't rely so heavily on international software companies, because we are sending a lot of cash overseas in order to procure these technology products that aren't necessarily what our organisations need, and require a lot of work to operate safely." The three-day national summit only serves as a brainstorming platform for the Albanese government. But Danielle Wood, the chair of the Productivity Commission, says the government needs to re-adopt what she calls the growth mindset to its policy making, as young Australians are already paying price for the low productivity growth. "Australians born in the 1990s – who hit the job market in the 2010s when economic growth was slow – were the first generation not to earn more than people born a decade before. "This generation will bear more of the cost of addressing climate change – both the impacts of wilder weather, and the policy response – because Australian policy makers have for so long avoided the lowest cost policy choices." Dr Chalmers says he has realistic but also optimistic expectations on the outcome of the summit. He says while the round table won't solve all economic problems in three days, it will set light on the government's budgets in the next three years. "I'm optimistic that there is an appetite for reform, there is ambition when it comes to dealing with the three major challenges in our economy, productivity first of all, but also economic resilience and also budget sustainability as well. So I'm realistic, but I'm optimistic that we can make some progress together."
Yahoo
24-06-2025
- Business
- Yahoo
Reducing government debt in Canada could boost incomes for average workers by $2,100 a year
VANCOUVER, BC, June 24, 2025 /CNW/ - If Canadian governments reduced their debt relative to the size of the economy (GDP) over five years back to pre-pandemic levels, this would increase productivity and boost incomes for average workers by $2,100 a year, according to a new study published by the Fraser Institute, an independent non-partisan Canadian think-tank. Labour productivity is a much of the output, namely the value of goods and services produced per hour of labour (work) in an economy. It is a broad measure of how well an economy can transform inputs like labour and raw materials into useable outputs. "Labour productivity plays a crucial role in improving living standards and powering economic growth, but government deficits and debt in Canada are a detriment to productivity, and in turn are making life worse for Canadians," said Ergete Ferede, senior fellow at the Fraser Institute and author of The Impact of Government Debt on Labour Productivity in Canada. The study finds Canada's burden of general government gross debt represented about 107 per cent of the national economy in 2023 (the latest year of comparable data)—ranking 7th highest for debt relative to the size of the economy among a group of 38 advanced countries. But, if Canadian governments gradually reduced debt relative to the size of the economy, labour productivity would increase by about 1.6 per cent, which could boost the annual income of an average employee working 40 hours a week by approximately $2,100 (adjusted for inflation). "Deficits and debt have many costs, including a less productive workforce and lower wages for Canadians than they otherwise would enjoy," Ferede explained. "Governments in Canada should curb their dependency on deficit-financed spending so Canadians can enjoy higher labour productivity and higher living standards." Follow the Fraser Institute on Twitter and Facebook The Fraser Institute is an independent Canadian public policy research and educational organization with offices in Vancouver, Calgary, Toronto, Halifax and Montreal and ties to a global network of think-tanks in 87 countries. Its mission is to improve the quality of life for Canadians, their families and future generations by studying, measuring and broadly communicating the effects of government policies, entrepreneurship and choice on their well-being. To protect the Institute's independence, it does not accept grants from governments or contracts for research. Visit SOURCE The Fraser Institute View original content to download multimedia:
Daily Mail
23-06-2025
- Business
- Daily Mail
Proof that high overseas immigration DOESN'T make your city richer
High immigration levels are failing to make Australians richer - at least judging by the cities foreigners are moving to in droves. A 2023 study by the Centre for Population partnered with the OECD found that Australian-born workers benefitted from boosted labour productivity, wages and employment rates in regions that had high migration. According to the report, on average a region with 10 per cent larger migrant share had a 1.3 per cent larger regional wage difference, while a 1 per cent rise in annual migrant inflow, lead to a 0.53 per cent increase in employment for all genders and ages. Sydney and Melbourne last year accommodated 61 per cent of the 340,800 new migrants who relocated to Australia. But instead of boosting prosperity in Australia's two biggest cities, rapid population growth from those who have relocated from overseas appears to only be causing a big exodus to other states - limiting economic activity. Victoria last year housed 100,503 new overseas migrants or 29.4 per cent of the new permanent and long-term arrivals into Australia. Australia's most populous state, covering Melbourne, is home to 26 per cent of the nation's 27.4million people but only comprises 22 per cent of the national gross domestic product. Commonwealth Bank associate economist Lucinda Jerogin noted Victoria's economic growth pace has lagged as 3,203 residents left for another part of Australia last year. She said in Victoria, the 'net number of interstate migration' or the amount of people moving from within Australia to the state, 'has been around zero for the last few quarters'. 'This is well below the pre-Covid trend where Victoria was a popular destination for internal migrants.' 'Victoria's economy is also weak. The unemployment rate is the highest of any state or territory,' she said. Victoria's unemployment rate of 4.4 per cent is well above the national average of 4.1 per cent. The state's continuing exodus to other states and a weak economy also kept a lid on house prices with values falling by one per cent in the year to May. They continued soaring in Brisbane and Perth - two cities receiving a big influx of interstate migration. NSW is home to 31 per cent of Australia's population but makes up 30 per cent of national GDP. Last year it received 106,730 foreign migrants, and 28,113 people left for another part of Australia. 'Growth in the country's largest state economy is sluggish,' Ms Jerogin said. By contrast, WA has Australia's strongest population growth pace of 2.4 per cent, based on attracting 12,612 new interstate migrants last year on top of the 45,124 overseas migrants moving in. The mining-rich state makes up 11 per cent of Australia's population but makes up 17 per cent of the national economy, thanks to lucrative revenue streams from exporting iron ore to China. WA is also resilient to Donald Trump's tariffs, with exports of gold to the United States soaring by 31.6 per cent during the first three months of 2025. 'WA exports have fallen off its peak, however, US destined exports have skyrocketed,' Ms Jerogin said. Queensland houses 20.5 per cent of Australia's population and makes up 20 per cent of the national economy. But some provincial states are contributing less to the economy. SA makes up 7 per cent of Australia's population but only 5 per cent of GDP. It also saw 1,582 residents leave for another part of Australia. 'The smaller states and territories are all also seeing negative interstate migration, a return to more normal trends that were present pre-Covid,' Ms Jerogin said.
