Australia’s economy could grow more rapidly if governments restore the “growth mindset” that has been missing from policymaking for far too long, according to Danielle Wood, chair of the country’s Productivity Commission.
“Governments must embed the importance of growth in every decision they make. This means engaging with trade-offs, better program delivery and design, and the ‘boring but important work’ of reducing administrative burden,” Wood said in a speech on Monday ahead of this week’s Economic Reform Roundtable.
The three-day roundtable kicks off on Tuesday, amid a period when Australia’s productivity trails that of most developed nations, Bloomberg reports.
Treasurer Jim Chalmers aims to address this by convening business leaders, labour unions, government officials, and other experts to discuss three main themes: resilience, productivity, and budget sustainability alongside tax reform.
The factors that fuelled Australia’s strong economic performance over recent decades, particularly China’s huge demand for minerals, are starting to diminish.
Last week, the central bank lowered its productivity growth forecast to 0.7%, down from a long-term average of 1.6%.
Consequently, the Reserve Bank also cut its estimate of Australia’s potential growth rate to 2%, compared with roughly 3% two decades ago.
Chalmers has consistently said that boosting productivity is a top priority for the centre-left Labour government, which secured a landslide re-election earlier this year. However, on Monday, the treasurer took a more cautious stance.
“I don’t believe we will solve every challenge in our economy in three days. This is all about three days to inform the next three budgets and beyond,” he told reporters.
Furthermore, when asked about the timeline for implementing the roundtable’s recommendations, Chalmers declined to commit, noting it “would depend on the nature and magnitude of the changes being proposed.”
His remarks follow similar caution from senior government officials, who have been tempering expectations amid calls to raise the consumption tax, eliminate housing tax breaks, and pursue other politically sensitive measures that no government has addressed in a generation.
The roundtable opens with statements from Prime Minister Anthony Albanese and Treasurer Chalmers, followed by a presentation from Reserve Bank Governor Michele Bullock. Other Day 1 speakers include Macquarie Group Managing Director and CEO Shemara Wikramanayake.
Day 2 begins with Danielle Wood, followed by BHP Australia President Geraldine Slattery. On the final day, presentations will be given by Treasury Secretary Jenny Wilkinson, Grattan Institute CEO Aruna Sathanapally, and local economist Chris Richardson.