Productivity Returns to Centre Stage: Treasurer Charts Reform Agenda

Productivity – long considered the quiet workhorse of economic growth – is now front and centre in Australia’s political and policy debate.

Ahead of the opening weeks of the new parliamentary term, the Prime Minister, the Treasurer, the Opposition, and leading crossbenchers have all declared productivity a top priority, recognising that sustainable wages, investment, and living standards depend on getting the economy moving more efficiently.

As Treasurer the Hon Jim Chalmers MP put it in his recent address to the National Press Club of Australia: “Productivity is our primary focus.” His speech laid the groundwork for an August roundtable aimed at building national consensus around long-term economic reform.

What Is Productivity — And Why Does It Matter?

Productivity measures how much output is generated for every hour of work. Over the long term, it is the key driver of real wage growth, improved living standards, and national prosperity.

While Australia’s economy has achieved stability in employment and inflation, underlying productivity growth has stalled, with the national 20-year average now at its lowest in decades, according to data from the Australian Bureau of Statistics.

Boosting productivity enables the economy to produce more with the same or fewer inputs, allowing workers to earn more, businesses to expand, and governments to sustainably fund services.

Conversely, stagnant productivity limits growth and deepens fiscal pressures – particularly as Australia faces an ageing population, geopolitical instability, and growing competition in global markets.

The Government’s Second-Term Reform Agenda

The Treasurer used his National Press Club address to chart a comprehensive second-term productivity agenda grounded in three priorities: productivity, budget sustainability, and economic resilience.

Major initiatives already underway include:

• A $900 million National Productivity Fund;
• Banning non-compete clauses and introducing national occupational licensing;
• Digital transformation initiatives such as Digital ID and Right to Repair;
• A revitalised National Competition Policy agenda;
• A strategic review of R&D and reforms to the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act);
• Major approvals reform, including a new ‘Single Front Door’ for transformational projects.

The Treasurer also emphasised the need to move beyond ideological debates, calling for ideas that are “specific and practical, not abstract or unrealistic.”

The upcoming August roundtable will aim to identify shared reform principles and national priorities for the term ahead.

August Roundtable: A Reform Reset

Scheduled for 19–21 August, the Productivity Roundtable will bring together a small, targeted group of approximately 25 leaders from government, business, unions, civil society, and key economic institutions.

The discussions will be held in the Cabinet Room of Parliament House, signalling both the importance of the process and the government’s intent to embed reform in the machinery of government.

The Prime Minister will open the event, with participants expected to hear from the Governor of the Reserve Bank and the Chair of the Productivity Commission. The Commission’s interim reports on the five pillars of the Government’s productivity agenda will serve as core inputs to the discussion.

The roundtable will not revisit problem definitions or ideological debates. Rather, its goal is to build consensus around long-term reform priorities, assess where cross-sector support exists, and generate a practical roadmap that can inform reform over the course of the term and beyond. According to the Treasurer, “This isn’t a summit – it’s a working session.”

Participation is limited, but Treasury will issue a public call for targeted submissions in the lead-up, and ministers will be expected to consult widely with stakeholders in their own portfolios. Contributions must meet three criteria: they must serve the national interest (rather than sectoral or vested interests), be at least budget-neutral, and be specific and actionable.

The Treasurer has committed to reporting outcomes and principles emerging from the roundtable and embedding them into Cabinet processes, Expenditure Review Committee deliberations, and regulator engagement.

A day prior to the roundtable, Danielle Wood, Chair of the Productivity Commission, will deliver an address to the National Press Club titled ‘Growth imperative: How to fix our productivity problem.’

Ms Wood will outline why reversing Australia’s productivity slowdown – with growth since 2015 averaging just one-quarter of its 60-year trend – must be a top national priority. Her speech will draw on the Commission’s interim reports, to be released across July and August, which set out key reform proposals across the five pillars of economic dynamism, skills, care, technology, and the energy transition.

Opposition Focus: Productivity and Deregulation

The Opposition has also elevated productivity on its agenda, appointing Senator Andrew Bragg as Shadow Minister for Productivity and Deregulation. Senator Bragg has framed the debate around reducing red tape and restoring confidence for business investment.

“We are committed to listening to Australians on the front line of our economy,” Senator Bragg said. “Across the economy, every sector has a story of Labor’s bureaucratic bottlenecks destroying investment and job opportunities… Small businesses are people too. But that’s not how Labor sees it.”

Senator Bragg criticised the government’s regulatory approach and called for pro-entrepreneurship policies: “The Coalition will listen to businesses and develop policies to boost economic output.”

Crossbench Contribution: Spender’s Five Pillars Plan

Independent Ms Allegra Spender MP has also put forward a detailed submission to the Productivity Commission’s five pillars inquiries, urging the government to broaden its scope and ambition. Her key proposals include:

• Broad tax reform, including the removal of distortionary levies like stamp duty;
• Addressing declining business lending and unlocking superannuation for innovation;
• A sector-by-sector regulatory review;
• Embedding productivity within industrial relations;
• A cultural shift toward fast, accountable public sector decision-making.

Ms Spender has urged the Government to include high-growth young firms in the August roundtable, noting that “productivity is significantly driven by innovative young firms.”

She also warned against piecemeal reform, calling instead for “tangible, sector-specific interventions” and institutional accountability from regulators.

Productivity and Regulation: Getting the Balance Right

The relationship between regulation and productivity is complex. Effective regulation can protect consumers, safeguard the environment, and promote fair competition, while poorly designed or duplicative rules can act as a drag on investment, innovation, and job creation.

The Treasurer acknowledged this balance in his remarks, emphasising the need to “cut red tape without lowering standards.” Reforms to environmental approvals, infrastructure delivery, and occupational licensing aim to reduce bottlenecks while maintaining regulatory integrity.

A pro-productivity agenda, in this sense, is not about deregulation for its own sake – it is about designing systems that enable capital to flow, projects to proceed, and businesses to grow, while upholding public standards and trust.

The Stakes and the Opportunity

Australia’s demographic shifts, fiscal pressures, and global competitiveness challenges have converged to make productivity not just an economic goal, but a national necessity. The upcoming August roundtable presents a unique opportunity to set a long-term course.

The Treasurer’s parting message captured the urgency: “The opportunity is too substantial to waste this term or waste our time… If we fail, it won’t be from a shortage of ideas – but from a shortage of consensus.”

In that spirit, the roundtable looms as more than a policy forum. It may prove a test of whether Australia’s political, business, and civil institutions can collectively rise to meet the productivity challenge of the decade ahead.

Photo credit: Alpha Stock Images