Australia’s economy is like a car struggling to reach 30 kilometres an hour. Push it to 40 and the strain becomes obvious — much like my first car, a brown Datsun 200B that needed a service every time it was driven too hard.
Productivity growth, or the lack of it, is now the defining constraint on our economic capacity. Unless we confront it directly, our national speed limit will keep falling.
For decades, productivity growth quietly delivered rising living standards. Today it has almost completely stalled. Business investment remains weak. Approval processes drag on for years. Tax and regulatory settings have slipped out of alignment with competitor economies.
These issues are shaping Australia’s economic trajectory and they demand political attention.
Australia’s productivity challenge is often described as a technical or economic issue. It isn’t. It is increasingly a political economy problem, rooted in accumulated decisions, institutional drift and the growing difficulty of getting things done.