Productivity Commission says more reform ambition needed as ‘declining appetite’ holding Australia back

Productivity Commission chair Danielle Wood says a “declining reform appetite” is holding the country’s growth back and more “big meanie” decisions need to be made.

In a speech due to be delivered at the National Press Club on Monday, Ms Wood will call on the Federal Government to foster more of a “growth mindset”.

“Governments must embed the importance of growth in every decision they make,” Ms Wood will say according to a draft version of her speech seen by The West Australian.

“This means engaging with trade-offs, better program delivery and design, and the ‘boring but important work’ of reducing administrative burden.”

Productivity will be at the heart of an upcoming three-day economic reform roundtable — set to kick off in Canberra on Tuesday — with Ms Wood set to hold one of only a handful of seats at the table.

While visiting the Resource Technology Showcase in Perth on Sunday, Prime Minister Anthony Albanese said he was open to hearing a “full suite of ideas” at the event but also warned “responsible fiscal policy” was a priority.

“What we’re doing is inviting people to come in, from business, from unions, from civil society, to put forward their ideas about how we deal with the economic challenges of boosting productivity,” Mr Albanese said.

Ms Wood has likened the roundtable to “Christmas” and “grand finale of Master Chef” for her, saying she was armed with a string of “practical reform suggestions” on a topic “worth a few days locked in a room” exploring.

During her address, Ms Wood is expected to highlight the “common phenomenon across many richer nations” that Australia is, too, grappling with — “less policy emphasis on growth and a declining reform appetite”.

“In the past month the Productivity Commission has released five interim reports setting out recommendations to promote productivity across what the government calls their five pillars: economic dynamism, skills and the workforce, data and digital, the care economy, and the net zero transformation. For each, we focus on a small set of policy reforms that could shift the dial,” Ms Wood is expected to say.

Ms Wood says more hard conversations need to be had, acknowledging “no one wants to be the ‘big meanie’ critiquing a worthwhile objective’.

She will also blame a “decline in bipartisanship, the influence of vested interests and the 24/7 media cycle” for adding to the decline of productivity.

“I think there is another reason as well. Growth has simply fallen down the list of priorities in policy making. This manifests not just in less economic reform but in decisions by governments – Federal, state and local – to pay less attention to growth trade-offs in pursuing other policy goals,” she states.

Ms Wood will also use the speech to warn the Government that it will be judged on its actions out of the roundtable.