Open AccessAustralia's Productivity: Some Insights from Productivity Analysis
Author(s) -
Gordon Jenny
Publication year - 2016
Publication title -
asia and the pacific policy studies
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 0.529
H-Index - 14
ISSN - 2050-2680
DOI - 10.1002/app5.137
Subject(s) - productivity , economics , investment (military) , multifactor productivity , natural resource , quality (philosophy) , natural resource economics , monetary economics , labour economics , macroeconomics , total factor productivity , ecology , politics , biology , political science , law , philosophy , epistemology
Since the turn of the century, multifactor productivity has stagnated. Australia's income growth was supported until recent years by strong growth in the terms of trade and investment, but the terms of trade have been falling since 2011, and investment is slowing. To maintain at least the modest growth rate of the last decade, long term multifactor productivity growth needs to recover. The last decade or so has seen productivity challenges arising from natural resource depletion, as new mines were more costly to develop, and as technological replacements for environmental services, such as desalinisation plants, were increasingly introduced. Lags in the time required to bring major investments online also contributed to the poor performance. More broadly, shifts in tastes and technology have delivered quality improvements to consumers without increases in price commensurate to the additional inputs required, a trend that dampens nominal GDP growth and measured productivity.