Australia faces a significant productivity challenge, with a 2% quarter-on-quarter decline in productivity reported for the June 2023 quarter according to the Productivity Commission.
This decrease, added to a 1.2% decrease in 2021-22, is because the increase in hours worked surpassed the growth in output. Hours worked increased 2.4% for the whole economy but the rise in output was only 0.4%, resulting in negative labour productivity growth.
So how do we solve this? The Commission says the country can’t rely on working more hours in the short-term as a source of long-term productivity. Rather, an increase in investment and innovation will help drive long-term, sustainable growth in productivity.
#accountant #tax #business