Australia’s productivity level has fallen sharply over the past 15 years. The Productivity Commission,which is carrying out new research into policy remedies to the problem,has found Australians’ living standards have been propped up bypeople working longer than in other nations.
Some economists believe a global fall in competitive pressures,partly due to the emergence of large businesses dominating key sectors of the economy,has contributed to the slowdown in productivity growth.
On Thursday,Leigh will release Treasury and broader analysis showing that across a string of key metrics,the level of Australian economic dynamism has fallen over recent years,contributing to the slowdown in productivity growth.
“Over recent decades,there have been a number of significant changes in the Australian economy. The job-switching rate has fallen. The business start-up rate has declined. The largest firms have increased their market share. Mark-ups have increased,” he will say.
“All this suggests that the Australian economy has become less competitive.”
One measure of a country’s dynamism is the proportion of people shifting into new jobs. Between February 2002 and May 2008,8.7 per cent of Australia’s workers started a new job in the previous three-month period.