Our GDP growth figures look healthy, but buried among the data is our abysmal productivity. You can expect this to feature heavily in the upcoming election campaign, writes Ian Verrender.
“Productivity isn’t everything, but in the long run it is almost everything. A country’s ability to improve its standard of living over time depends almost entirely on its ability to raise its output per worker.” – Paul Krugman.
Are we really a nation of bludgers?
There are many who would argue that, yes indeed, Australians have had it so good for so long, that they have yet to realise the impending dangers posed by the forces of globalisation.
As for evidence, you need look no further than economic growth statistics produced a fortnight ago.
True, the raw numbers showed the economy was booming. Gross Domestic Product surged to 3 per cent, way above the expectations of pretty much all the experts, and far better than our own recently downgraded long-term expectations for 2.5 per cent.
But buried in among all the data was the continuing tale of our abysmal productivity. GDP per hours worked rose just 0.2 per cent in the December quarter, in trend terms, and 0.4 per cent for the year.
As the yet-to-be-announced federal election campaign grinds on for the next few months, our declining productivity is likely to feature heavily in the ensuing debate.