EFN405
EFN405
Australia’s Declining Productivity
Nicholas Woods n9496220Tutor: Ambroise Descamps
Australia’s Declining Productivity
Nicholas Woods n9496220Tutor: Ambroise Descamps
08
Fall
08
Fall

Table of Contents 1.0 Introduction 3 2.0 Australia’s Economic Performance 3 2.1 2001-2007 Economic Performance 4 2.2 2008-2012 Performance 4 2.3 Relationship Between Economic Growth and Productivity Growth 5 3.0 Policies Used to Address Lagging Productivity Growth 7 3.1 Infrastructure 7 3.2 Regulation Reform 8 3.3 Policy Effectiveness 9 4.0 Conclusion 10 5.0 Reference List 11

1.0 Introduction
Driven by its dependence on natural resources, Australia’s economy has performed well in the aftermath of the 2007-08 Global Financial Crisis. The relative ease at how Australia has fared post crisis has disguised a worrying trend, a lagging productivity growth. Commissioned by the House of Representatives Economics Committee this report will cover Australia’s productivity performance between 2008 and 2014, gaining a greater understanding of the factors behind Australia’s declining productivity performance. This report will cover productivity growth before and after the GFC, critical analysis of policies aimed at addressing lagging productivity and the effect of these policies on the recovery from the GFC.

‘Productivity is a measure of how efficiently an economy is operating…Australia’s future productivity performance will affect its rate of recovery from the current global financial crisis as well as its future prosperity and capacity to address the longer-term challenges of population ageing and climate change”(Productivity Commission, 2009). The Productivity Commission (2009) define two main measure of productivity, labour productivity and multifactor productivity. Labour productivity is the real GDP per hour worked. Multifactor productivity