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In its second term, the Albanese government says it will focus on productivity and within that are some powerful and exciting messages for the built environment and the net zero transition.
The following are edited highlights from Treasurer Jim Chalmers’ address to the National Press Club on Wednesday.
As the PM made clear here, delivering our commitments in housing and energy and across the board is the best place to start – but it’s not the limit of our ambitions.
They’re a foundation, not a destination.
Global volatility
The international environment and the global economy will be the main influences that shape and constrain our choices this term.
This month, the World Bank warned global growth is on track to be close to its weakest in nearly two decades.
It’s a perilous moment there, and that means even more perilous times for the global economy too.
Three priorities
The best defence against global volatility and the best way to lift living standards is with a more productive economy, a stronger budget, and more resilience.
It’s why I’ll organise this term, my time, and our team – consistent with these 3 highest priorities.
It’s why in the aftermath of the election, the PM and I discussed and agreed on the economic roundtable I’m convening in August.
It’s not to retract or retrace the steps we took in the first term but to renew and refresh our reform efforts.
Not because we won a big majority –
But because we have a big opportunity –
And because we embrace this big responsibility.
Productivity
Productivity is our primary focus.
Too often it’s seen as a cold, almost soulless, concept – when it’s really the best way of making people better off over time, creating more opportunities, making our economy and our society more dynamic.
By now, our shortage of productivity growth is well known and broadly understood.
Almost every comparable country has the same challenge.
Our own productivity problem hasn’t been with us for a couple of years; it’s been with us for a couple of decades.
Firstly, our economy is not dynamic or innovative enough.
Secondly, private investment has picked up, but not by enough to make our capital deep enough.
Thirdly, skills aren’t abundant enough or matched well enough to business needs.
Finally, our changing industrial base and the growth in services – where productivity is harder to find, and where traditional measures don’t account well for quality.
There’s a role for government in getting the settings right, getting regulation right, and targeted interventions in key areas like the energy transformation and housing.
But businesses need to step up too and invest in new technologies, more efficient operations, and skills.
We’ve encouraged a broader approach to productivity that goes beyond the old, tired and formulaic fights.
The five pillars for productivity
That’s why we agreed a five pillar productivity agenda with national cabinet based on the analysis in the Intergenerational Report and focused on:
creating a more dynamic and resilient economy
investing in the net zero transformation
building a skilled and adaptable workforce
harnessing data and digital technology
and delivering quality care more efficiently
We’ve made substantial progress on all of them.
We’re expanding our Right to Repair reforms and adopting safe overseas standards to reduce regulation.
And working to attract more investment to deepen the capital base of our economy.
Our Future Made in Australia agenda is part of it –
But also strengthening, streamlining and speeding up project approvals.
After our first term, more than double the rate of foreign investment approvals and 50 per cent more environmental approvals are now being processed on time – but again there’s more to do.
That’s why we’re standing up a Single Front Door to help get major transformational projects off the ground more efficiently.
We’re using Jobs and Skills Australia to deliver a more responsive labour market, so we have the right skills mix for the industries of the future.
First, ideas should be put forward in the national interest, not through the prism of sectoral, state or vested interests. Second, ideas or packages of ideas should be budget neutral at a minimum but preferably budget positive overall, taking into account the necessary trade?offs. And third, ideas should be specific and practical not abstract or unrealistic.
We’ve also sought Productivity Commission reports on more reforms under each of the five pillars, due soon.
Better regulation, cutting red tape without lowering standards, has an important role to play as well, with reviews underway of the National Electricity Market and gas markets, and reforms to the EPBC (Environment Protection and Biodiversity Conservation) Act.
The Strategic Review of research and development will be delivered by the end of this year, and that will guide us too.
We will also continue to work with states and territories on the future of road user charging.
Reform roundtable
No sensible progress can be made on productivity, resilience or budget sustainability without proper consideration of more tax reform.
That’s why the reform roundtable I’m convening in August is such a well?timed opportunity.
The roundtable will be about shaping the direction for long term economic reform –
Building consensus on national reform priorities for this term of government and beyond.
The discussions will be held over 3 days, from the 19th to the 21st of August in the Cabinet room, and the PM will kick things off.
The Productivity Commission’s interim five pillar reports will be a key input into this discussion, so I’ll ask chair Danielle Wood to brief the group.
I’ve already spoken to Governor Michele Bullock about participating as well and probably near the start.
It won’t be another huge summit but a small group, with a targeted agenda.
For those who haven’t been inside the cabinet room there’s only about 25 seats around the table –
So that gives you a sense of how many invitations we’ll issue.
There’ll be a mix of government, business, union and civil society representatives and experts.
And ahead of the discussions we will publish the agenda, key issues and attendees.
We’ll call for targeted submissions, which can be submitted through a dedicated Treasury channel.
We want participants to make contributions that meet 3 important preconditions.
First, ideas should be put forward in the national interest, not through the prism of sectoral, state or vested interests.
Second, ideas or packages of ideas should be budget neutral at a minimum but preferably budget positive overall, taking into account the necessary trade?offs.
And third, ideas should be specific and practical not abstract or unrealistic.
In return I give everyone this commitment:
We won’t come at this from an ideological point of view but from the practical, pragmatic and problem?solving middle ground we’re most comfortable on.
