The OECD’s presentation of the data shows that Australians have risen 5 places (from 15 to 10) in the twenty-one member OECD’s ranking of GDP per capita between 1990 and 2002.
But this is at the expense of hours worked: productivity per hour worked is unchanged in that time!
Australian productivity levels are well below those recorded in several other OECD countries, as are participation rates among some working-age population groups. Hence policies should:
- Maintain stable macroeconomic conditions via macro policies that aim at low inflation and at least budget balance on average over the economic cycle. Such policies are important to manage risks around the short-term economic outlook, including the price of oil, exchange-rate volatility and adjustment in the housing sector.
- Promote higher productivity growth by further strengthening competitive pressures in the economy via: completion of unfinished business of the National Competition Policy (NCP) agenda and the adoption of an extended reform agenda, following the Productivity Commission inquiry into the future of the NCP.
- Explore ways of ensuring optimal investment in regulated network sectors that operate across several jurisdictions.
- Ensure that the labour market functions more effectively by: promoting the negotiation of wages and employment conditions at the enterprise and individual levels; removing disincentives to hiring, especially of low-skilled workers; enhancing human capital by improved training and education; and creating stronger incentives to participate in the labour market, especially for older workers.
- Promote national water policies that aim at removing distortions in pricing as between classes of users. (oecd)