Current Business Issues in Australia
A DECLINE IN PRODUCTIVITY IN AUSTRALIA OVER THE LAST DECADE
TABLE OF CONTENTS EXECUTIVE SUMMARY 1. INTRODUCTION 2. PRODUCTION GROWTH ISSUES 3. PRODUCTION PERFORMANCE IN THE LAST DECADE 3.1 MINING 3.2 UTILITIES 3.3 INVESTMESNT 4. THE DECLINE IN PRODUCTIVITY 4.1 GROWTH IN THE LAST DECADE 4.2 TECHNOLOGY 4.3 INNOVATION 4.4 EDUCATION 5. CONCLUSION, RECCOMMENDATION & IMPLEMENTATION BIBLIOGRAPHY APPENDIX
A decline in productivity in Australia over the last decade
Page 1
EXECUTIVE SUMMARY
Australia’s Productivity growth has been on a steady decline over the past decade. Part of Australia’s productivity prosperity is not assured. While the mining sector is expected to continues to thrive for the foreseeable future, many other sectors as well struggling to improve upon the productivity growth in Australia. In the report I highlighted the alternate source for the decline in productivity which has resulted in no real answers as to what is best way forward. Despite being a simple concepts there is no unique measure of productivity growth being the three most important the demographic, economic and social which are faced over the decade, nevertheless the decline over the last decade broadly in line with the productivity performance. The labour productivity growth over the period of 1989 -90 to 2002 -03 had an average of around 2.0 per cent but slowed to around 0.7 per cent in the subsequent period to 2008-09. The multifactor productivity performance growth in the last decade has been most the mining, utilities industries and investment where most of the slowdown in Australia’s productivity performance is concentrated. The agriculture, forestry and fishing sectors accounts for almost 80 per cent of the decline in Multifactor production growth between 1998-99 and 2007 -08. However the decline in productivity in the mining and utilities industries account for an important part of the slowdown in accumulated market sector productivity growth between the 1990s and
TABLE OF CONTENTS EXECUTIVE SUMMARY 1. INTRODUCTION 2. PRODUCTION GROWTH ISSUES 3. PRODUCTION PERFORMANCE IN THE LAST DECADE 3.1 MINING 3.2 UTILITIES 3.3 INVESTMESNT 4. THE DECLINE IN PRODUCTIVITY 4.1 GROWTH IN THE LAST DECADE 4.2 TECHNOLOGY 4.3 INNOVATION 4.4 EDUCATION 5. CONCLUSION, RECCOMMENDATION & IMPLEMENTATION BIBLIOGRAPHY APPENDIX
A decline in productivity in Australia over the last decade
Page 1
EXECUTIVE SUMMARY
Australia’s Productivity growth has been on a steady decline over the past decade. Part of Australia’s productivity prosperity is not assured. While the mining sector is expected to continues to thrive for the foreseeable future, many other sectors as well struggling to improve upon the productivity growth in Australia. In the report I highlighted the alternate source for the decline in productivity which has resulted in no real answers as to what is best way forward. Despite being a simple concepts there is no unique measure of productivity growth being the three most important the demographic, economic and social which are faced over the decade, nevertheless the decline over the last decade broadly in line with the productivity performance. The labour productivity growth over the period of 1989 -90 to 2002 -03 had an average of around 2.0 per cent but slowed to around 0.7 per cent in the subsequent period to 2008-09. The multifactor productivity performance growth in the last decade has been most the mining, utilities industries and investment where most of the slowdown in Australia’s productivity performance is concentrated. The agriculture, forestry and fishing sectors accounts for almost 80 per cent of the decline in Multifactor production growth between 1998-99 and 2007 -08. However the decline in productivity in the mining and utilities industries account for an important part of the slowdown in accumulated market sector productivity growth between the 1990s and
Bibliography: ABS. (2008b). Australian system of National Accounts. ABS Cat No 5204.0. ABS. (2010a). Australian System of National Accounts, 2000-10. ABS Cat No 5304.0. ABS. (2010b). Experimental Esimate of Industry Multifactor Production, 2009-10. ABS Cat No5260.055.002. Cutler, T. (2008). Venturous Australia: building Strength in Innovation. Melbourne: Culter & Company. Dodgson, M. J. (December 2009). System Thinking, Market Failure and the Development of Innovation Policy : The Case of Australia. In working Paper No. 397. University of Cambridge for Business Research. Eslaske, S. (15th August, 2011). Productivity : The lost Decade. Jensen, B. (2010). Future Compromised by failures in Education System. The Australian. Krugman, P. (1992). The age of Dminished Expectations. US Economic policy in the 1980s, paperback edn, The MIT press, Cambridge. OECD. (2010b). OECD Economic Surveys: Australia 2010. Paris: OECD Publishing. Statistics), A. (. (2010). Research and Experimental Development. All Sector Summary. Steven, G. (2009). Challenges For Economic Policy. Address to the Anika foundation Luncheon supported by Australian Business Economists and Macquarie Bank,Sydney, 28 July. Topp V, L. S. (December 2008). Productivity in the Minng Industry : Measuremnt and Interpretation. Productivity Commission Staff Working Paper. Treasury, A. (2008). Boosting Australia 's Productive Capacity: the role of Infrastructure and Skills. Canberra: Budget Strategy and Outlook. Treasury, A. (2009). Rasing the Level of Productivity Growth in the Australia Economy. Economic Roundup. Treasury, A. (210a). Australia to 2050, Future challenges, Commonwealth of Australi. Canberra. A decline in productivity in Australia over the last decade Page 15 APPENDIX Graph 1: Five years rolling average of labour productivity of Multifactor productivity Table 1: Decomposition of Trend Productivity Growth Figure 1: MFP (Multifactor Productivity) growth in Australia selected sectors, average annual growth, 1985-86 to 2009-10 Figure 2: Labour productivity, capital productivity and Multifactor Productivity in the Australia mining sector 1990-91 to 2009-10 Figure 3: GVA (current year), labour (lagged two years) and capital services (lagged two years) in the Australia mining sector, 1990-91 to 2009-10 A decline in productivity in Australia over the last decade Page 16