"It is positive that the Treasurer Jim Chalmers is seeking to inject more focus on improving our productivity, but his announcement today of a new national fund will not be enough to shift the dial on what has been a lamentable performance for the past decade," said Innes Willox, Chief Executive of the national employer association, the Australian Industry Group.
"Our productivity, which is crucial to our economic success, national prosperity and lifting living standards, has virtually stood still since the mid 2010s.
"Unfortunately, a relatively small fund to encourage states – who have been amongst the worst offenders at stifling productivity – is unlikely to shift the poor policy and regulatory outcomes that have hobbled productivity growth.
"The Treasurer's best intentions are also undermined by poorly targeted policies from across his government that have smothered rather than boosted productivity.
"At the minimum what is required to boost our flagging national productivity are sensible policy settings to cut out duplicative and redundant regulation; the development of an internationally competitive tax regime; measures to encourage investment in research and development; the upgrading of our skills base; and allowances for a more flexible workplace relations system.
"Without those enablers, we are fighting the productivity battle with one hand tied behind our back.
"While details of the fund are still to be finalised, there are already concerns among industry about its focus on product repair, which imposes significant costs on businesses in terms of stocking inventory, as well concerns that it will enhance the ability of non-compliant product to enter Australia.
"It is imperative that this fund actually achieves positive outcomes where it can. We have seen other funds like the National Reconstruction Fund so far struggle to gain any significant traction. Throwing money at our productivity problems is no substitute for actually implementing real policy reforms.
"The Treasurer deserves support for at least starting a long overdue national conversation on the need to boost productivity. He now needs his colleagues at federal and state level to get serious about fixing the problem," Mr Willox said.
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