Productivity and participation are important drivers of Australia's economic growth. The Treasury will advise on policies designed to improve productivity and workforce participation including in relation to: taxation; the economy; the financial system; foreign investment, competition and broader structural policy; social policy, small business; supporting innovation; and international economic policy. As always, policy reform will often have differential impacts on community and industry sectors.
Productivity has always been an important driver of Australia's economic growth and standards of living. Australia's average labour productivity growth over recent years has continued broadly in line with its long run average, but, notwithstanding this, since the peak in the terms of trade in 2011 living standards in Australia have been falling as the rest of the world is paying us less for what we produce.
Beyond the income shock from the fall in the terms of trade, demographic factors are becoming less favourable and are likely to be an increasing drag on growth over the medium to long term. Australians are expected to live longer and do so in better health; however, the proportion of the population participating in the workforce is expected to decline as a result of population ageing. A lower proportion of Australians working will mean lower economic growth in future years.
The adoption of policies that facilitate productivity growth - including policies to increase competition and encourage investment, innovation and the adoption of new technologies and management practices - will be critical for sustained economic growth and growth in living standards. Policies to achieve greater participation in the workforce, in particular for older Australians, will also be important.
The Treasury is well-placed to lead the implementation of the Government's response to the Financial System Inquiry and other reforms to improve the resilience of the financial system and the efficiency of the superannuation system, whilst stimulating innovation and supporting the fair treatment of consumers.
The Treasury will also assist the Government to implement its response to the Competition Policy Review, by providing advice regarding market efficiency and competitiveness. The Treasury will assist the Government in engaging with the States and Territories to advance the reform agenda. This package of reforms at State, Territory and Commonwealth levels will strengthen Australia's long-term economic performance by promoting more dynamic, competitive and well-functioning markets for the benefit of all Australians.
The Treasury will work with the Government and the Foreign Investment Review Board to maintain the right balance between protecting Australia's national interests, ensuring that Australia continues to attract foreign capital and implementing improvements to the foreign investment framework.
The Treasury will continue to implement the Government's regulatory reform agenda and support the reduction of red tape.
The Treasury is leading a Commonwealth, State and Territory review of the Australian Consumer Law that will report to consumer affairs ministers by March 2017.
The Treasury will support the recently established Australian Small Business and Family Enterprise Ombudsman in performing its advocacy and assistance functions for small business.
The Treasury will also provide grants under the Australian Small Business Advisory Services program. The grants will be provided to not-for-profit small business advisory service providers, to improve their capacity to deliver low cost small business advisory, information and referral services.
The Treasury will assess its performance using both qualitative and quantitative indicators, depending on the nature of its roles and functions.
Financial System Inquiry
- The Treasury will provide advice and policy support aimed at promoting a resilient, efficient and innovative financial system that meets the needs of consumers.
- Performance will be assessed based on the delivery of timely and well-informed advice and on progress in implementing the Government's policy priorities.
Competition Policy Review
- The Treasury will provide advice and policy support aimed at promoting competitive and efficient markets that work in the long-term interests of consumers.
- Performance will be assessed based on the delivery of timely and well-informed advice regarding the implementation of the Competition Policy Review and the Government's policy priorities.
- The Treasury will aim to facilitate foreign investment to support economic growth, while ensuring that national interest concerns are appropriately addressed.
- Performance will be assessed using the key performance indicators that have been developed under the Regulator Performance Framework for the Foreign Investment Review Board.
- The Treasury will aim to ensure that decisions are made on the basis of a considered assessment of their regulatory impact, that the regulatory burden in the portfolio is reduced and that portfolio regulators administer regulation in a proportionate way.
- Performance will be assessed by:
- the level of compliance with regulation impact analysis requirements for measures announced during each reporting period;
- the portfolio's contributions to the Government's red tape reduction target and agenda for productivity-enhancing regulatory reforms; and
- portfolio regulators' compliance with their annual Regulator Performance Framework obligations.
Australian Consumer Law Review
- The Treasury will lead the conduct of the Review and the development of a report to Commonwealth, State and Territory consumer affairs ministers by March 2017.
- Performance will be assessed on the timely delivery of a report that makes findings and identifies options to improve the efficiency and effectiveness of the Australian Consumer Law.
- The Treasury will provide advice on policy settings to support a competitive and efficient small business sector.
- Performance will be assessed based on the delivery of timely and well-informed advice and broad consultation with stakeholders.
Australian Small Business Advisory Services (ASBAS)
- The Treasury will aim to ensure that not-for-profit small business service providers deliver high-quality, affordable services to small businesses.
- Performance will be assessed by the level of appropriate assistance provided to enterprising people through the ASBAS program. For 2016-17, there is a target of providing 25,000 additional services to enterprising people through the ASBAS program.