Productivity is the single most important determinant of economic growth and living standards in the long-term. Higher productivity increases household incomes. It means our businesses are more efficient and competitive on a global stage. As productivity growth slows globally, the need for governments to make good policy choices is accentuated.
While our productivity performance in recent years is in line with historical average, there remains a longer-term need to boost productivity to support living standards given the lower terms of trade and the ageing population. There is also an ongoing need to ensure well-functioning markets to help support productive development and assist governments to address economic challenges.
The Treasury will work on initiatives which seek to enhance productivity and ensure well-functioning markets, including in the areas of innovation, infrastructure, competition, trade and investment, and financial services. This work will be informed by the first of the Productivity Commission’s five yearly inquiries into Australia’s productivity performance.
To aid this work, the Treasury created a new Structural Reform Group in early 2017 to lead work on supporting growth and improvements to living standards in Australia, with a focus on boosting productivity and improving outcomes for Australians through microeconomic and structural reform. The Treasury will also continue to support the work of the Takeovers Panel in ensuring an efficient, competitive and informed market for corporate control; and the Australian Small Business and Family Enterprise Ombudsman in providing assistance to and advocating for small business and family enterprise. This includes work on the treatment of small business loans, business payment times and practices, small business investment and government procurement.
- Encourage innovative thinking on opportunities arising from structural change and digital disruption.
- Lead the implementation of the Government’s financial sector reform agenda and advise the Government on the financial system.
- Facilitate foreign investment to support economic growth, while ensuring that national interest concerns are appropriately addressed.
- Provide advice and policy support to enhance the efficiency and competitive operation of markets to work in the long-term interests of consumers, including through access and use of data.
- Support the implementation of policies designed to raise productivity, in particular reducing the tax burden on corporate and small businesses, and improving the overall efficiency of the tax system.
- Provide advice on policies to improve industry and regional productivity.
- Provide advice on policies to promote the fair and efficient operation of the labour market.
- Provide advice on efficient regulation, where it is required.
- Assist the Government to engage with the States and Territories to advance economic and productivity enhancing reforms particularly as they relate to small business.
- Support the Government in its consideration of proposals from the Australian Consumer Law Review.
- Work with the Government to consider small business issues and assist to enhance the capability of small business advisory service providers through the Australian Small Business Advisory Services program.
- Provide actuarial and related policy advice primarily to Australian Government departments and agencies to assist them to quantify risks and make informed decisions.
- Establish a National Housing Finance and Investment Corporation and negotiate a new National Housing and Homelessness Agreement with the State and Territory Governments by 1 July 2018.
Key milestones and compliance requirements met for the implementation of the Government’s financial sector reform agenda.
Economic and productivity enhancing reforms are developed and progressed. Performance will be measured by long term productivity trends.
Progress of the Government’s regulatory reform agenda. Performance will be measured by compliance with the regulatory impact analysis requirements; reduction of portfolio red tape on a net basis; and portfolio regulators’ compliance with their Regulator Performance Framework requirements.
Advice to facilitate foreign investment to support economic growth will be high quality and address national interest concerns. Performance will be measured by the Regulator Performance Framework key performance indicators.
Tax and foreign investment measures are implemented in accordance with the Government’s plan to reduce pressure on housing affordability promptly; measured by the achievement of agreed progress milestones.