“Regulatory hairballs” have clogged Australia’s economy and deprived young people of a better living standard than their parents, the chair of the Productivity Commission believes.
The generational bargain is in peril, says Danielle Wood.
“Young people today believe they won’t live better lives than their parents did,” the head of the nation’s economic think tank will say at the National Press Club on Monday.
“I’m worried too.”
Australians born in the 1990s were the first generation not to earn more than those in the decade before them.
Now in their 30s, millennials are struggling to enter the property market “as policy choices have contributed to house prices growing much faster than incomes for the best part of three decades”.
Ms Wood, due to speak before the federal government’s economic reform roundtable on Tuesday, says the challenges facing younger generations amount to productivity problems.
About squeezing more from less, productivity allows wages to grow and helps “build things better and faster”, such as homes and clean energy infrastructure.
The commission has already spelled out a long list of recommendations to kickstart anaemic productivity growth in five separate reports released before the roundtable.
Suggestions include reforming the corporate tax system and financial incentives for workplace training.
Ms Wood will also call for an attitude shift at the highest levels of government policymaking and delivery.
“This ‘growth mindset’ – an elevation of growth and the benefits it brings – has been missing from Australian policy for far too long,” she said.
She will point to the “growth of the regulatory burden” as symptomatic of a policy culture failing to prioritise growth.
“Regulatory hairballs” are everywhere, she will argue, from 31-step approvals and licensing surveys for would-be Queensland cafe owners to “evermore stringent requirements for energy efficiency in the construction code”.
The Albanese government has lobbed its fair share of hairballs down Australia’s regulatory gullet, contends opposition productivity spokesman Andrew Bragg.
In its first term, Labor introduced 5034 new regulations and 400 new laws, raising the cost of compliance by $4.8 billion, according to Office of Impact Analysis figures cited by Senator Bragg.
“Australia is now one of the most heavily regulated countries in the world,” he said.
Treasurer Jim Chalmers rubbished the claims, arguing the coalition introduced more regulations in its last term before its 2022 election loss.
“If the coalition had answers on productivity, they wouldn’t have presided over the worst decade for productivity growth in the last 60 years,” he said.
Dr Chalmers acknowledged the government had been getting in its own way with regulation that was slowing down new housing or energy projects.
Some regulation, such as tying government procurement to gender equality aims, was serving a useful purpose, he said.
“Where regulation is unnecessary, where it’s duplicated, where it’s not serving a useful purpose, we should seek to wind it back, and that’s what we intend to do.”
Australia’s key economic stakeholders will gather in Canberra to propose solutions to the nation’s ailing productivity as part of the government’s hotly anticipated roundtable.
Almost 30 groups representing farmers, pharmacies, universities and small, medium and large businesses have urged the government to reduce red tape and reform taxes without raising costs.
Lifting the amount businesses invest in capital like new technology will be key to turning around productivity growth.
“The test for everything this week, every proposal, is very simple: will it increase business investment or will it reduce business investment,” said Business Council of Australia chief executive Bran Black.
Environment groups have also urged the government to address concerns such as nature law reforms.
“Nature’s economic role is too important to leave out of national reform conversations,” Australian Land Conservation Alliance chief executive Jody Gunn said.
“If we invest in the solutions it brings, we all win.”
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