Treasurer Jim Chalmers is set to lay out his key priorities for reform as he confronts “intensifying pressures” on the economy.
Fixing the nation’s stagnating productivity and turning around the budget’s outlook amid forecast deficits as far as the eye can see are topping his list.
As the economy records anaemic growth, Dr Chalmers on Wednesday will push for the nation to recognise “three blunt truths” standing in the way of higher living standards.
“Our budget is stronger, but not yet sustainable enough,” he will tell the National Press Club in Canberra.
“Our economy is growing, but not productive enough.
“It’s resilient, but not resilient enough – in the face of all this global economic volatility.”
Dr Chalmers is vowing to ensure Labor’s second term is consistent with those priorities.
And despite the progress made on getting inflation back within the Reserve Bank’s target band, the treasurer will say there’s still more to do.
Dr Chalmers will identify productivity as the government’s primary focus.
“Our economy is not dynamic or innovative enough,” he will say.
“Private investment has picked up, but not by enough to make our capital deep enough.
“Skills aren’t abundant enough or matched well enough to business needs.”
On the government’s productivity roundtable in August, the treasurer will say it won’t be a move to “retract or retrace” the steps taken in the first term, but an effort to renew and refresh.
Weak productivity growth is a major problem for advanced economies around the world.
“Too often it’s seen as a cold, almost soulless concept when it’s really the best way of making people better off over time, creating more opportunities, making our economy and our society more dynamic,” the treasurer will say.
In Australia, labour productivity has stagnated since the COVID-19 pandemic.
The latest GDP figures released earlier in June showed a fall in the year to March.
The 2022 election coincided with the largest quarterly fall in productivity growth in almost half a century, the treasurer will say.
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