08 November 2019
The NSW Productivity Commission (Commission) has released its ‘Kickstarting the productivity conversation’ discussion paper for consultation, closing 27 November 2019.
The feedback received will inform whether the correct productivity priorities have been identified, and the policy options the NSW Government needs to consider.
Productivity growth has slowed globally since the early 2000’s. The State’s productivity growth averaged 2.8 per cent per year from 1994-95 to 1998-99, compared with just 0.8 per cent between 2003-04 and 2011-12.
The recent average productivity growth has been 0.9 per cent per year. If the NSW economy continues to grow at this rate rather than 1.5 per cent per year forecast in the 2016 NSW Intergenerational Report, the State’s economy will be smaller by up to $24,000 per person by 2055-56.
NSW government revenues are dependent on strong productivity growth. However, labour force participation is expected to fall due to an ageing population, placing further strain on productivity.
As the traditional levers of economic growth reach their limit, the NSW government needs to prioritise its productivity goals now to create a strong foundation for future economic growth.
The Commission has identified six priority areas with the potential to boost productivity in NSW. Importantly, these priority areas reflect the need for policy decisions that make more effective use of NSW’s existing capital, labour and natural resources.
The aim is to remove unnecessary regulatory requirements on the use of private sector assets to encourage entrepreneurship, and make it easier for people to do business.
The priority areas are:
The discussion paper presents an important opportunity to generate meaningful conversation about the six draft priority areas and the reform needed to galvanise change. However, the Commission has made it clear that the six areas are ‘not exhaustive’, and that it is open to further suggestions for consideration.
To help interested stakeholders make submissions, the paper provides key discussion questions. These include:
Submissions on the NSW Productivity Commission’s discussion paper close on 27 November 2019. A link to the discussion paper can be found here.
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