Australian productivity needs shot in the arm, business lobby groups tells re-elected Labor Government

Business group have called on the re-elected Federal Labor Government to arrest Australia’s falling productivity and cut the regulation slowing investment. As business grapples with the smashing of its traditional Liberal allies, they are calling on Anthony Albanese to use his second second term to implement a strong agenda to get the economy moving. Australian Chamber of Commerce and Industry chief executive Andrew McKellar said business wanted to work with the Federal Government on productivity, energy costs and reliability, and a reduction in the over-regulation of business. “We also need to make it easier for businesses to employ more Australians to create more jobs, more investment opportunities and grow the economy,” he said. After productivity barely was mentioned in the campaign, business groups welcomed Federal Treasurer Jim Chalmers promising in a post-election interview to focus on boosting economic efficiency. Dr Chalmers, pictured above, said Labor’s first term was “primarily inflation without forgetting productivity”, while the focus would be on “productivity without forgetting inflation” over the next three years. He pointed to Productivity Commission reviews he ordered in December on topics including building a more skilled and adaptable workforce, creating a dynamic and resilient economy, and investing in cheaper, cleaner energy. Productivity Commission reports are due mid-year, with a final raft of recommendations to be sent to the Federal Government by year’s end. Wesfarmers managing director Rob Scott said he was pleased by the Treasurer’s renewed focus on productivity. “This will be critical to address economic challenges, help Australia navigate global uncertainties and build a prosperous, more sustainable future for all Australians,” he said. Australian Industry Group chief executive Innes Willox said he hoped the Labor team “would take a more positive approach towards productivity enhancing reform” after being cautious in its first three years in government. “Our tax system is crying out for real reform and we need a connected and coherent skills system which future proofs the workforce,” Mr Willox said. “This is the toughest time in a generation to be a business.” In what business groups argue is a major threat to investment and economic growth, the Albanese Government put in place laws to return multiple workplace bargaining rights to unions and to stop businesses paying labour hire workers less than directly-employed staff. Rio Tinto chief executive Jakob Stausholm, pictured, last week warned of the risks of the return to a 1980s industrial relations environment. “It could damage a very, very successful industry for Australia,” he said. Speaking after Labor’s win, Chambers of Minerals and Energy WA chief executive Rebecca Tomkinson, pictured, said industrial relations changes “had broken the crucial connection between productivity and wages growth”. While Labor policies such as the Green Iron Investment Fund and Future Made in Australia were welcome, Ms Tomkinson they could not compensate for poor fundamentals such as high energy prices, drawn-out project assessments and uncompetitive corporate tax settings. “WA has an abundance of the minerals and energy the world needs to navigate both the energy transition and rising geopolitical instability,” she said. “But we’re not the only place that produces commodities like iron ore, LNG and rare earths “Investors have options. As a nation, we need to start acting like we’re serious about competing for their capital.” Mr McKellar said he wanted the Government to develop an “ambitious agenda” to boost productivity. “If you don’t have an agenda for productivity, then you don’t have an agenda for real wage growth,” he told Sky News Business.