OUTLOOK, JULY 2 0 1 7 Peter Harris Productivity Com m ission - - PowerPoint PPT Presentation

Productivity Commission 1

Peter Harris Productivity Com m ission

OUTLOOK, JULY 2 0 1 7

Productivity Commission 2

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Topic title

Productivity Commission 3

Contributions to incom e grow th

Data source: ABS 2016, Australian System of National Accounts, 2015–16, Cat. no. 5204.0, December, and Productivity Commission estimates.

Gross national incom e per capita

• 3.0
• 2.0
• 1.0

0.0 1.0 2.0 3.0 4.0 1960s 1970s 1980s 1990s 2000s to 2012 2012-16 PPT contribution, annual average Labour productivity Labour utilisation Terms of trade Foreign income flows GNI per person

Productivity Commission 4

Mining and non-m ining investm ent activity

I nvestm ent to GDP

Notes: Investment to GDP refers to real gross fixed capital formation to real gross domestic product. Data source: ABS 2016, Australian System of National Accounts, 2015–16, Cat. no. 5204.0, December, and Productivity Commission estimates.

Productivity Commission 5

Non-m ining investm ent grow th

Non-m ining investm ent volum es ( LHS) and grow th ( RHS)

Note: Investment is real gross fixed capital formation, and growth is a simple five-year period end moving average. Data source: ABS 2016, Australian System of National Accounts, 2015–16, Cat. no. 5204.0, December, and Productivity Commission estimates.

Productivity Commission 6

W here to start….

• A right to return, in education
• A serious spring clean of urban planning
• Address disease prevention as directly as we

address workplace accidents

• Change the early retirement paradigm
• Data, the new resource discovery
• Stop creating new barriers to trade and labour

mobility

Productivity Commission 7

Australia’s OECD econom ic ranking

1 3 5 7 9 11 13 15 17 1950 1954 1958 1962 1966 1970 1974 1978 1982 1986 1990 1994 1998 2002 2006 2010 2014 Ranking

Australia ranked 5th in 1950 Australia ranked 15th in 1983 Australia ranked 5th in 2014

Real GDP per capita in 1 9 9 0 US$ ( converted at Geary Kham is PPPs) , OECD countries

Source: The Conference Board Total Economy Database™, May 2015, http: / / www.conference-board.org/ data/ economydatabase/ ; ABS (Australian System of National Accounts, 2014-15, Cat. no. 5204.0, October 2015).

Productivity Commission 8

A m ore open econom y

Trade intensity ( 1 9 7 0 -2 0 1 5 ) a

a Refers to nominal exports plus imports divided by nominal GDP.

Source: ABS Cat. nos 5302.0, 5206.0

20 25 30 35 40 45 50 1970-71 1974-75 1978-79 1982-83 1986-87 1990-91 1994-95 1998-99 2002-03 2006-07 2010-11 2014-15 per cent

1973 25 per cent across the board tariff 1987 Commenced phasing out of TCF quotas 1993 TCF quotas end 2010 Maximum PMV tariff set at 5 per cent 2015 Maximum TCF tariff set at 5 per cent

Productivity Commission 9

NOTE: The shaded bars indicate periods of global recession defined as 55 per cent of world gross domestic product in recession. SOURCE: World Development Indicators, World Bank; recession data are from Economic Cycle Research Institute (ECRI).

Productivity Commission 1 0

Household incom e has im proved significantly

Labour productivity and real household incom e a

80 90 100 110 120 130 140 150 160 170 1986 1990 1994 1998 2002 2006 2010 2014 Real unit labour costs Labour productivity Average household income

Compound annual growth rates (1986 to 2015): RULC

• 0.5% pa

LP +1.6% pa HH Income +1.7% pa

a Labour productivity is calculated as real gross domestic product per hour worked. Real

household income is expressed as real gross national income per capita, per household based on Census data on average household size. Data source: ABS Cat. No. 5204, Table 1, 6 & 72, ABS Cat. No. 6202.0, Table 6.

Productivity Commission 1 1

Mism atch betw een life expectancy and retirem ent policy

People are living longer, but not increasing the time spent in the workforce

43.2 42.6 43.8 44.4 44.9 45.4 13.2 20.0 23.9 27.7 30.7 32.6 20 40 60 80 100 Oldest Gen (1901-1925) Silent Gen 1926-1945 Baby Boomers 1946-1965 Gen X&Y 1966-1985 iGeneration 1986-2005 GenWhats 2006-2060 Life expectancy after 15 (years) Average years in labour force Average years outside labour force 56.4 62.4 67.7 72.2 75.6 77.9

Rounding errors means numbers may not exactly sum