Australian living standards under threat:PM

Rising living standards in Australia are threatened by the country’s relatively poor productivity performance, according to the Prime Minister Kevin Rudd.

“Between 1994 and 1999, Australia’s productivity growth rate was second among OECD countries,” Mr Rudd told economists in Melbourne.

But it had since slowed since then and Australia now occupies 14th place.

“If we do not act now to lift Australia’s productivity growth rate, the nation’s  average living standards will decline,” Mr Rudd warned.

He said poor productivity is reflected in Australia’s slow and expensive access to the internet, clogged cities, inefficient ports, poor roads and outdated railways.

The Prime Minister  said his government would always pursue the twin goals of economic stability and long term growth.

That’s why 65 per cent of its stimulus spending, in the wake of the global economic crisis, had been allocated to investment in national infrastructure.

But there were still real challenges ahead.

With Australia’s population ageing rapidly, workforce participation rates would fall in the years ahead.

In 1970, there were 7.5 people of working age to support every person over the age of 65, Mr Rudd said.

“Today there are five.

‘By 2050 there will be just 2.7 people of working age to pay taxes for every person over the age of 65.”

“These are dramatic changes,” Mr Rudd said.

He warned, too, that health reform is not just a policy imperative, in  these circumstances.

“Health reform, equally, is an economic policy imperative.”

Mr Rudd said his government is working to produce both an economic and a skills revolution, to help meet these challenges.
“Without productivity growth, we do not have sustainable,long term economic growth,” Mr Rudd warned.

And Australia would then have no long term basis for improvements in its living standards.