Wayne Swan fights back – on productivity

High levels of investment are laying the base for a recovery in Australia’s productivity growth, the Federal Treasurer, Wayne Swan says.

Mr Swan bluntly also challenged the government’s critics, on productivity, in a speech he gave to foreign investors in Canberra.

“Now, I agree with everyone who says we should be doing better on productivity, and that our success as an economy depends on it,” Mr Swan said.

“I also agree that there has been a broad-based decline in productivity growth over many years.”

He said  this, in part, “reflects the waning impact of economic reforms of the 1980s and 1990s and the lack of productivity-enhancing reforms over the decade that followed.”

Then he attacked economists who have criticized the Federal government’s record on productivity

“But what I can’t agree with is those who say productivity is currently in decline,’ Mr Swan said.

That “simply isn’t borne out by the facts.

“The fact is we’ve seen a lift in productivity over the past year, with labour productivity in the market sector growing by 5.3 per cent,” Mr Swan said.

” This is not only the largest annual increase seen in a decade, but it is well above the 10-year annual average growth in labour productivity in the market sector of 1.5 per cent,” he added.

The Treasurer said, too, that the present – very high – levels of investment in Australia would increase the nation’s productive capacity in the years ahead.

“What often gets lost in the current debate about the mining boom is that the investment gathering pace is boosting the productive capacity of our economy.

“Take, for example, new engineering construction – which has increased by a staggering 154 per cent since the Government came to office.

“This investment is helping to build mines, ports, and important infrastructure that will deliver dividends for many years,” Mr Swan said.