RBA’s Lowe says productivity still a problem

Australia has proven resilient through an uncomfortable rebalancing phase, but the economy is still plagued by disappointing productivity growth, deputy governor says
Philip Lowe: "No shortage of ideas"

Australia has done a "pretty good job" of adjusting to the aftermath of its mining boom, but productivity growth continues to disappoint, deputy governor Philip Lowe told a conference today (March 8).

Real disposable income per head stalled and went into reverse in recent years, and is now no higher than it was in 2008, Lowe said during remarks in Adelaide.

It is "more than coincidental" the decline in productivity has come at a time when the federal budget is being squeezed, uncertainty is high, and both wages and profits are growing more slowly, he added.

The deputy governor reassured his audience "there is no shortage of ideas" as to how to restore productivity growth. Reforms to competition, better infrastructure, incentives to support entrepreneurship and investment in high-quality education would all help, he said.

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