Australia’s economy has performed strongly in recent decades enjoying robust growth in incomes and living standards following 28 years of consecutive economic growth interrupted by the COVID-19 pandemic. Australia’s economic recovery from the pandemic has been world leading however to ensure Australians continue to enjoy higher living standards, we need to continue to focus on the task of lifting productivity.

Productivity growth is vital for Australia’s future, particularly as the Australian and global economies emerge and begin to recover from the economic impacts of COVID-19. The 2021 Intergenerational Report makes it clear that future growth in income and living standards will be driven from productivity growth as the participation effects of young migration are offset by an ageing population. Global and domestic productivity growth in recent decades however has slowed. Changes brought about by the COVID-19 pandemic and the global and domestic policy responses will also provide a unique historical context for this Review.

Building an adaptable workforce: education 71

Building an adaptable workforce: migration 79

Building an adaptable workforce: occupational licensing 81

Building an adaptable workforce: workplace relations and platform work 84

Harnessing data, digital technology and diffusion 87

Creating a more dynamic economy 92

Lifting productivity in the non-market sector 97

Securing net zero and adapting to a changing climate at least cost 100

Reflecting these priorities, this report, complemented by its other volumes, is organised around five key reform pillars:

1. Building an adaptable workforce to supply the skilled workers for Australia’s future economy, through education reform, skilled migration and modern, fit-for-purpose labour market regulations.

2. Harnessing data, digital technology and diffusion to capture the dividend of new ideas, focused particularly on the adoption of ideas by the 98% of businesses who are not cutting-edge innovators.

3. Creating a more dynamic economy through fostering competition, efficiency and contestability in markets, through a range of levers — from competition policy and sector specific regulation to broad enablers of business entry and investment.

4. Lifting productivity in the non-market sector to deliver high quality services at the lowest cost, by changing incentives and culture.

5. Securing net-zero at least cost to limit the productivity impact caused by climate change, including by fostering efficient adaptation to a changing climate.