Interim Report 6

Released 13 / 10 / 2022

Productivity growth is about harnessing our ingenuity to do more with the resources we already have — working smarter, not harder — and investing in the latest technology and the best ideas.

The Productivity Inquiry focuses on the enablers of productivity growth in a modern, market-based, service-oriented world. The sixth and last interim report explores how a well-functioning labour market is critical to productivity growth and social wellbeing.

You were invited to examine the interim report and to make written submissions by 21 October 2022.

Please note: This interim report is for research purposes only. For final outcomes of this inquiry refer to the inquiry report.

Download the interim report

People at heart of productivity

The Productivity Commission’s sixth interim report in its 5-year Productivity Inquiry investigates how workers can boost the nation’s productivity.

“This report explores how we might make our business environment more adaptable and flexible, no matter what the future of work looks like or what skills composition we might need,” Productivity Commission Deputy Chair, Dr Alex Robson said.

“The focus needs to be on matching the right people with the right job, and improving and increasing our pool of skills,” he said.

There are also barriers that prevent or delay matching skills to labour market needs. For example, there are highly skilled occupations where people still have to apply for a new licence if they want to work in another state and it can be unnecessarily difficult for skilled migrants to have their qualifications recognised.

“The composition of Australia’s skilled migration intake is a key determinant of productivity growth. Employers should have greater capacity to directly employ migrants with high level skills,” Commissioner Lisa Gropp said.

The emergence of the gig economy has been a major disruptor to traditional employment models. Platform-based business models present a number of positive contributions to productivity, including new and more efficiently delivered services.

“Trying to force platform work into existing categories of employment, could put those benefits at risk. At the same time, we have to make sure workers and consumers are protected,” Dr Robson said.

“We have relied on some key policies to manage and grow the productivity of our workforce and the question is whether they are still fit for purpose or whether there are reforms that would bring about substantial gains,” he said.

The report examines whether we can effectively reduce the complexity of our workplace relations system and remove barriers and red tape that slow down innovation and prevent full utilisation of skills.

“Simplifying the Award and enterprise bargaining systems could benefit all Australians. Enterprise Agreements and the bargaining process are often not focused on making genuine productivity improvements — as the system was originally intended. The need to revisit enterprise bargaining is highlighted by the fact that 56 per cent of employees covered by an agreement are on an expired EA,” Commissioner Lisa Gropp said.

A full copy of 5-year Productivity Inquiry: A more productive labour market, is available at the Commission’s website: www.pc.gov.au. Submissions close 21 October 2022.