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Productivity surge

11 March 2002 - Unexpected sectors of the services industry are driving the recent improvement in Australian industry productivity, said Productivity Commission Chairman, Gary Banks at the OUTLOOK 2002 conference in Canberra last week.

'The real surge originated from some new and unexpected contributors in the services sector, especially wholesale trade, finance and construction,' Mr Banks said.

'Microeconomic policy reforms also contributed by sharpening incentives to be more productive and providing greater flexibility for businesses to adjust to a more competitive environment,' he said.

According to Gary Banks, Australia has been advantaged by the country's quick uptake of information and communications technologies during the 1990s. This has contributed to growth, but it will also enable future productivity gains in the services sector in addition to 'traditional' industry contributors, such as agriculture, mining and manufacturing.

Harry Colebourn, Manager, Network Pricing and Marketing for Energy Australia, agreed with Gary Banks, adding, 'historically, there has been a progressive improvement in the productivity of the energy supply industry.' But he also pointed to a number of challenges as well as regulatory design issues for the energy market in Australia, following the structural changes.

David Barker, Australia Post's HR Group Manager said that Australia Post was an example of an organisation that has shown substantial productivity increases in recent years.

'Australia Post has achieved cumulative productivity growth of 67 per cent over the last decade. One of the key drivers of this growth has been a change in organisational culture including giving the workforce an ownership of the reform process,' he said.

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