Australia's productivity boom came with unions, not business
Productivity growth hit more than 2 per cent a year in the 1980s and 90s under a government-union partnership. Today it is just 0.3 per cent.
The Business Council of Australia held its annual dinner this week. Government and business leaders said they need to work together to lift the nation's poor productivity.
But there is an awkward truth: Australia's strongest productivity gains came not from business partnership but from government working closely with unions. In the 1980s and 90s, Treasurer Paul Keating and ACTU secretary Bill Kelty partnered on bold reforms.
They opened tariffs, formalised enterprise bargaining, and set superannuation at 12 per cent. That partnership produced annual productivity growth above 2 per cent.
Today it is 0.3 per cent. Last financial year it was minus 0.7 per cent.
- above 2 per cent annually
- Productivity 1980s-90s
- 0.3 per cent
- Current productivity
- minus 0.7 per cent
- Last financial year
- Paul Keating and Bill Kelty
- Key partners
Why it mattersWhat actually worked before matters now. Policymakers choosing which partners to bring to the reform table should know the historical facts about what produced results.
AustraliaAustralia's current productivity crisis means lower wage growth and living standards; the success of the Keating-Kelty model suggests re-engaging unions in economic strategy could shift outcomes.
✓ Claims checked against the source and corrected before publish. checked 45 d ago
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