Australia’s Productivity Commission Calls for Tax and Migration Reforms to Boost the Country’s Productivity

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The Productivity Commission of Australia has issued a call to action for the federal government, urging them to improve the country’s tax and migration systems, eliminate import tariffs, and secure net-zero carbon emissions at an acceptable cost.

The Commission’s report “Advancing Prosperity” makes 71 recommendations to address the country’s decline in productivity growth, which has slowed since the 1970s. 

The report was initially sent to the government on 7 February, following the biennial schedule set by the first Inquiry report Shifting the Dial, completed in 2017. 

“Lifting Australia’s productivity growth will involve a combination of economy-wide and structural reforms, in addition to targeted policies in particular sectors to push Australian industries closer to the global frontier,” said the report.

Adapting the workforce through licensing reform

The recent calls for reform of occupational licensing arrangements have highlighted the need to build a more adaptable workforce. The report urges reducing barriers faced by skilled migrants and expanding the allowable scope of practice within licensed occupations by aligning migration and occupational requirements and improving the regular licensing policy review process. 

“Following on from automatic mutual recognition of occupational licences, several reform directions are proposed to ensure that licensing is not creating undue barriers to the mobility and adaptability of the workforce,” said the report.

Treasurer Jim Chalmers warned that without significant productivity increases, Australians will see a 40 per cent decline in their earnings and an increase of 5 per cent to the workweek by 2063. 

“The Albanese government takes the productivity challenge seriously, which is why we’ve committed to a range of productivity-enhancing investments and reforms,” Chalmers stated.

He added that while only some of the recommendations in the latest report will be pursued, the government’s plans are already broadly in line with its proposed themes.

The Commission’s call comes when Australia faces an economic downturn, but it remains optimistic that its proposed reforms could increase economic productivity and long-term growth.

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