Over the years, I have written a plethora of articles on MB, warning that Australia is stuck in a low-productivity trap driven by four main factors:
- Poor private business investment, combined with excessive low-skilled migration, has shallowed the nation’s capital base.
- Expensive energy costs (gas and electricity prices) have deindustrialised the nation, resulting in Australia’s manufacturing share shrinking to the smallest in the OECD relative to GDP.
- The rapid expansion of non-market (government-funded) jobs, related mostly to the expansion of the NDIS, has dragged overall productivity growth lower.
- Australia’s productivity has suffered from an increasing share of our economic output being channelled into non-productive housing.
Mark the Graph posted an excellent analysis that reached similar conclusions and added a few other factors into the mix.
