CPA Australia reveals the nation’s productivity crisis is becoming a serious threat to economic growth, competitiveness and living standards.
In a submission to the Select Committee on Productivity in Australia, CPA warns that Australia’s prolonged productivity slump can no longer be treated as a “slow-burn problem”.
CPA’s submission draws on recent work with the Australian Government and the Productivity Commission. It argues that there is no quick fix and requires sustained, coordinated reform across tax, regulation, fiscal policy and business capability.
The submission identifies comprehensive tax reform as fundamental if Australia is serious about lifting productivity.
Business and Investment Lead Gavan Ord says Australia is running out of time and if productivity continues to stagnate, living standards will go backwards and the economy will struggle to sustain growth.
“This is not an abstract policy debate. Weak productivity ultimately means lower wages growth and fewer opportunities for Australian businesses and workers,” Ord says.
“Our tax system is increasingly complex, uncompetitive and misaligned with where the economy is heading. Continuing to avoid meaningful tax reform is a deliberate choice to accept weaker productivity and slower growth.”
CPA Australia also warns that regulatory overload is imposing significant and growing costs on businesses, particularly small businesses.
Lagging technology adoption
The accounting body also points to Australia’s lagging technology adoption, especially among small businesses, and the need for better targeted support.
As Mining.com.au reported, the Minerals Council of Australia outlines in its Commodity Demand Outlook 2030 report, how the technology-led productivity growth that has lifted incomes and improved living standards of millions of people in highly populated economies will be a driving force of higher commodity consumption.
McKinsey & Company’s 2023 report Mining’s Digital Revolution shows those implementing AI-driven operations have achieved 20-25% improvement in workforce productivity; 10-15% reduction in maintenance costs; 15-20% decrease in equipment downtime.
Sharing similar sentiments, PwC’s Energy, Utilities & Resources Industry Leader Kerry Bradshaw says productivity is one of the core drivers around the world with miners now focusing on capex and opex, including optimising operations and maximising efficiencies.
As Bradshaw told Mining.com.au, that in itself drives a significant amount of change in overall portfolios.
“At the end of the day, productivity is absolutely sitting at the core. Part of that is actually being enabled by AI,” she explained.
Boosting young entrepreneurs
The submission also calls for urgent action to boost young entrepreneurship, noting that Australia has too few young business owners relative to its population.
As previously reported, MPI Recruitment says Gen Z is increasingly turning away from the mining sector.
“The generation born between 1997 and 2012 is actively turning its back on mining.”
A 2023 McKinsey report also echoes this trend, showing a 63% decline in Australian mining graduates from 2014 to 2020; similarly, the US saw a 39% decline from 2016 to 2020.
MPI Recruitment’s recent survey revealed the main motivators behind why workers are leaving the mining industry or changing jobs.
With job vacancies everywhere and projects slipping, the industry tends to go with the convenient scapegoat of a talent shortage. However, MPI Recruitment says that the 217 mining industry employees surveyed tell a different story, as reported.
According to MPI Recruitment, 86% of Australia’s mining workers are movable, with only 14% ‘empathetically’ planning to stay put in 2026.
Out of the 217 employees surveyed, 66% prioritise leadership and culture, while only 6% care mostly about pay.
Write to Aaliyah Rogan at Mining.com.au
Images: CPA Australia
