The scale of the expansion in mining and energy makes it difficult to assess the long-run prospects of Australia’s broader economy. Drawing on expertise from 20 years of productivity studies, this report develops a new analytical framework that acknowledges the complex structural shifts under way. It emphasises the distinct roles of capital and labour, and separates the terms of trade from output. The report discusses scenarios for future growth, finding that concerted action to boost productivity could deliver up to A$90 billion in additional income by 2017. But it also cautions that if productivity growth doesn’t recover, there is a risk that Australia could experience little or no income growth in the future.
