Annual report 1997-98

The Government today released the first annual report of the Productivity Commission.

“The Commission has been launched at a time of vigorous debate about the most appropriate policy directions for Australia” said the new Commission’s Chairman, Gary Banks.

“Our job is to ensure that public debate is informed by an understanding of what different policy choices mean for Australia’s productivity and living standards. The Commission’s current inquiries into the regional effects of national competition policy and the economic and social impacts of the gambling industry are examples of this informational role.”

In its report, the Commission cautions that concerns within the community about the effects of change, and a natural desire for greater security, could end up derailing reforms which are to the overall benefit of the Australian community. The report looks at why Australian governments have undertaken microeconomic reform, what is known about the benefits and ways of dealing with adjustment problems.

“While resistance to change is understandable, the real consequence of slowing or stopping reform would be a gradual decline in the relative living standards of Australians. There would be lower growth in per capita incomes and a reduced capacity to fund social expenditures on health and education and to care for those most in need” the Commission said.

“Ultimately, it is only by being more productive and competitive that Australians can achieve real security in their workplaces and regions. Like other countries, Australia faces continuous change and must continue to adapt if living standards are to improve.”

The Commission acknowledges that the reforms needed for our economy to rise to the challenges and opportunities of global change will inevitably involve losses for some groups in the short term.

“The challenge for society is to handle this process such that socially beneficial reforms can still proceed. Governments have a key role to play in facilitating adjustment so as to reduce unnecessary costs in the transition and to help people adjust to change.”