Five pillars of productivity inquiries
Meeting the productivity challenge
Released 19 / 12 / 2025
Across the five productivity inquiries, we have made 47 reform recommendations aimed at making the most of new technology, boosting investment and ensuring regulation strikes the right balance between benefits and trade-offs, to improve productivity growth and enhance overall wellbeing.
Our reform priorities are summarised in Meeting the productivity challenge, which sets out our reform principles, highlights some anticipated benefits, lists all recommendations and provides an implementation timeline.
Download the reform priorities
Meeting the productivity challenge (PDF 3.0 MB)Meeting the productivity challenge – final reports out now
The government has today released the final reports of the Productivity Commission's five pillars of productivity inquiries – containing 47 recommendations to support productivity growth across five key areas of the economy.
‘Australia's productivity growth has stalled since 2016. We need to get productivity moving to ensure future generations can live better and more prosperous lives than those that came before them,’ said Productivity Commission Chair Danielle Wood.
‘Our final suite of recommendations, if fully implemented, would add billions to the economy, benefiting workers, households and businesses today and into the future.’
‘No single policy reform can bring productivity growth back to its long-term average – governments will have to make a lot of pro-productivity decisions that support and reinforce each other.’
Creating a more dynamic and resilient economy
‘Reforming our company tax system and reducing the burden of regulation are two of the best ways to inject more dynamism and investment into our economy,’ said PC Deputy Chair Dr Alex Robson.
The report recommends moving to a hybrid corporate tax system, combining a lower company income tax of 20% for small and medium businesses earning up to $1bn, and a tax rate of 28% for larger firms, with a net cashflow tax of 5% for all companies. This reformed tax system would increase GDP by just over $13 billion (0.7%).
‘Having modelled and refined this proposal further since our interim report, we are confident it is the best revenue-neutral option for improving investment,’ said Dr Robson.
‘We have also modelled and explored alternative corporate tax reforms that would boost investment but come at a cost to the budget if not paired with other revenue measures.’
The report also recommends the Australian Government make regulatory reform a key priority with an ambitious whole of government agenda, including major reforms targeting a $10bn reduction in regulatory burden.
‘Poorly designed or implemented regulation is a handbrake on growth. We need regulatory policy that better balances the benefits and trade-offs when considering new regulation,’ said Dr Robson.
Building a skilled and adaptable workforce
‘The government should help build solid foundational skills, smooth pathways to upskilling and make it easier for workers to enter new occupations,’ said Dr Robson.
The report, Building a skilled and adaptable workforce, recommends measures like improving access to high-quality teaching resources (instructional materials, edtech and professional development), which would both support teachers and ensure more students receive high-quality teaching.
It also recommends actions to make it easier for students and workers to access learning and build their skills over time, and replacing excessive occupational entry regulations with more efficient alternatives.
Harnessing data and digital technologies
‘New ideas are the most important driver of productivity growth. Our policy settings should foster innovation and spread it across the economy,’ said Dr Robson.
The report, Harnessing data and digital technologies, recommends an approach to regulating AI based on finding and fixing gaps in current regulations that would help us make the most of what is potentially a $116 billion productivity opportunity over the next decade. It also recommends reforms that would help people access and share data that relates to them.
Delivering quality care more efficiently
‘Governments can lift productivity by breaking through the siloed approach to decision-making in the care economy and improving the quality and efficiency of the services it provides,’ said Ms Wood.
Recommendations in Delivering quality care more efficiently include greater investment in prevention and early intervention, which would keep us healthier for longer while limiting future growth in the costs of care. Investing $1.5 billion over the first five years of a proposed National Prevention Investment Framework could return savings to government of around $2.7 billion 10 years after the initial investment.
Investing in cheaper, cleaner energy and the net zero transformation
‘Achieving net zero at least cost and adapting to the effects of climate change are central to our productivity challenge,’ said Ms Wood.
Recommendations in Investing in cheaper, cleaner energy and the net zero transformation include introducing a national emissions-reduction policy for the electricity sector. Taking a technology- and jurisdiction-neutral approach to the location of new generation and storage infrastructure in the National Electricity Market could save around $8 billion over the next 15 years, without compromising the achievement of state renewable energy targets.
The five reports and an introductory paper, Meeting the productivity challenge, are now available on the Productivity Commission website.
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