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Promoting economic dynamism, competition and business formation

Productivity Commission submission

The Productivity Commission provided a submission to the House of Representatives Standing Committee on Economics Inquiry into promoting economic dynamism, competition and business formation.

The submission considers recent trends in key indicators of dynamism — firm entry and exit, concentration, price-markups, labour market mobility and investment, and notes that the current discourse generally points to movements in these indicators as an important explanator of Australia’s and other OECD countries’ aggregate productivity and wage slowdown.

This submission offers a slightly more nuanced view of recent trends and demonstrates that there may be other interpretations of recent trends in some of the indicators, which would have neutral, or positive, effects on productivity. It concludes by noting that policies should not focus on changing the indicators of dynamism, but rather on the fundamental mechanisms amenable to government action that underpin dynamism and productivity growth.

The Commission provided the submission to the inquiry on 31 March 2023 and was published on the Commission's website on 6 April 2023.

The Commission also provided supplementary information to the inquiry regarding matters raised during public hearing proceedings.

Download the submission

Download the supplement