Migration, workplace reforms urged to boost productivity levels

Warning: Longer work hours, lower incomes on the horizon if productivity stalls

Migration, workplace reforms urged to boost productivity levels

To boost productivity, Australia must introduce reforms to its migration scheme and workplace relations, among others, according to a new report.

The Productivity Commission's (PC) Advancing Prosperity report, produced once every five years, comes as Australia's productivity hits its slowest in 60 years.

If it remains on its current path, the PC warned that Australia's future incomes would be 40% lower, while the working week will be five per cent longer.

The report outlined 71 various recommendations across different policy themes, including education, migration, occupational licensing, as well as workplace relations and platform work.

Migration reforms

According to the report, significant reforms to skilled migration could "yield large productivity benefits."

"A shift away from occupation-based lists towards wage thresholds as the basis for employer sponsored migration can re-focus the programme on productivity," the report said.

It recommended the abolition of the Business Innovation & Investment visa programme and removal of current list-based restrictions for employer-sponsored temporary and permanent skilled visas."

It should also increase the duration for temporary skilled migration to six years, subject to continuous employment with a sponsoring employer.

"The Australian Government should amend settings for employer-sponsored temporary and permanent visas to better allow workers to switch to competing employer-sponsors including by permitting a short period of unemployment while looking for a new sponsor," the report added.

Workplace relations reforms

The report also called for the amendment of the Fair Work Act 2009 to allow the Fair Work Commission (FWC) to have the authority to adjust award minimum wages in award reviews, among others.

It also called on the government to limit the ability of enterprise agreements to restrict productivity and review the recently passed Fair Work Legislation Amendment focusing on the "use of multi-enterprise bargaining and its effect on wages, prices, competition, and productivity."

Platform workers

An external independent dispute resolution function within the FWC for platform workers should also be introduced, according to the report, adding that a baseline level of insurance that will be provided and paid for by platforms should be considered.

It also suggested the creation of an industry-wide insurance scheme for platform workers or extending their workers compensation.

The report also called for the expansion of student loan schemes and the government's signature climate policy to boost Australia's productivity.

Government response

Treasurer Jim Chalmers said in a statement that the government "won't be taking up every idea" in the report but assured that it is working on some of the recommendations.

"Our work is aligned with the five themes, and we are progressing, in some form, more than two-thirds of the 29 reform directives outlined in the report, and methodically working through the specific recommendations," Chalmers said.

The Australian Chamber of Commerce and Industry also welcomed the results of the report, noting that lifting productivity is the "only way" Australians can afford healthcare, education, and disability support programmes.

"A labour force that gives businesses access to the skills they need to innovate and the flexibility to improve the way they operate is essential. Getting the education and training settings right will be critical. We endorse the Productivity Commission’s call for better teaching and innovation in the education sector, and a more effective use of skilled migration," ACCI chief executive Andrew McKellar said in a statement

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