The use of resources by local government is likely to come under the spotlight as part of a wider investigation into increasing Australia’s productivity.

The Productivity Commission has been tasked with conducting the review and recommending a roadmap to guide government reforms.

A spokeswoman said the commission will be consulting widely in undertaking the inquiry.

“We are particularly keen to hear examples of productivity-enhancing reform options,” she told Government News.

“This includes examples of where local governments might be innovating in their use of resources required to provide the same outcomes for consumers, or increasing their capacity to provide services to people.”

Productivity-enhancing reforms

Releasing the terms of reference for the productivity review this month, Treasurer Josh Frydenberg said productivity growth was vital as Australia and global economies began to emerge from the impact of Covid-19.

Australia needed policy settings that fostered a flexible and dynamic economy and helped it adapt to a digital economy, he said.

“The Commission is to review Australia’s productivity performance and recommend an actionable roadmap to assist governments to make productivity-enhancing reforms,” he said.

“Each recommendation should qualitatively and quantitatively estimate the benefit of making the reform and identify an owner for the action and a timeframe in which it might occur.”

The review will:

• analyse productivity performance

• identify productivy challenges

• consider opportunities for improving productivity

• identify priority sectors for reform

Slowed growth

In its call for submissions, the Productivity Council says Australia’s productivity levels are currently ‘middling’ and productivity growth has slowed over recent decades.

It says the 2000s mining boom help support flagging growth in labour productivity but one-off factors like this aren’t reliable sources of growth over the long term.

The Inquiry will focus on economic reforms rather than “social and other reforms that may be desirable but not impact productivity directly”, the commission says.

It’s calling for examples from both overseas and within Australia addressing the following questions:

• What are the key drivers of productivity that governments should be influencing
• Which productivity reforms should governments prioritise
• Which international examples are relevant to the Australian context

Submissions close on March 23 and the Commission must report back to the government by February 2023.

The Inquiry is the second in a five-year series. The previous inquiry, which also took in local government performance,  was completed in 2017.

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