Productivity Commission finds national productivity falls again with mining sector leading the decline

Miners have helped push productivity 2 per cent lower in the three months to June, according to the Productivity Commission in findings likely to reignite debate about how to stem continual declines.

Three industries — mining, electricity, gas, water and waste services and information, media and telecommunications — accounted for 46 per cent of the overall decline, with mining making up one-third.

The commission said while mining hours worked increased, output suffered a large decline with labour productivity following.

Iron ore mining and gas extraction decreased, the commission found, blaming adverse weather and planned maintenance for reduced production capacity.

The commission found labour productivity fell in 15 of 19 industries, even though hours worked across the economy rose 2.4 per cent.

Acting chair Alex Robson said employees were having to work longer hours for the same productivity output, which was the opposite of productivity growth.

“Even though hours worked rose, the rise in output was more modest, and that shows up as a reduction in labour productivity,” he said.

The latest findings come amid ongoing political debate about falling productivity rates, which have alarmed the Reserve Bank of Australia and pushed economists to warn Australians will face lower living standards if the issue is not addressed.

They also precede a shake-up of the commission itself, with The Grattan Institute chief executive Danielle Wood to soon take over as chair.

That comes at the same time as an internal review has been launched after serious workplace issues were uncovered at the commission.

Treasurer Jim Chalmers on Tuesday reiterated the Federal Government had a vast productivity agenda focused on promoting economic dynamism and resilience, building a skilled and adaptable workforce, harnessing data and digital technologies, delivering quality care more efficiently, and realising the opportunities of the net zero transformation.

“We want to build a productive and prosperous economy that creates more opportunities for more people in more parts of the country,” he said.