What Happened to Australia’s Productivity Surge

Productivity Commission Australia’s productivity has grown 1 percent-age point per year slower in the current decade than in the 1990s. This article shows that al-most one-half of the slowdown is related to unusual developments in the mining industry, the effects of drought and the overstatement of productivity growth in the 1990s. Part of the re-mainder might be as a result of a combination of slower technological change, unmeasured de-clines in labour quality, the diminishing effects of past reforms and the increasing profitability of Australian firms. ∗ The research for this article was carried out while the au-thor was employed by the Productivity Commission. The views expressed are those of the author and do not neces-sarily reflect the views of the Productivity Commission. 1