In an address to the Business Council of Australia on Monday, Treasurer  Josh Frydenberg outlined his plan for increasing productivity to secure a brighter future with even higher incomes.

“This means creating the right incentives for workers and businesses through lower taxes, cutting red tape and flexible labour markets,” he said.

Titled ‘Making our own luck – Australia’s productivity challenge’, Mr Frydenberg’s speech also expanded on the Coalition Government’s focus on key areas for employers.

A skilled workforce

Mr Frydenberg recognised the need for a skilled workforce and how the nature of work is changing, conceding there was “more that we can do in this area and that increased funding is not the only answer”.

“Services and digital technologies are more prominent and employers require different skillsets from their workers than even a decade ago,” he said.

“Our vocational training system needs to reflect that its role in educating the workers of the future is just as valuable as our leading universities.

He pointed to the establishment of a National Skills Commission and a National Careers Institute to ensure that “funding goes to the right courses at the right time and that students know what jobs they can get from what courses”.

“In other words it is tackling the challenge at both the front and back end with incentives for VET providers and authoritative information for students,”he said.

“These initiatives build on the 80,000 apprentices we announced funding for in this year’s Budget with a doubling of the financial incentives for both employers and apprentices and the establishment of ten training hubs in regional areas.”

A healthy workforce

In addition, Mr Frydenberg outlined it is not just the skills of workers but also their health which is important for the quality of our labour force.

Citing people are living longer and at nearly 83 years, with life expectancy the third highest in the OECD, he said the Productivity Commission’s Shifting the Dial report detailed that Australians spend nearly 11 years in ill health, the highest in the OECD.

“If we were are to move those from poor health to fair health we could increase workforce participation buy around a third,” he said.

“Not to mention the reduced health costs, the improvement to peoples’ wellbeing and the overall boost to the economy which the Productivity Commission estimates could be worth up to $200 billion over the next 20 years.”

“Mental health and suicide are also key priorities for the Government with mental health the single largest contributor to the number of years Australians are living in ill-health.”

The Business Council of Australia estimate that 6 million work days are lost each year to mental health related issues.

He has also asked the Productivity Commission to undertake an inquiry into the economic impacts of mental illnesses and to make recommendations to boost productivity and social and economic participation.

Industrial relation and regulatory reform

Mr Frydenberg reiterated industrial relations reform and deregulation are two areas which directly impact on the productivity agenda.

“Flexibility in the work place is important but so too are the rights and entitlements of workers,”he said.

“It is about getting the balance right and taking the workforce with you recognising that as a company gains so does the employee.”

“We have important bills before the Parliament namely the Ensuring Integrity Bill (see related story) and the Proper Use of Workers Benefits Bill both of which will help ensure a law abiding work place and by definition a more productive one.

“We are interested in further workplace relations reform that is evidence based, pragmatic, protects workers entitlements and produces clear gains to the economy and working Australians.

He also highlighted deregulation requiring a balance to be struck – clarifying it was not about removing necessary consumer or environmental protections but rather ensuring our regulations are effective, efficient and fit for purpose.

“Better regulation not more regulation is the goal,” he said, in reference to a recent announcement to streamline approval processes for resource projects (see related story).

“Again the Productivity Commission is being put to work tasked to streamline regulations in the resources sector currently underway.

“A regulatory process which required 4000 approvals and took ten years to complete for a single iron ore project in Western Australia is not just too long and too costly but a significant disincentive to investment.”

“Working with Assistant Minister to the Prime Minister Ben Morton, I am again focused on tackling the deadweight cost of red tape and putting in place practises and processes that reduces the burden for businesses and consumers.”