Productivity Commission reports on National Reform

A Productivity Commission study has found that Council of Australian Government’s (COAG’s) National Reform Agenda has the potential to significantly raise national output and incomes in Australia.

The study examined the benefits potentially available in the long term from achieving more cost-effective health services, and other areas of COAG reform. The Commission found that a 5% improvement in the productivity of health service delivery could deliver savings of $3 billion a year and increase GDP by 0.4%.

It also found that increases in work participation and productivity, due to better health promotion and disease prevention strategies, could potentially increase GDP by 6% and 3% respectively after 25 years.

The Commission found that all jurisdictions would receive increased tax revenues flowing from reform-induced growth. For the competition and regulatory reform streams, Governments’ combined net revenues could rise by as much and productivity — targeting health promotion and disease prevention, education and training, and work incentives — could potentially yield even larger gains, depending on program implementation costs (which were not modelled and depend on Governments’ decisions about specific measures).

Productivity Commission Chairman, Gary Banks, said: “Australia has greatly benefited from National Competition Policy and the other structural policy reforms of the past two decades. This analysis suggests that there is just as much at stake in pursuing COAG’s National Reform Agenda.”