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Productivity and policy challenges in an environment of pervasive uncertainty

Economic indicators Economic forecasting Productivity Innovation Australia

When the organisers met with me to set the agenda for this conference session months ago, it was the first time since I have been in Chairman of the Productivity Commission – four years now - that we could not find a consensus and commit in advance to a topic that represented the outlook, the primary focus of policy challenges in the next year or so.

So we noted down the broad consensus was that things are so uncertain that uncertainty itself is the topic.

My own thought was that by July the fog would lift and the focus would be squarely on one main subject:

  • perhaps fiscal, with the domestic Budget process struggling with revenue forecasting and mounting debt
  • or perhaps political crisis, with a Commonwealth Government in power by a single seat and an array of domestic challenges, from marriage equality through to energy
  • perhaps international, with Trump-led challenges to our region’s traditional reliance on the US relationship, or the rise of populist sentiment breaking open the European borderless model
  • or maybe instability in China, under pressure from debt and the ever-rising local expectations generated from what must be the most astonishing economic transformation in human history.

But I was wrong. These were the great uncertainties 12 months ago - and again six months ago - and still today.

None dominate, yet all are ready to spring a nasty surprise and derail what little remains of a narrative about governing for a better tomorrow.

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