We need to have an energy system that is secure, reliable and sustainable while also being efficient and affordable. Boosting our energy productivity helps lift our overall competitiveness. It will reduce costs for business, improve profitability of enterprise and free up capital for investment and job creation. Improving energy productivity is also key to decarbonising Australia's economy while maintaining economic growth.

Australia remains a relatively energy-intensive economy by OECD standards. Energy productivity improvements in recent years have been poor, against both OECD and G20 averages. Over the past two decades, for example, China has improved its energy productivity twice as fast as Australia. We currently sit in the bottom quartile of OECD nations on this important economic measure.

Australia’s relatively poor performance has been exacerbated by large increases in energy costs in recent years - electricity in the past decade and gas more recently. Energy costs grew by two thirds in the decade to 2011/12 - from $72 billion to $120 billion, which is close to the total private sector labour costs for the whole of Queensland. Over that same decade, average energy prices rose by 38%, while productivity only increased by 16%.

Improving energy productivity can make a significant difference to improvements on overall economic productivity. Strong performance in energy productivity has multiple benefits - reducing pollution and reducing costs for households and business, and driving growth in the national economy.