So far as he is aware of, Andrew Leigh is Australia’s first minister of the Crown whose title consists of the phrase productiveness, which is fairly exceptional given its centrality to nationwide financial development and particular person materials wellbeing.

“The principle driver of how a lot individuals earn is how productive they’re,” he says. “The principle driver of how a lot earnings a family has is how a lot they earn. It’s on the coronary heart of family residing requirements.”

It’s additionally on the coronary heart of the federal government’s agenda for this time period of parliament.

Leigh says his job description is just one indicator of that.

One other was Treasurer Jim Chalmers’ instruction to the Productiveness Fee final December to supply 5 separate stories into numerous methods wherein it could be improved.

Yet one more was the prime minister’s announcement, in a speech on the Nationwide Press Membership on Tuesday setting out the federal government’s second-term priorities, that there can be a spherical desk of enterprise, union and civil society teams at Parliament Home in August “to assist and form our authorities’s development and productiveness agenda”.

This was rapidly dubbed a “productiveness summit” by media. Chalmers is because of fill in additional particulars subsequent week, however it’s already clear that the 5 Productiveness Fee stories will probably be central to the dialogue. They’re to be launched, one every week, from the center of July.

Different ministers, notably Housing Minister Clare O’Neil, have lately raised the prospect of sweeping reform in pursuit of higher productiveness.

That is mandatory as a result of, says Leigh, “we’ve got some severe productiveness challenges as a nation”. He provides: “The last decade to 2020 was the worst for productiveness development within the postwar period.”

From the Nineteen Nineties till the mid-2000s, the speed of development in Australia’s labour productiveness had been cruising alongside at 2.1 per cent a 12 months, effectively above the long-term common. It did so, because the Reserve Financial institution famous in a latest report, on the again of “deregulation and pro-competition coverage reforms, the speedy uptake of recent digital applied sciences and robust international productiveness”.

Then got here the worldwide monetary disaster and productiveness development fell to 1.1 per cent. Except for what Productiveness Fee chair Danielle Wooden calls a “bizarre bubble” of upper development through the Covid disaster, “largely as a result of we shut down low-productivity providers sectors”, it has remained at that stage ever since.

It won’t sound like a lot, however will increase and reduces in productiveness compound over time.

Each Leigh and Wooden cite the stand-out instance of this: the efficiency of Australia’s development sector. The effectivity with which we construct homes has been going backwards for 3 many years.

Between 1994/95 and 2022/23, in response to a Productiveness Fee report launched in February, the variety of new dwellings constructed per hour labored fell 53 per cent. Even permitting for the higher measurement and high quality of properties now, productiveness is down 12 per cent. Over the identical interval, labour productiveness within the broader financial system elevated 49 per cent. That dismal productiveness is an enormous a part of the explanation for Australia’s housing disaster. As Leigh notes, earlier than the crash in constructing business productiveness, the typical dwelling value the typical employee 4 years’ earnings. Now it’s 11.

Coincidentally, on the identical day as The Saturday Paper was conducting interviews with Leigh and Wooden, the bureau of statistics launched new knowledge exhibiting the typical value of a house had handed $1 million.

Blame regulation, says Leigh.

“You speak to old-time builders they usually say they used to have the ability to construct stuff within the time that now it takes to do the paperwork,” he says.

In his first speech as assistant minister for productiveness final week, Leigh drove dwelling the purpose by citing a latest report from the Committee for Financial Growth of Australia.

“The issue isn’t a scarcity of wealth, or concepts, or demand, it’s the quiet accumulation of obstacles.”

Again in 1967, the event software to construct a three-storey block of residences in Sydney was 12 pages lengthy. “At the moment, such an software would stretch to a whole lot if not 1000’s of pages,” he mentioned.

“Approvals drag on. Guidelines multiply. Outcomes are inconsistent. And the results are seen all over the place – from rising rents and overcrowding to the rising variety of individuals priced out of the communities they grew up in.”

The proliferation of rules and businesses and bureaucrats applies not simply in relation to housing, says Wooden, however is especially problematic in that sector as a result of it entails a number of ranges of presidency with a variety of coverage targets, together with security, native amenity, heritage, surroundings, accessibility, visitors, et cetera.

The result’s what two American financial journalists, Ezra Klein and Derek Thompson, of their bestselling latest ebook Abundance, name the “all the pieces bagel”.

Wooden has learn the ebook and will get the metaphor: “We layer on issues, all with very worthwhile targets and it’s simple to fake there isn’t a trade-off, however ultimately you get to the purpose the place the trade-off is obvious.”

Leigh additionally has learn the ebook and appreciated it a lot he titled his speech “The Abundance Agenda for Australia”.

As he defined to his viewers, abundance doesn’t imply “extravagance – glut, extra, waste” however that “a wealthy society ought to be capable of meet its individuals’s primary wants – housing, transport, vitality, training – rapidly, affordably and at scale”.

“And but,” he mentioned, “throughout the developed world, we’re falling brief. The issue isn’t a scarcity of wealth, or concepts, or demand, it’s the quiet accumulation of obstacles.”

In a single instance from Abundance, cited by Leigh, in San Francisco it takes a mean of 523 days to get clearance to assemble new housing and one other 605 days to get constructing permits.

“That is one motive why the median dwelling in that metropolis now prices US$1.7 million, in contrast with US$300,000 in construction-friendly Houston,” he mentioned.

“The distinction isn’t scandals, corruption or villains – only a tangle of approvals, businesses, consultations and codes.”

Klein and Thompson’s ebook has stirred large controversy amongst Democrats in America as a result of it attributes a lot of the blame for these obstacles to the progressive facet of politics.

Its arguments sound to many on the left like an echo of the small authorities, deregulatory, supply-side financial concept championed by their political foes on the best. They recall Ronald Reagan’s well-known line that “authorities isn’t the answer to our drawback; authorities is the issue”.

Leigh isn’t any Reaganite, however he does consider strongly in “the case for a extra formidable supply-side progressivism”.

“I believe Ronald Reagan gave supply-side … insurance policies a nasty identify amongst progressives, as a result of to him supply-side insurance policies had been all about attacking employees’ pay and circumstances.”

The progressive supply-side agenda, he says, is about one thing else fully however nonetheless provokes opposition as a result of “there’s a stress on the coronary heart of progressivism between getting issues carried out and permitting individuals to have their say”.

Leigh is, for instance, firmly on the facet of the so-called YIMBY motion that encourages higher density in housing – the acronym comes from “sure in my yard”. Meaning reforming native authorities guidelines.

“Zoning schemes reward conformity over high quality. Native objections – nonetheless honest – can block tasks that meet broader strategic objectives. Infill growth is regularly stymied by guidelines designed to guard ‘neighbourhood character’, even in areas inside strolling distance of jobs, faculties and transport,” Leigh tells The Saturday Paper.

“There’s nothing flawed with interested by how developments have an effect on the neighbours … however we should be cautious that the buildup of well-meaning guidelines doesn’t add as much as a system which stymies constructing.”

Likewise, Leigh sees an apparent must expedite the approvals course of for vitality tasks. He lauds the Victorian authorities’s latest strikes to fast-track renewables growth.

“You possibly can’t meet a 2050 internet zero emissions goal if it takes 20 years to construct a renewable vitality undertaking,” he says.

“The purpose at which the Victorians found that they had $90 billion of renewables tasks tied up in VCAT [the Victorian Civil and Administrative Tribunal] was the purpose at which they realised … that you just simply can’t afford issues to be gummed up in approval processes.

“That method of claiming renewable vitality is completely different, and we have to enable a fast-track method, I believe is one which goes to be replicated in different contexts as effectively.”

Inevitably, although, there will probably be howls of protest from these against higher density of their neighbourhoods, or who don’t need wind or photo voltaic farms or transmission strains impinging on their land.

Leigh sees an identical want for change within the training sector.

Over latest years, he says, Australia’s tertiary establishments have seen a pointy improve within the ratio of managers to teachers. Restoring that stability, and eliminating these unproductive layers of educational paperwork, is one problem. One other, not unrelated, one is encouraging the commercialisation of the analysis produced by these teachers.

“In comparison with different international locations, there’s much less collaboration between enterprise and academia in Australia,” he says.

“In case you stroll the streets round Stanford or MIT, you run throughout an entire lot of spin-off corporations which are linked indirectly to the schools. In case you stroll the streets round a serious Australian college, you come throughout numerous pretty bars and cafes however not so many spin-off corporations.”

It’s one factor to argue the case for change however fairly one other to get it applied, notably when it means getting motion from a number of ranges of presidency.

It has been carried out earlier than, nonetheless. Leigh harks again to the time three and 4 many years in the past when Australia final loved an enormous increase in productiveness.

The swaggering architect of a lot of that change, Paul Keating, famously boasted that one might “stroll into any pet store in Australia and the resident galah will probably be speaking about micro-economic coverage”.

“Within the ’90s, nationwide competitors coverage actually received its steam up as a result of the prime minister was eager on it and Paul Keating tasked Fred Hilmer and colleagues to place collectively a report, which then led to nationwide competitors coverage,” Leigh says.

“So there have been funds made to the states for reforms that may increase the nationwide financial system. We’ve picked up precisely the identical mannequin.

“It’s not going to be a matter of pulling one lever. It’s a matter of doing an entire collection of reforms that collectively add as much as an enormous deal.”

In fact, we gained’t know the element for some months but, till we see precisely what comes out of these 5 stories from Wooden and the Productiveness Fee.

The primary, says Wooden, goes to fostering a “dynamic financial system”, which incorporates company taxes and the “broader regulatory setting”.

The second pillar “is round expertise, human capital and labour markets – all the pieces from making the college system work higher to expertise system to problems with occupational licensing making {qualifications} transferable between jurisdictions”.

The third is knowledge and digital, “with a specific deal with AI – how we make it possible for we don’t put extreme regulatory constraints in place that may stifle uptake”.

Fourth “is across the care financial system, regulatory streamlining … for those that work throughout aged care, incapacity care and ensuring that governments have the incentives to make upfront investments in early interventions that may save prices and harms down the monitor”.

Fifth, she says, is streamlining approval processes and “making an attempt to create extra constant carbon value alerts”.

The criticism of the first-term Albanese authorities was that it was too cautious. The promise was that extra would occur in its second time period.

Now, given a thumping election win that every one however ensures a 3rd time period, it might simply be that the promise of massive issues will probably be met.

Andrew Leigh is actually speaking huge. “We’re shaking the beast alive,” he says.

This text was first printed within the print version of The Saturday Paper on June 14, 2025 as "Shaking the beast alive".