COMMITTEES

Senator DARMANIN (Victoria—Deputy Government Whip in the Senate) (17:13): It's a pleasure to have recently joined this Select Committee on Productivity in Australia as deputy chair and a pleasure to work with Senator Ananda-Rajah, Senator Bragg and Senator McKenzie on the inquiry. In the packed agenda of five days of hearings that I've participated in already, we've examined a lot of serious issues, and this interim report that has been tabled today outlines some of those issues.

What I would say in terms of those of us on this side of the chamber is that what we say about productivity and, more importantly, what this government does in terms of productivity is really important to think about. This government is delivering the broadest productivity agenda that this country has seen since the 1990s. The 15 productivity reforms that have been progressed in this budget alone will help attract and absorb more investment, make it easier and quicker to build, and slash compliance costs when it comes to housing and infrastructure in this country.

They will make a meaningful difference, cutting regulatory costs by $10.2 billion every year, and boost GDP by $13 billion. By contrast, the Liberals and Nationals want to make people work longer and harder for less. As a consequence of their policies, Australia experienced the slowest decade of productivity growth in 60 years on their watch.

Under the coalition, productivity growth fell for seven consecutive years in the lead-up to the pandemic, and the 2022 election coincided with the largest quarterly fall in productivity growth in more than four decades. If we want to talk about productivity and how we can deliver productivity in this country, then looking at what this government is doing in terms of action to turn around that massive decline is what we really need to be mindful of.

And, of course, we know that productivity has been a longstanding challenge in our economy, and that's why it was such a focus of this year's budget. I'd like to thank the senators, the witnesses who have appeared and those who have made a submission into the inquiry so far. I also want to acknowledge, as part of that, that we heard that, in terms of measuring productivity in this country, there is a challenge.

Measuring productivity isn't just about building houses and infrastructure that you can easily measure. Measuring productivity in the non-market sector is just as important. If we think about Australia and Australia's future, the rise of the non-market sector is a larger and larger proportion of our economy, so we are going to need to consider how we measure in terms of productivity.

The inquiry so far has elicited that the current measurement that we use doesn't allow the same easy way of describing product input and then product out in the same way. For example, a nurse seeing more patients with the same number of hours—is that going to deliver a quality result or is that going to deliver a worse result for the health of our Australians?

I do think that conventional measures don't always capture improvements in productivity, in quality, in wellbeing, in prevention and in other outcomes, meaning the value created by these sectors may be understated, particularly in the care sector. We also explored a little bit in the inquiry productivity and the costs to the environment, how those things are counted and measured, and what gaps there are in our current frameworks around those things.

Having said that, we know that the Albanese government has identified this decline as one of the biggest challenges facing our nation, which is why the Economic Reform Roundtable was convened in August 2025. One of the three main themes of this work was making our economy more productive a year ago. Following the roundtable, the Productivity Commission had completed inquiries into aspects of each of the government's five pillars of productivity which were identified.

This work represents an ambitious reform agenda aimed at lifting productivity growth, boosting economic resilience and supporting higher living standards. I'd also like to say that this question about productivity is also needing to be thought about within the global context and the geopolitical uncertainty that our country faces. In recent years, instability and global conflicts have directly affected housing construction in Australia by driving up material and energy costs, disrupting global supply chains and tightening financing conditions.

These are all a factor in thinking about how we address the productivity challenge in our country. The pressures have increased the cost and complexity of delivering new housing, contributed to project delays and cancellations, and further constrained the capacity of the construction sector to respond to the strong demand for housing. In particular, the government has prioritised what we can do within this context and taken strong action to shore up our fuel security, which is a key driver in delivering construction materials around the country.

By investing in strategic fuel reserves and domestic storage capacity, Australia's exposure to the global supply disruptions and price volatility has been reduced, helping to moderate cost pressures across the construction sector. I will leave it there and seek leave to continue my remarks later. Leave granted.