QUESTIONS WITHOUT NOTICE
Dr CHALMERS (Rankin—Treasurer) (14:24): They've got a lot of nerve asking about productivity assumptions, given they presided over the weakest decade for productivity growth in the last 60 years. The weakest decade for productivity growth in the last 60 years was the decade that they presided over, and their budgets weren't worth the paper they were written on, because they deliberately kept productivity assumptions at 1.5 per cent.The June quarter of 2022—the quarter that they left office—was the weakest quarter for productivity in over 40 years, so they've got a lot of nerve asking about productivity.
They did nothing about productivity in their wasted decade of missed opportunities in office. The assumption in the budget and the assumption in the Intergenerational report is set by Treasury based on all the available data here and abroad. It is a long-run assumption.
It's not common to constantly change long-run assumptions. One of the first things I did as Treasurer was to get rid of the coalition's dodgy productivity assumption and make it more realistic, on the advice of the Treasury department. I accepted their advice to downgrade the long-run assumption to 1.2 per cent.
As I said, they're not changed frequently. While productivity growth has been weak for the last couple of decades, there are some potential upsides, including from artificial intelligence. The productivity assumption is consistent with international forecasts.
The UK uses 1½, the US uses 1.4, New Zealand uses 0.9, and we are in the middle of those assumptions. The Treasury changed the transition path from two years to five years, recognising how volatile short-term movements can be. But, more broadly, as I said, this country has had a productivity challenge not for the last couple of years but for the last couple of decades.
That's why this government, more than our predecessors over there, takes this productivity challenge seriously. We take responsibility for trying to turn it around over time, and that's why the budget had the broadest and biggest productivity agenda of any budget in recent decades. It's an agenda which is all about approvals being faster, working with the federation, foreign investment reform, all of the agenda that the Prime Minister ran through on AI and the technological revolution—all of the important ways set out in the Intergenerational report on Monday that we can try and turn this productivity performance around.
But to finish where I started, of all of the people that I would take advice from on productivity, those opposite would not be anywhere near the top of the list.