ABC News Daily 2025 Picks: The productivity problem with car washing
Dec 29, 2025
In this insightful discussion, Ian Verrender, ABC's Chief Business Correspondent, delves into Australia's productivity challenges. He questions why hand car washes are outpacing automatic ones and links it to immigration policies. Verrender argues that boosting productivity is crucial for living standards, but wonders if higher wages could be a solution. He also discusses the tension between measuring productivity in services versus manufacturing and highlights the impact of population growth on productivity outcomes.
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MCG Digging Example
- Ian Verrender uses digging the MCG by shovel versus an earth‑mover to illustrate productivity.
- The example shows machinery can compress months of labour into hours, clarifying the concept.
Car Washes Reveal Productivity Shifts
- Automatic car washes raised productivity by turning hours of work into minutes of machine time.
- The recent return of hand-wash services shows labour cost shifts can reverse mechanisation trends.
Immigration Can Mask Productivity Problems
- Increased immigration and cheaper labour made hand-wash car businesses viable again.
- That imported cheap labour effectively reduced measured national productivity, Ian Verrender argues.