FEAR & GREED | Business News Q+A: How do we fix the productivity crisis?
Aug 17, 2025
In this discussion, economist Stephen Koukoulas, known as The Kook, delves into the pressing productivity crisis facing Australia. He emphasizes the significance of productivity for economic growth and living standards. The complexities of measuring productivity, especially in service sectors like nursing, take center stage. Koukoulas advocates for reforms to streamline bureaucracy and enhance efficiency. He also highlights the importance of political support and communication to drive necessary changes and navigate economic challenges effectively.
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Productivity Drives Living Standards
- Productivity is the main long-run driver of living standards because it raises national income per worker.
- Strong productivity requires innovation, skills, competitive taxes and labour markets.
Measurement Limits In A Services Economy
- Official productivity is measured as GDP divided by total hours worked, but measurement is imperfect.
- Services jobs make measurement especially difficult, so reported productivity may understate real contributions.
Hard-To-Count Service Roles
- Stephen gives concrete examples where output is hard to count: firefighters, test cricketers, journalists and priests.
- These examples show many service roles resist simple productivity metrics.