Treasurer Jim Chalmers has appointed Chris Barrett, an economist with extensive public service experience, as the new chair of the Productivity Commission.
Barrett was former Treasurer Wayne Swan’s chief of staff when Chalmers was the deputy chief of staff. Later he was appointed by the Labor government as Australia’s ambassador to the Organisation for Economic Cooperation and Development (OECD).
Barrett is presently deputy secretary of the economic division of the Victorian Department of Treasury and Finance.
The outgoing head of the Productivity Commission, Michael Brennan, was appointed by the Coalition and had worked for senior Liberals. He attracted criticism from the then-Labor opposition for having political connections.
Chalmers, announcing Barrett’s appointment, was at pains to stress he had been been through a rigorous recruitment process.
The treasurer made it clear the commission will soon have a new focus. A review, spearheaded by Treasury, is underway.
Chalmers said he wanted to “revitalise and renew and refocus” the commission, recognising that “productivity has evolved”.
“We’ve made it clear we think the productivity opportunity for Australia is not to make people work longer for less but to invest in human capital, it’s to invest in the energy transformation, to get much better at adapting and adopting tech as it evolves.
“I want to make sure the Productivity Commission is providing the kind of insights and perspectives about a more modern economy that a government can pick up and run with.”
Chalmers said the commission “will remain fiercely independent as it should be”. He would not put a date on the finalisation of the review, which will now involve the new chair, other than to say “months rather than years”.
Labour productivity as measured by GDP per hour worked has been falling since March 2022.
In the 1990s, labour productivity was increasing 2.2% a year; in the decades leading up to COVID it was growing at only half that rate.
Chalmers said: “The decade to 2020 was the worst for productivity growth in Australia in the last 60 years. And it will take time to turn that around.
“Nobody pretends that there’s a switch that you can flick to turn around what has been disappointing performance on the productivity front.”
Chalmers said Brennan had made a significant contribution to the commission, saying it had “featured prominently in the nation’s conversation about Australia’s productivity”.
Shadow Treasurer Angus Taylor said the test of Barrett’s performance “will be in whether he pursues genuine productivity reform or rubber stamps Labor’s union-led agenda that business is warning will take productivity further backwards”.
“The Productivity Commission has given a roadmap in its five-year review yet the government has buried it,” Taylor said.
At his news conference, Chalmers also gave the latest update for last financial year’s surplus, indicating it is likely to be above $20 billion.
He said the government was focused on delivering the cost of living relief it has announced but it was not working on a new package.
