Economic success relies on productivity boost

One of the key factors affecting the Australian economy is the need to enhance productivity – something that could put the country on a more even keel. Several chief executives of top companies have spoken to The Australian (December 12), offering their views on what the economy requires to move forward and improve.

Chief of Qantas Alan Joyce was among those putting forward his insight, telling the publication that national productivity desperately needs to be lifted.

He isn't alone in his views, as BHP Billiton's Andrew Mackenzie agreed that productivity solutions should move to the front of the country's agenda. This is especially important as the economic outlook appears increasingly challenging.

"The gradual shift from construction to consumption in the Chinese economy, and a return to more sustainable levels of growth reinforces the need for Australia to continue to improve its competitive position and lift productivity in every industry – not just resources," said Mr Mackenzie.

Earlier this month, the OECD offered its suggestions on the measures that can be taken to improve the global economy, with wage inequality featuring high on the agenda.

The group indicated that the gap is increasing between the lower middle class and poor households, who are becoming more disconnected from the rest of society. OECD Secretary-General Angel Gurria said countries that encourage equal opportunities will be the most likely to prosper.

Figures show more than 10 percentage points have already been knocked off some countries over the past 20 years as a result of rising inequality. This has been seen in New Zealand and Mexico, while the UK and US have also seen their growth prospects suffer. Greater equality has led to a rise in GDP per capital in the likes of France, Ireland and Spain.