Productivity downgrade to cost average Australian $35,000, warns Angus Taylor
Opposition Leader Angus Taylor will warn the average Australian will be $35,000 worse off over the next decade as the country’s productivity forecasts are slashed, as national leader Matt Canavan calls on the government to impose tariffs against China.
In their dueling speeches to the Business Council of Australia, Taylor and Finance Minister Jim Chalmers will shed light on the country’s lower growth limit of around 2 per cent; When this limit is exceeded, the economy becomes too hot and increases consumer prices.
Chalmers, who based his authority on a reformist budget in May, has pledged to take action on productivity in the coming weeks and pledged to strike deals with state governments to boost competition, with the Productivity Commission study underpinning a new instant asset write-off plan.
“The productivity package will be significant and will be all about making it easier and faster to build, more attractive to invest and trying to reduce some of your compliance costs,” Chalmers told a business lobby event on Tuesday night.
In his first major speech to rebuild the Coalition’s economic agenda, Taylor will lay out the lines of attack on Wednesday as Chalmers prepares a budget under bleak economic conditions fueled by the oil crisis and stubbornly high inflation.
Taylor, a former management consultant who espouses traditional free-market principles on economics, will argue that Labor has turned Australia into a “government-driven” economy where public spending outstrips the private sector and Australians stand out simply by working longer hours.
Taylor will say that Chalmers’ announcement last week that it would take an additional five years to return Australia’s poor productivity rate to the long-term average means Australians will endure a “lost decade” of economic hardship, citing an analysis his office showed “a $35,000 loss of national income for every man, woman and child in Australia”.
The Coalition has lost its historic advantage over Labor on economic management at the last election for the first time in the decades-long history of the Australian Election Survey. Last term, opposition leader Peter Dutton proposed state-backed nuclear energy, sometimes antagonizing big companies. Taylor was involved in the decision to oppose Labour’s small income tax cut just before the election campaign, but has since described the call as a mistake.
“Since Labor was elected, Australians’ living standards are 10 percentage points lower than growth seen in peer countries. This is the worst collapse in living standards in the developed world,” Taylor will say.
In his speech, Chalmers pushed back on the idea that Labour’s policies of pumping billions of dollars into re-industrialising blue-collar sectors were at odds with the need to cut spending to allow the private sector to thrive.
“This is not about resilience or reform, it’s about resilience and reform. Reform is all about resilience, they’re the same thing,” Chalmers said.
Chalmers responded to Taylor’s criticism by saying: “Angus and the Coalition have overseen the worst decade in 60 years in terms of productivity, Australians are paying the price and that’s one reason no one takes them seriously on the economy.”
Australia, Europe and other advanced economies are all trying to rebuild state capacity while increasing productivity; This is a challenge because China’s massive subsidies make production uncompetitive.
European leader Ursula von der Leyen warned the Australian parliament on Tuesday about China’s overcapacity, saying the superpowers’ $1.2 trillion trade surplus with the rest of the world was hurting industries around the world.
“Getting China right is a strategic imperative,” von der Leyen said. “We cannot and will not absorb China’s export-led growth model and industrial overcapacity.”
Canavan lashed out at the Australia-EU free trade agreement signed on Tuesday and backed protectionist causes, a potential point of tension with Taylor.
Australia should step up anti-dumping cases against China pumping cheap steel into the country, the national senator told this imprint. “At the moment a decision isn’t due until Christmas, but that may be too late,” he said.
“While I disagree with Donald Trump that ‘tariff’ is the nicest word in the English language, it’s not a dirty word either. It’s just a tool, and we need all the tools at our disposal to save our steel industry.”
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Paul Sakkal is Chief Political Correspondent. He has previously covered Victorian politics and won the Walkley award as well as the 2025 Press Gallery Journalist of the Year award. Contact him securely on Signal @paulsakkal.14.Connect with: X or email.
