Our economy has become unbalanced and is in danger of slowing to a halt. But not to worry. The Reserve Bank is determined to ensure that, should we sink under the sea, we won’t have had an inflation problem to worry about.

This is the week we fix our productivity problem, but how far we get remains to be seen. The problem is that, while improving the efficiency with which the economic machine converts inputs of raw materials, capital equipment and human labour into outputs of goods and services has been the way we’ve raised our material standard of living over the past two centuries, there’s been no improvement in this productivity for a decade.

RBA governor Michele Bullock has noted there’s nothing the central bank can do about productivity.Credit: Dominic Lorrimer

But if that’s the problem, we still have a problem: no one wants to accept responsibility for fixing the problem. That’s for the government to do. Even the Reserve Bank wants to pass the parcel to the government.

Last week, while finally cutting the official interest rate by a click, the Reserve lamented the need to lower its assumed annual rate of improvement in productivity from 1 per cent to 0.7 per cent, with governor Michele Bullock noting there was nothing the Reserve could do about productivity.

The weirdest thing about this episode is the way the business lobbies have got away with portraying the lack of productivity improvement as having been caused by the government. It’s as though productivity is something created on the Cabinet room table, the product of good – or not-so-good – policy decisions.

You’d never know that the figure for national productivity........

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