At last, some sense on the causes of our poor productivity performance. For ages, we’ve been told it’s the government’s fault – maybe even the voters’ fault – for failing to make economic reforms. But last week the econocrats finally set the record straight: the problem is, our businesses have stopped doing the things that make us more productive.

For about a decade, we’ve had little improvement in the economy’s productivity – its ability to produce more goods and services from an unchanged quantity of inputs of labour and capital. That is, to be a bit more efficient this year than we were last year. Most of the other rich economies have the same problem, but ours seems worse than most.

It’s by increasing our productivity that we’ve become so much more prosperous than our great-grandparents. For instance, in 1901 it took 18 minutes of the average worker’s time to afford a loaf of bread, while today it’s just four minutes.

Working from home is linked with lower wage growth, higher productivity and happier staff.Credit: Dionne Gain

It’s remarkable the way the nation’s economists have stayed silent while vested interests such as the (Big) Business Council have sought to use this problem to press the government for favours that would make them more profitable without having to try any harder.

Until now, and except for former top econocrat Dr Michael Keating, no economist has pointed out how far the politicking over productivity has strayed from Economics 101. To hear the rent-seekers talk, you’d think that one of the main things governments are responsible for is producing and distributing productivity.

Nonsense. Because the private sector produces the great majority of the economy’s goods and services, it’s overwhelmingly the job of businesses........

© The Sydney Morning Herald