Workers could be $14,000 ahead under a growth mindset

Productivity Commission chair Danielle Wood says Australia should adopt a "growth mindset" to prioritise economic outcomes and boost living standards.

That includes changing corporate taxes to promote investment, simplifying regulations, speeding up housing and energy approvals, and ensuring artificial intelligence adoption isn't undermined by unnecessary regulation.

The suggestions were included in a sneak peek of the commission's priority reforms as it prepares to release a series of reports detailing solutions to Australia's productivity challenge.

"Australia should be a place where children born today can expect to live better and more prosperous lives than the generations who have come before them,' Ms Wood said.

"Productivity growth is essential to fulfilling that promise."

But productivity growth has plummeted in recent years.

How much Australia produces with the same number of workers has grown by just under 0.4 per cent a year since 2015, compared to the 60-year average of 1.6 per cent. 

The average adult full-time worker would be $14,000 a year better off by 2035 if the growth rate returned to the historic average.

In a new report, the commission laid blame for the slowdown on governments ignoring or minimising economic growth when making policy choices.

Policymakers have made it harder than it should be to start a business or build infrastructure such as housing or renewable energy because they have failed to weigh trade-offs effectively, been too risk-averse or "overly influenced by vocal stakeholder groups".

Governments must balance competing objectives and make choices that improve Australians' overall wellbeing, even if those decisions might negatively affect other goals.

"Bringing a growth mindset to policy decisions means elevating economic growth and its benefits," Ms Wood said.

"That doesn't mean policymakers should ignore other objectives, but it does mean being clear-eyed about the trade-offs."

The paper pre-empts an economic roundtable convened by Treasurer Jim Chalmers, which will take place over three days in August.

He said the report made clear the productivity problem had been around for decades and that almost every comparable country has had the same challenge.

In its submission to the roundtable, a joint group of industry associations - including the Business Council of Australia and the Australian Chamber of Commerce and Industry - outlined four priority areas for reform.

These include reforming research and development funding models to boost innovation, cutting the regulatory burden by 25 per cent by 2030, co-ordinating and unifying planning processes to speed up project approvals, and committing to comprehensive tax reform.

"We need to cut unhelpful red tape, streamline planning, fix the tax system and improve incentives for investment," Business Council chief executive Bran Black said.

"These policies can deliver benefits for economic activity across the whole country and importantly, ensure future generations aren't worse off."

But Australian Council of Trade Unions secretary Sally McManus said it was poor management that was dragging down productivity, with a survey conducted for the peak union body showing almost two in five employees suffered work burnout.

"This new survey highlights the symptoms of one of the most significant causes of slow productivity growth in Australia - poor management performance," she said.

"Despite this issue being uncovered in many significant international and local studies, our Productivity Commission largely ignores it."

Dr Chalmers said it was a good thing that a range of views was being expressed ahead of the roundtable, so that "we can tease out our differences and seek common ground".

"It's obvious that when it comes to decisions taken by managers and by boards and by others, obviously that has implications for productivity," he said. 

"It would be unusual in the extreme if the ACTU representing Australian workers weren't able to make that view public."

Australian Associated Press