The Australian Productivity Miracle: A Sceptical View

Since the beginning of systematic microeconomic reform in the early 1980s, there has been a steady flow of official and unofficial predictions that the improvement in productivity made by possible by reform would yield improved living standards for all, or at least most, Australians. The first such predictions were made by Kasper et al. (1980) who estimated that the adoption of a program of microeconomic reform broadly similar to that subsequently implemented would result in annual growth in income per person of 3.8 per cent for the period 1975�2000, while continuation of past policies would yield annual growth of 1.7 per cent. The implied cumulative net impact of reform was an increase in income of more than 70 per cent.