The Productivity Commission is taking a rosy view of AI.
AI will likely raise productivity, but there is ongoing debate about the magnitude of this effect.
Studies suggest AI could increase multifactor factor productivity between 0.5% to 13% over the next decade (0.05 to 1.3 percentage points annually).
After examining the assumptions underlying these studies, the PC considers that multifactor productivity gains above 2.3% are likely over the next decade (0.23= percentage points annually).
As a back of the envelope, this would imply labour productivity growth of about 4.3%, which at current levels of population, working hours and employment would imply about an extra $116 billion of GDP over the next decade.
That said, there is considerable uncertainty about the precise magnitude of the productivity effect.
As for the impact on jobs.
AI, like all previous technological changes, is anticipated to increase the demand for workers in some professions and decrease it for others.
Inevitably, this will involve both painful transitions for workers whose roles are made redundant and positive changes from new opportunities. But precisely which occupations will be affected, the amount of job losses, job creations and job changes, and the speed of the transition are all subject to a range of factors.
…Overall, most forecasts expect AI to result in a net increase in the number of jobs but with there could be a sizeable number of workers that are displaced.
For example, a report by the World Economic Forum forecasted, at a global level, a net growth of 2 million jobs due to AI and information processing technologies (including big data, virtual reality and augmented reality), with wider job growth due to AI forecast at 11 million jobs and displacement of 9 million jobs by 2030 (WEF 2025, p. 25).
Generally, the World Economic Forum expects that clerical and administrative related roles will have the largest job losses proportionally, while occupations related to IT and digital services will have the greatest gains proportionally (WEF 2025, pp. 19–21).
This is consistent with most other early studies, which have projected decreased demand for administrative roles or related skills over the next five years (McKinsey Global Institute 2024, pp. 13–14; OECD 2024a, pp. 35–36).
Yeah, well, so far it is IT that has suffered most as AI gobbles up programming first. Goldman on the US, which is leading AI deployment.
As Goldman suggests, it is certain that AI will displace entry-level jobs first. As such, it will have a disproportionate impact on youth employment prospects.
This is going to have an awful impact on the already unbalanced Australian economy, which grotesquely favours capital over labour, and assets over income, largely via the mass immigration-led economic model.
The best way to supercharge AI productivity gains while limiting the fallout for young workers is obvious.
Slash immigration to zero to take downward pressure off wages and upward pressure off asset prices.
Remember the warning of Larry Fink at Davos.
Or let AI terminate Aussie youth.
