The Productivity Commission (PC) released its quarterly Bulletin, which explored the structural decline in Australia’s ‘capital deepening’, which has contributed significantly to the nation’s productivity malaise.
“Labour productivity tends to increase when workers have more or better capital (such as computers and buildings) to work with, which is known as ‘capital deepening’”, PC Deputy Chair Alex Robson wrote.
PC Economist Daniel Arzhintar found that Australia has experienced little capital deepening in the past decade because we, as a nation, have tended to invest less of our national income in new capital.
