April 2026

Rebooting Australia’s Productivity 

In the 2026 Annual Infrastructure Oration, Graham Bradley AO, Chair of Infrastructure NSW, called for decisive reform to lift investment, efficiency and national competitiveness.

A former president of the Business Council of Australia, Graham Bradley AO has chaired Infrastructure NSW since July 2013. 

During this time, he has overseen a period of extraordinary infrastructure investment, including WestConnex, NorthConnex, Sydney Metro and Light Rail, and important social infrastructure such as Sydney Modern, new sports stadiums at Moore Park and Parramatta, and most recently the new Sydney Fish Market.

Below is a transcript of Graham’s 2026 Annual Infrastructure Oration, delivered in Melbourne at Infrastructure Partnerships Australia’s National Infrastructure Awards on 23 April 2026.

Australia, we have a problem!

For almost a decade our national productivity growth has been near enough to zero. 

As a consequence, unlike the quarter of a century before that when our national productivity grew at an average annual rate of 1.8%, the wealth of Australians has diminished, our national competitiveness has declined, the return on the capital spent on many major infrastructure projects has been low and we are all paying more for less efficient infrastructure and public services. 

That is our dismal situation today. 

Not so much a boiling frog problem but a freezing frog problem: the water has gone from tepid to chilly and unless the frog jumps out soon, it will freeze. But here is the complication. 

Almost nothing that we have tried to do over the last decade to reboot productivity has made a meaningful or lasting difference. 

• Recommendations of numerous Productivity Commission reports – largely ignored. 
• Promises to cut red tape – overwhelmed by the blizzard of new regulations. 
• Economist warnings about the unsustainable trajectory of productivity – largely unheeded. 

Tonight, I will expand on our dire situation and then outline a path we could and should take to reboot our national productivity. 

First some distressing statistics for which I thank the McKinsey’s 2025 research paper on Australia’s productivity: 

• In contrast to the “golden 25 years” from 1993 to 2016 when our per capita GDP grew by 1.8% per year, average GDP growth in the past 10 years from 2016 has been 0.6% per year and since 2020 has been negative. 
• Productivity growth since 2016, measured by GDP per hour worked, has been zero, and since 2022 it has been negative. 
• In its submission to a Senate Committee last month, the Productivity Commission stated that Australia’s productivity growth over the past decade is at its lowest rate in 59 years. 
• By contrast, productivity in the USA over the past decade has grown by 17%. The average American worker now produces 70% more value-added per hour worked than the average Australian worker. Not 10% or 20% more – 70% more! 
• While productivity in the market sector of the economy over the past decade has grown by an anaemic 0.5% per annum, productivity in the non-market sector has declined by 0.3%, largely offsetting growth in the market sector. 
• This problem is compounded by the fact that total hours worked in the non-market economy is growing at twice the rate of the market economy and since 1995 has grown from 20% to 28% of total hours worked. In other words, growth of jobs in public administration, education, health and government services has become a growing drag on our national productivity and our national prosperity. 
• As our GDP per capita has languished at close to zero over the past decade we have slipped down the international competitiveness table in dramatic fashion. In 2016 we were on a par with the US at around 1.6% annual GDP growth, well ahead of many European countries and others with whom we compare ourselves. In this past decade we have been surpassed by countries such as South Korea (2.8%) Poland (2.7%), most of the Baltic states and even Iceland. We now rank 21 out of 42 countries surveyed. In short, our economic engine has stalled. 

And the Federal Treasurer recently stated (without apology!) that Treasury does not expect national productivity to grow significantly for the next five years!

Unlike our two national symbols, the kangaroo and the emu, famed for being physically unable to move backwards, we are today as a country in a productivity retreat. 

Productivity can be an abstract concept, one with negative overtones for focus groups and politicians. The productivity measures I have quoted mean more to professional economists than they do to a businessman like myself. Indeed, measurement of productivity is often contested and the measures are not infrequently revised. The precise measures may be debated but the trend is beyond controversy. 

But small percentages in annual GDP are not what keep me awake at night. What does keep me awake is the impact of failing productivity performance upon business performance. Here are a few examples. 

• “Building sites across Queensland are only productive for three days a week” –Lendlease CEO Tony Lombardo, in February 2026. The reason: inflexible rostering arrangements imposed by union-backed industrial regulations
• “Construction sector productivity in Queensland is down 9% over the past eight years and virtually what it was 30 years ago” –Queensland Productivity Commission Report 2025. 
• “Regulation has added as much as $320,000 to the average cost of a new home over the past 10 years” – Australian Productivity Commission’s Housing Productivity report February 2025. 

Another manifestation of our dire productivity situation is that capital investment in many major infrastructure projects is delivering woeful capital efficiency. A few examples will suffice: 

• National Broadband Network – $30 billion written off. 
• Inland Rail–an $11 billion project blown out to over 30 billion and counting. 
• Snowy 2.0– announced as costing “about $2 billion” in 2017, now blown out to $12 billion, with more expected, and closer to $40 billion when transmission costs are included. 
• Victoria’s North East Link Motorway – originally $10 billion, now estimated at $26 billion. 
• Our beautiful, soon-to-open Western Sydney Airport--will deliver hardly any passengers for years to come to its $15 billion metro link to St Mary’s, that prominent international tourist destination. 
  

All of these examples are federal and state government funded public sector projects. All have been characterised by premature government commitments, inadequate business cases (often conducted after project commitments and based on dubious and untested usage and return assumptions) inadequate investigation of cheaper, more productive alternatives and massive cost overruns resulting from inadequate risk assessments. 

Many of these projects betray an all-too familiar lack of “joined-up” planning. A good example is the new Western Sydney Airport, in part justified by improving airport access for Western Sydney residents, just when the Westconnex Motorway reduced the travel time from Parramatta to Sydney Airport to under 25 minutes. 

And in a re-run of a well-remembered episode of the TV classic Utopia, we have a federal government agency yet again promoting a now $93 billion High Speed Rail project, not from Sydney to Melbourne but from Sydney to Newcastle. The project now includes a $30+ billion stage which, if built some time in the 2040s or 2050s, would compete with the $20 billion Sydney Western Metro which is currently under construction and due for completion in 2032. 

Meanwhile, Australia’s private sector capital investment has also languished. Again, McKinsey reports that private capital expenditure is now below the recession levels of the 1990s and this has been a major contributor to Australia’s productivity decline. Falling investment in the resources sector explains much of this but non-mining investment is also at a generational low. 

This matters because, over the long-term, about 3/4 of productivity growth comes from “capital deepening” – that is, investing more capital per hour worked. McKinsey estimates that to return to market sector productivity growth of 1.8% annually Australia needs to increase private sector investment by $130 billion annually by 2030. 

But why would the private sector be keen to invest more in the face of increasing regulatory compliance costs, planning approval delays, uncertain worker productivity, energy cost inflation and an ever-changing and ever-burdensome taxation regime? 

Again, quoting McKinsey, in the eight years from 2016 to 2024 Australia’s construction, energy and finance sectors alone had to adapt to more than 80 major policy and regulatory changes. Right across the economy a growing number of compliance requirements have seen government intervene at ever more granular levels in the economy. Examples of anti-productivity regulation causing cost and delay are too numerous and too well known to this audience tonight for me to recite them here. 

Let me just ask this: 

• Why has it taken over 30 years for the federal government to loosen restriction on maximum air movements at Sydney Airport when aircraft engine noise has reduced materially during this time? 
• Why has the Fair Work Commission approved as legitimate protected industrial action at our ports for workers to use their non-dominant hands. Seriously! 
• Why in 2026 must a wind turbine blade transported from a South Australian port, across Victoria and into NSW navigate three different sets of rules for truck licencing, road closures, police escorts and road user charges? These legacy issues should have been left behind in the 20th century, not carried forward into the 21st century. 
• Why does an airport runaway approval in Melbourne with a 50-day statutory approval timeframe take 19 months from initial submission to ministerial approval? 
• Why does a renewable generation project assessed under the federal Environmental Protection Biodiversity Conservation (EPBC) Act take more than 500 days on average from application to approval? 

Unnecessary regulatory delays burden project costs and national productivity. Approving things too slowly, delivering them too late and at higher cost is just as much a drag on national productivity as investing billions of dollars in building the wrong projects or building the right projects prematurely. 

Let me conclude with an example from the energy sector. 

Government policies have effectively stymied exploration and development of the significant natural gas resources that exist under our feet, both here in Victoria and in New South Wales. As a result, private capital is now being spent in both states to build gas import terminals to bring interstate and international gas to meet our East Coast gas needs – needs which can only grow as more gas peaking generation is needed to support the renewable energy transition. The totally avoidable capital costs, not to mention avoidable emissions, caused by these policies are ultimately a burden on all industries and households. And have not recent international events made energy independence a critical national security issue! 

Unhappily, much of our national capital expenditure is yielding low productivity returns. An example is the huge amount being spent on renewable energy infrastructure to replace existing capital investments in coal generating power stations, with unrealistic government targets and timetables driving up the cost of delivery. Infrastructure Partnerships Australia has concluded that many renewable energy projects are in fact implausible, so further suboptimal short-term life extension of coal plants will almost certainly be needed. IPA’s analysis of the 298 projects valued at nearly $600 billion in the energy pipeline showed that only 24% met the criteria for successfully delivery. 

A further example of poor capital productivity is government-selected “Future Made in Australia” grants to fund investments in, for example, commercially unproven green hydrogen projects and solar panel production where our scale, labour costs and inexperience cannot hope to compete with overseas manufacturers. Such flights of fancy are a recipe for the long-term taxpayer subsidies we have seen so often in the past. As Gary Banks, former redoubtable chair of the Productivity Commission has said, the sense of déjà vu is palpable. 

So I ask: is it any wonder that the boardrooms of Australia hesitate to make new investments in capital deepening to improve their long-term operating performance? Is it any wonder that our position on the BCA’s Global Investment Competitiveness Index has declined to 21 out of 42 countries, and we are near the bottom of the class in business taxation and investment restrictions? 

So, our problem is clear, but the path to improvement is far from well-lit. 
Many noble aspirations over the past few decades have sought to address a key part of our productivity challenge--to reduce red tape, streamline planning processes and reduce regulatory uncertainty. Many have tried but almost all have failed. Here are some examples. 

• The 2006 Productivity Commission’s report chaired by Gary Banks – “Rethinking Regulation“ – outlined 178 recommendations, most of which were sensibly accepted by government – but relatively few were implemented. 
• A decade later, the 2016 NSW Auditor General’s report on red tape reduction concluded that legislative complexity and regulatory burden had increased, not decreased during the implementation of the “one-on, two-off” regulation reduction initiative and that alleged red tape savings were “inaccurate”. 
• More recently, the BCA released in 2025 its Better Regulation report which challenges governments to achieve a 25% reduction in the estimated $110 billion per annum red tape burden which is holding back national productivity. 

A worthy objective for some, but will it achieve more than its predecessor reports? The sad truth is that decades of deregulation reviews, working groups and roundtables, have brought little meaningful improvement. 

It is indeed a wicked problem. 

One is tempted to conclude that the only way to make a material impact on this intractable problem is a local version of the US Department of Government Efficiency (DOGE) along with a large dose of the approach Elon Musk applied to achieve productivity at his Tesla factories: namely, question every regulation, cut out every step in the approval or project delivery process that isn’t absolutely essential and if you haven’t got to add back 10% of what you’ve cut, you haven’t gone far enough! 

That is of course unlikely to be the Australian way. The water in the frog’s pot is getting cooler by small degrees but our sclerotic productivity has not yet reached the tipping point. 

Ladies and gentlemen, many reforms are needed to reboot our productivity growth—too many to detail here. I hesitate to say “reforms” as this label has been debased by frequent attachment to government policies that make things worse, not better. Let us just say that major changes are needed in many areas. These include: 

• We must return to balanced budgets – we must reverse our current trajectory of deficit spending by combined state and federal governments into the indefinite future. We could borrow an idea from Singapore which has legislated mandatory balanced budgets but with a requirement for the Parliament to justify any exception publicly by reference to national emergencies such as a pandemic or war. 
• We must reduce our uncompetitive taxation rates, both corporate and individual. Balanced budgets would decrease the pressure on government to tax inflation through bracket creep and would help us reduce our punitive marginal tax rates to internationally competitive levels. 
• We must slow the growth of non-market sector jobs compared to market sector jobs: for example, after a hard look at the need for current levels, by limiting public sector employment growth to no more than the rate of real GDP growth.
• We must reduce energy costs by being honest about the affordable and sustainable speed of energy transition. 
• We must rollback excessively restrictive labour market regulation and require productivity offsets for all increases in pay and conditions. 
• Last but not least, we must eliminate wasteful, productivity-sapping regulatory policies that delay projects, increase costs, deter innovations and inhibit private investment. 

None of these imperatives is easy to achieve politically – all require combined commitment by government, unions and the wider community. Forging a new 1980’s-style National Productivity Accord will take time. But the last of these – reducing regulation – would be the right place to start now. 

In its 2026 report on global investment competitiveness, the Business Council of Australia identified the high cost of regulation as a key factor materially reducing Australia’s attractiveness as an investment destination. 

Similarly, the IPA’s 2025 Investment Monitor survey of Australian and International Infrastructure investors found that red and green tape is now the single most significant challenge to investing in Australia. 

Earlier this week, the BCA, in alliance with all major industry associations, has recommended a series of actions to address this issue, including: 

• Commitment by all levels of government to a 25% reduction in regulatory costs by 2030, based on a national stocktake to identify redundant, duplicative and high-cost regulation across all levels of government. 
• An effective incentive mechanism to drive nationwide deregulation targets, including a seriously sized national productivity incentive fund to reward states for red tape reduction. 
• A cabinet level oversight function supported by a well-resourced Office of Impact Analysis to embed mandatory, consistent, and rigorous economic assessment for all new regulations and to ensure that new regulations only proceed if they demonstrably improve productivity and economic efficiency. 

All of these are good ideas but I fear that three key requirements are currently missing: 

1. A genuine and urgent commitment by federal and state governments to address the issue
2. A national productivity growth target with timelines, that is explicitly committed, published, and measured to hold government to account
3. Accountable champions within state and federal government with the authority and resources to drive the effort. Those champions should in my view be the federal treasurer and his state counterparts. 

What is needed is a deep, forensic, surgical challenge to every regulation that drives cost for both companies and government agencies delivering infrastructure or services to the public. Every application requirement, approval condition, or compliance report should be questioned and wherever possible eliminated or streamlined. Deleting even little things can have a large cumulative impact. 

For example, we should take a risk-based approach to the many compliance requirements that are currently imposed on companies universally across the board. One small example would be modern slavery reports now required annually, signed off by the boards of all companies with revenues above $100 million, regardless of the level of modern slavery risks in their operations. Where the modern slavery risk is low, why not report only every three years, or every five years? Apply this risk-based approach across scores of compliance requirements and pretty soon the savings will add up and the value of hours worked will rise. 

Another example would be to harmonise project approval documentation contract terms and terminology across the multiple departments and contracting authorities within each state government and, ideally, across state and federal governments. Unnecessary differences drive legal costs and contracting complexity. Surely, with the aid of a GenAI agent, this harmonisation could be achieved quickly and cheaply, if the will existed. 

In conclusion, a journey of 1000 miles starts with a few small steps. So it is with productivity. Let us not be overawed by the magnitude of the challenge or intimidated because “productivity” is viewed simplistically as code for cutting jobs. I call on our nation’s treasurers to become productivity champions. Let us all support them to get our productivity frog kicking once again. 

We cannot, we must not, stand idly by as our national productivity stalls and our living standards shrink. We are, I truly believe, a smarter country than that. 
Thank you.

Learn more about Infrastructure Partnerships Australia’s Annual Infrastructure Oration and National Infrastructure Awards. Congratulations to the award winners and finalists