Australia’s Productivity Commission: An overview for marketers

In December 2024, the Government tasked the Productivity Commission, the Government’s research and advisory body ‘on economic, social and environmental issues affecting the welfare of Australians’, with identifying the highest priority reform areas under each of the following productivity pillars:

1.    Creating a dynamic and resilient economy
2.    Building a skilled and adaptable workforce
3.    Harnessing data and digital technology
4.    Delivering quality care more efficiently
5.    Investing in cheaper, cleaner energy and the net zero transformation

Since Labor’s recent election victory, Treasurer Jim Chalmers has indicated renewed focus on productivity, identifying stalled productivity growth as a top priority in the term of government:

“The best way to think about the difference between our first term and the second term …[is] the first term was primarily inflation without forgetting productivity, the second term will be primarily productivity without forgetting inflation.”

What is productivity?

In economics, productivity refers to how much output can be produced with a given set of inputs. Productivity increases when more output is produced with the same amount of inputs or when the same amount of output is produced with less inputs.

In short, productivity is about working smarter, not harder.
Productivity growth is the key driver of real wage growth and rising living standards over the long term, but it has been slowing around the world since the mid-2000s. Australia’s productivity growth in the decade to 2020 was the slowest in 60 years. Australia’s productivity growth is also lagging when compared to advanced economy peers in the Organisation for Economic Co-operation and Development (OECD). 

Public consultation

By December 2025, the Productivity Commission seeks to have its final report to Government. Working with these tight timeframes, the first stage of consultation, which ran from December 2024 to January 2025, crowdsourced ideas from all Australians on how to improve Australia’s productivity. The process, called the Productivity Pitch, elicited a range of interest and engagement, resulting in more than 500 ideas received across the 5 pillars.

The second phase of public consultation has now commenced. Starting from 19 May through to 6 June 2025, Australians are invited to provide feedback on the shortlisted policy reform areas via an online questionnaire.

Using surveyed responses, the Productivity Commission will release their interim reports in July – August, with further consultation and submission dates to be advised.

ADMA engagement

Of the five pillars under review, Harnessing data and digital technology will have the most impact on marketing operations. ADMA’s Head of Regulatory and Advocacy, Sarah Waladan, and Chair of ADMA’s Regulatory and Advocacy Working Group, Peter Leonard, recently met with the Assistant Commissioner, Jared Dent. Sarah and Peter identified central issues relevant for the industry, such as data and privacy, and artificial intelligence. They discussed the importance for both Government and industry to achieve a pragmatic balance between data and privacy through measures which avoid regulatory overreach that could suppress the digital economy, but are reasonably balanced and did not compromise consumer welfare. 

Further discussion focused on the role that AI plays in encouraging innovation, the extent to which extending regulation of as to collection and handling of personal information may impose additional financial burdens upon Australian businesses, and whether these financial costs were reasonably quantifiable. 

Jared Dent noted that some commentators had suggested that the possible second tranche Privacy Act amendments may impose substantial additional financial burdens upon small to medium business enterprises, and whether there might be benefit in staging of amendments, or taking a sector-sector approach, or in creating a simplified or streamlined version of Privacy Act requirements as might be applied to SMES, in order to ensure that extended data privacy requirements did not impede productivity growth. 

Commenting on the Assistant Commissioner’s statement that small and medium-sized enterprises had been underrepresented in the first phase of public consultation, Sarah and Peter agreed that facilitated industry roundtables would be beneficial in amplifying yet-to-be-heard voices. The Privacy Commissioner is now looking to move quickly on hosting industry roundtables as the consultation process progresses. 

Relevance to marketers

It is important for the marketing industry to have a voice in the consultation process to ensure Australia can still achieve significant productivity gains without compromising critical industry practices. At ADMA, we believe that consumer privacy and responsible data use can not only co-exist through smart regulation and creativity, but can thrive together. 

Australian Privacy Act reforms anticipated in tranche two would see an uplift of privacy standards. Overly complex regulation, like the current EU model, will stifle productivity, while insufficient guardrails around protection, while a piecemeal regulatory framework as seen in the US, would be detrimental to privacy protections. Rather, we should seek a middle-ground between these polar positions, to maximise productivity and protect privacy. The principles-based application of Australian privacy law assists in this context. 

Privacy-protected data sharing and the responsible use of AI can co-exist. However, it will require creative thinking around digital ID infrastructure and operational safeguards while ensuring the law is applied both adequately and responsibly. Further, AI models must be trained on quality Australian data that reflects our unique socio-economic environments and multi-ethnic population. These two components will be integral to our submission on the Productivity Commission data and digital technology pillar.

ADMA is looking forward to actively engaging and working with the Productivity Commissioner, particularly on the topics of AI, data, privacy reform, and SME impact, throughout submissions on the second round of consultation as well as industry roundtables attendance. We’ll continue to share updates on the Productivity Commission consultation process and how it relates to Industry as they unfold.