Anyone who has studied first year economics will recall the basics of the production theory: when labour input rises, total output should follow. While this sounds simple in theory, Australia’s economic reality has thrown a real curveball into the equation. Despite the fact that we are working longer hours, aggregate output has barely seemed to budge. In the year to March 2025, labour productivity fell by 1%, while multifactor productivity crawled up just slightly by 0.1%.
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