economics series swp 2010/15 microeconomic reform and

Faculty of Business and Law School of Accounting, Economics and Finance

ECONOMICS SERIES

SWP 2010/15

Microeconomic reform and productivity in

Australia – boom or blip

MARGARET MCKENZIE

The working papers are a series of manuscripts in their draft form. Please do not quote without obtaining the author’s consent as these works are in their draft form. The views expressed in this paper are those of the author and not necessarily endorsed by the School or IBISWorld Pty Ltd.

Microeconomic reform and productivity in Australia – boom

or blip*

MARGARET MCKENZIE

School of Accounting, Economics and Finance, Deakin University, Melbourne

Australia.

Abstract: Increased aggregate productivity growth in the 1990s has been taken to

indicate support for the success of microeconomic reform policy in Australia. The

Productivity Commission / Australian Bureau of Statistics key estimates of peak to

peak market sector multifactor productivity growth since the mid 1960s are examined

in this paper. The peak to peak market sector measures are compared with five year

averages. Series are reconstructed for the whole economy, and simple regression

estimates obtained. The findings lend support to a spike in the measure in the 1990s

rather than sustained increase and highlight the sensitivity of the estimates to cyclical

and unknown factors.

I Introduction

Microeconomic reform policy in Australia was anticipated to bring forth large returns

in terms of productivity improvement for the economy. It was argued in 1999 that

measured aggregate productivity increases were due at least in part to microeconomic

policy and could be taken as a sign of successful policy direction. The Productivity

Commission (PC) found that research added ‘weight to the view that microeconomic

reforms are contributing to an enduring transformation of the Australian economy and

its economic performance’ (PC 1999 piii). Much of the improved productivity

performance that the PC argued to be observed in the Australian economy through the

1990s appeared to come from ‘transformation in the production side of the Australian

economy since the 1980s’ (PC 1999 pxv). In 2005 the PC argued that the surge in

productivity growth had underpinned 13 years of uninterrupted output growth to

2003-04. It cited productivity growth rates for the five year cycle to 1998-99 as the

highest for at least forty years. The slowing in productivity growth after 1999 was

seen as attributable to ‘temporary phenomena such as the drought’ and a recovery was

indicated for 2003-04 (PC 2005 ppxvi-xvii).

This paper investigates the measure of aggregate productivity increase that has been

used in considering the overall impact of microeconomic reform. Ex post and

aggregate evaluations are few. The Productivity Commission / Australian Bureau of

Statistics [PC/ABS] estimates of productivity for the Australian economy since the

mid 1960s have indicated that a productivity ‘surge’ has occurred in recent years.

This has been taken as a sign of a positive contribution of microeconomic reform to

the Australian economy. The productivity measure used is ‘multifactor productivity’

(MFP). This is the contribution to growth of a combined measure of capital and

labour (and other unmeasured) inputs for a ‘market’ sector which made up around 62

* I would like to thank Monica Keneley, John Quiggin, John Shannon, and seminar participants at

Deakin University, the Australian Conference of Economists 2005 and others for valuable comments

on earlier drafts.

JEL classifications C22, E61, L50, O47

2

per cent of the economy at 2002-03. This partial measure of productivity was used in

order to exclude non market output where output is largely measured at cost.

The use of MFP over time as obtained by averaging the annual MFP figures between

productivity growth peaks is investigated in this paper, inter alia by comparison with

computed five year averages. The use of ‘market sector’ measures of productivity is

also evaluated in the paper by reconstructing the estimates using data for the whole

economy and comparing the results with those for the market sector. The results of

some simple regressions are also considered.

The structure of the paper is as follows. The following Section (II) identifies the

character of microeconomic reform policy in Australia and reports the outcomes

anticipated from estimates of the contribution of microeconomic reform to the

economy mainly based on sectoral general equilibrium (GE) and benchmarking

methodologies. In Section III the key methodology used by the PC to evaluate the

aggregate outcomes over time as related to peak to peak MFP measures for the market

sector is compared with alternative five year averages. The methodology is then

applied to the data for the whole economy in Section IV and the findings are

compared with those for the market sector. Section V reports the results from some

simple regression estimates, and Section VI provides the conclusion.

II Microeconomic reform policy in Australia and its outcomes

A major reason given for the support from the 1980s for microeconomic reform

policy in Australia has been that it would reap productivity gains for the apparently

underperforming Australian economy, following the British policy approach under

Thatcher. ‘Microeconomic reform’ is referred to here as the Australian policy version

of measures intended to deregulate the economy. The emphasis is on promoting

productive and allocative efficiency in the short and long run through enabling the

exercise of market forces. According to the PC (1999), microeconomic reforms are

directed ultimately at improving living standards by improving economic efficiency.

The reforms were expected to improve productivity by improving allocative

efficiency, through enhancing flexibility so that investment, employment and other

resources would be drawn to more productive activities. They would improve

technical efficiency by upgrading technologies, management and work practices

towards ‘best practice’, and gain more from specialisation and economies of scale.

Dynamic efficiency would come from upgrading skills and innovation, improved

incentives to seek out productivity improvements and the encouragement of greater

flexibility (PC 1999 p16). By contrast Quiggin finds allocative gains with little impact

on productivity and growth (Quiggin 1998a).

Quantitative evaluations of the gains from microeconomic reforms have taken a range

of approaches of which the partial and ex ante have tended to predominate. As time

has elapsed since reforms have occurred so approaches to evaluation have changed

and become more sector specific. This paper focusses on the evaluations of overall

gains based primarily on the approach taken by the Australian Bureau of Statistics and

Productivity Commission to measuring productivity growth over time.

(i) Forecasts of the impact of microeconomic reform on growth

Forecasts for the outcomes of microeconomic policy implementation give a flavour of

the level of expectation and the scale of optimism involved and the manner in which

3

these have changed. In 1994 the key policy document Working Nation referred to an

EPAC working paper which suggested that ‘existing policies and key decisions’

already then taken ‘may accelerate labour productivity growth by an average annual

amount approaching half a percentage point through to the turn of the century’

(Working Nation p21). The Industry Commission (IC, predecessor of the PC) had in

1990 produced a GE based estimate of a maximum gross 6.5 per cent added to GDP

from microeconomic reform on infrastructure areas, with the usual GE provisos

(Forsyth ed 1992 p15, citing IC 1990). Based on GE modelling of many of the

Hilmer recommendations for reform [to competition policy], the PC estimated that

Australia’s real GDP would be 5.5 per cent higher once the productivity gains, service

price rebalancing and other changes associated with the reforms had fully worked

their way through the economy assuming the achievement of world best practice

productivity levels (PC 2004 p46, citing IC 1995).’

(ii) Estimates of the overall contribution of microeconomic reform to growth

Observation based or ex post evaluations of the outcomes of microeconomic reform,

particularly at the aggregate level remain thin on the ground. The key quantification

of the overall outcome of microeconomic reform that can be characterised as ex post

or observation based is presented in productivity estimates by PC/ABS. These

findings are distinguished from forecasts or analytical predictions as in the earlier

estimates referred to above.

The PC (1999) made use of these estimates in its findings and noted ‘a marked

improvement in Australia’s rate of productivity growth in the 1990s’, in fact a record

peak. ‘Multifactor productivity (MFP, ‘combined capital and labour productivity’)

grew at 2.4 per cent a year from 1993-94 to 1997-98, compared with an average of 1.2

per cent a year from 1964-65 to 1993-94’ (PC 1999 pxvii). This was seen as a

reversal in a decline in productivity growth since the late 1970s which helped restore

the rate of growth of average living standards in the 1990s. It reversed Australia’s

long term poor performance compared with other high income countries, decline in

capital productivity, and the slower post War productivity catch up. The PC argued

this was most attributable to capital productivity movements arising from diminishing

returns to capital from capital deepening, along with increases in capital productivity

due to improvements in overall efficiency arising from ‘better allocation of

investment, greater specialisation, and better management practices and work

arrangements’ (PC 1999 ppxix-xx). It was argued that 0.4 of the 2.4 per cent

productivity increase for 1993-4 to 1997-98 was due to changes in industry

composition, as employment moved away from traditional industry including utilities

towards services, and investment moved from buildings towards computers and

telecommunications (PC 1999 ppxxvi-xxvii). Adoption of new technologies had

accelerated since the mid 1980s but the direct effect on productivity as measured was

muted. The workforce had become better educated according to school retention rates

and an increased emphasis on skills and training (PC 1999 ppxxix-xxx).

Measurement error was not a likely source of the measured productivity increase (PC

1999 pxxxvi). It was argued that the productivity surge would not have happened

without the reforms (PC 1999 pxxxix). According to the PC 2004 ‘Australia’s

productivity surge in the 1990s represented a significant break from past trends’ (PC

2004 p43).

4

Parham (2002) supported the PC’s position that the productivity surge was promoted

by microeconomic reform. Quiggin (2004) argued that the noncyclical productivity

increases of the 1990s were not large and the returns to microeconomic reform were

patchy.

III Productivity estimates for Australia

The basis for the finding on productivity growth rates is examined from the standpoint

of what is regarded as the key measure, the ABS data presented in PC 1999 and

updated in the PC’s Review of National Competition Policy Reforms (2004) (draft)

and (2005) (final).

The PC made use of productivity estimates based on ‘improved’ measurements of

output, capital inputs and productivity from the ABS in order to examine aggregate

trends in productivity performance (PC 1999 p23, citing ABS 1999 Feature Article).

The productivity measure is calculated for the ‘market sector’ which is quoted to be

about 62 per cent of GDP in 2002-03. This was done on the grounds that aggregate

output can be meaningfully measured for productivity calculations in the market

sector because the ‘non market sector includes areas such as public administration and

defence where outputs are normally measured in terms of expenditures’ (PC 1999

p23, footnote), and is in line with the agreed OECD approach of recent years.

The productivity estimates presented in PC 1999 were ABS (‘experimental’)

estimates of ‘multifactor productivity’ (MFP) (ABS 1999 p8). ‘MFP statistics

provide a measure of changes in the efficiency of production. MFP is the ratio of the

measure of output to two or more factor inputs. In this case a combined measure of

labour and capital inputs is used to obtain the measure of MFP. MFP represents that

part of the change in production that cannot be explained by changes in the measured

inputs’ (ABS 1999 p14). The ABS indicates that because the inputs measured are

capital and labour, ‘not all changes in all inputs are taken into account’ so that MFP is

a better term than total factor productivity. The data and methodology by which the

MFP measure is obtained is returned to later.

(i) Periodisation

The annual average growth rates shown in Table 1 are based on a period from

1964-65 to 2003-04 ie 40 years. This period is partitioned into periods ‘identified by

the ABS as productivity cycles – from productivity peak to productivity peak’ (PC

1999 pp23-24). The periods are thereby of unequal length described as 1964-65 to

1968-69 (5 years), 1968-69 to 1973-74 (5 years), 1973-74 to 1981-82 (8 years), 1981-

82 to 1984-85 (3 years), 1984-85 to 1988-89 (4 years), 1988-89 to 1993-94 (5 years),

1993-94 to 1998-99 (5 years) and 1998-99 to 2003-04 (5 years).

The source data provided in index form in spreadsheet 5204022 from ABS Cat 5204.0

up to 2003-04 is shown in Chart 1. The peak to peak basis for the PC/ABS

periodisation is not always pronounced in the MFP index series.

5

Chart 1 Annual average output, total inputs and MFP, market sector 1964-65 to

2003-04, index 2002-03=100

1998-99

1993-94

1988-891985-86

1981-821973-74

1968-69

0.0

20.0

40.0

60.0

80.0

100.0

120.0

1964

-65

1965

-66

1966

-67

1967

-68

1968

-69

1969

-70

1970

-71

1971

-72

1972

-73

1973

-74

1974

-75

1975

-76

1976

-77

1977

-78

1978

-79

1979

-80

1980

-81

1981

-82

1982

-83

1983

-84

1984

-85

1985

-86

1986

-87

1987

-88

1988

-89

1989

-90

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2002

-03=

100

Market output Market MFP Market total inputs

Source: ABS Cat 5204.0 spreadsheet

The MFP growth rates measures for each period are an average of the annual average

MFP growth figures over that period (apparently excluding the starting year for each

period where it is included in the previous period). The periodisation is itself

dependent on the calculation of MFP which is clearly subject to the impact of variable

capacity utilisation on the combined inputs measure among other things. The effect

of the presentation of the different period lengths is to favour the annual productivity

growth measures within the shorter periods relative to those years in the longer

periods. In particular the long period in the 1970s after the oil price shock is de

emphasised. Moreover the approach is sensitive to end periods which are not

necessarily peak to peak, and any findings for the influence of microeconomic reform

are sensitive to the recent end data point. Addressing cyclicality is a well known

problem, and the approach to periodisation taken here appears somewhat arbitrary at

best. Periodisation in such a manner also makes cross country comparison difficult in

that it is specific to Australia.

As PC 1999 indicated there is no coincidence between regime changes or stages with

regard to microeconomic reform. Of course these are difficult to characterise in

aggregate. There is no particular reason for assuming the impact of microeconomic

reforms would be reflected in short period peak to peak productivities over time. The

PC 1999 Figure 3.1 presented the average productivity increases for the above periods

to 1997-98 (PC 1999 p24). The data for PC 1999 Figure 3.1 (from ABS Cat 5204.0)

are reproduced in Table 1 in the third, fourth and fifth columns. The two most recent

periods, 1993-94 to 1998-99, and 1998-99 to 2003-04 are updated from the ABS Cat.

6

Table 1: Peak to peak average annual productivity growth rates, per cent,

market sector

Period Number

of years

Inputs

ave

annual %

growth

rate

MFP

ave annual

% growth

rate

Inputs + MFP

= output

ave annual %

growth rate

MFP/Output

growth rate,

per cent

1964-65 to 1968-69 5 3.8 1.3 5.1 25.5

1968-69 to 1973-74 5 2.9 1.6 4.5 35.6

1973-74 to 1981-82 8 1.0 1.1 2.1 52.4

1981-82 to 1984-85 3 0.9 0.9 1.8 50.0

1984-85 to 1988-89 4 3.5 0.6 4.1 14.6

1988-89 to 1993-94 5 1.1 0.7 1.8 38.9

1993-94 to 1998-99 5 2.6 2.0 4.6 43.5

1998-99 to 2003-04 5 2.2 1.0 3.2 31.3

Source: ABS 5204.0, after PC 1999 T3.1, p24.

nb average excludes the starting year for each period where it is included in the previous period

The last column shows the ratio of multifactor productivity growth to total output

growth ie the residual after the contribution of input growth is removed. Chart 2

presents the data set out in Table 1, based on PC 1999 Figure 3.1 and updated.

The annual average multifactor productivity (MFP) growth shown in Table 1 is 2.0

per cent for the five year period 1993-94 to 1998-99, while inputs grew 2.6 per cent in

that period. While this might be taken to indicate a surge in productivity growth in

the 1990s, it was followed by a growth rate of 1.0 per cent in MFP and a growth rate

of 2.2 per cent in output for the period 1998-99 to 2003-04. The annual average

output growth rate of 4.6 per cent reported for the five year period 1993-94 to 1998-

99 is no more than the average for the first two five year periods shown, from 1964-65

to 1973-74, while the MFP growth rate is around half a per cent higher. It should be

noted that the MFP figure of 2.6 per cent growth rate reported in PC 1999 for the four

year period 1993-94 to 1997-98 was taken as an indication of an unprecedented

increase in productivity growth at the time, however the inclusion of the year 1998-99

in later estimates apparently reduced this back to a growth rate of 2.0 per cent (ABS

1999 p17).

At the same time the growth rate of inputs has fluctuated widely across the periods.

Input growth rate was 3.5 per cent in 1984-85 to 1988-89 falling to 1.1 per cent in the

following period 1988-89 to 1993-94, before recovering to 2.6 per cent growth rate in

the last period 1993-4 to 1998-99.

7

Chart 2 Average annual growth rate of inputs, MFP and output, market sector,

1964-65 to 2003-04, peak to peak, per cent.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1964-65 to

1968-6

9

1968-69 to

1973-7

4

1973-74 to

1981-8

2

1981-82 to

1984-8

5

1984-85 to

1988-8

9

1988-89 to

1993-9

4

1993-94 to

1998-9

9

1998-99 to

2003-0

4

avera

ge a

nn

ual

per

cen

t

Market inputs growth Market MFP growth Market inputs+MFP = output

Source: ABS 5204.0, after PC 1999 T3.1, p24.


The period growth rate averages for the 40 year period shown in Table 1 may be re

calculated to correspond to 5 year intervals, (again as in the apparent PC approach of

excluding the starting year for each period where it is included in the previous period).

There is no good reason for assuming that cyclicality issues relating to changes in

MFP and capacity utilisation are any more serious in a five year periodisation than in

the peak to peak averages reported by the PC. The five year recalculated annual

averages are shown in Table 2.

8

Table 2. Five year average annual productivity growth rates market sector

1964-65 to 2003--04.

Period Number

of years

Inputs

ave annual

% growth

rate

MFP

ave

annual %

growth

rate

Inputs + MFP =

output

ave annual %

growth rate

MFP/Output

growth rate,

per cent

1964-65 to 1968-69 5 3.8 1.3 5.2 25.7

1968-69 to 1973-74 5 2.9 1.6 4.6 35.3

1973-74 to 1978-79 5 0.2 1.6 1.8 88.5

1978-79 to 1983-84 5 1.3 0.2 1.5 10.5

1983-84 to 1988-89 5 3.5 1.1 4.6 24.5

1988-89 to 1993-94 5 1.1 0.7 1.8 40.6

1993-94 to 1998-99 5 2.6 2.0 4.6 43.0

1998-99 to 2003-04 5 2.2 1.0 3.2 30.8

Source: Derived from ABS 5204.0 spreadsheet


As shown in Chart 3, the simple evening out of period lengths confirms the general

robustness of the overall growth rates figures to some change in period length used for

averaging. The key difference between the PC 1999 period growth rates averages and

the five year growth rates averages is the sensitivity of the MFP growth rates averages

to period chosen. The PC periodisation of Chart 2 gives the impression of a fairly

stable MFP growth rates average over all periods with a contrasting jump in the

period 1993-94 to 1998-99, before falling back in the following period. The five year

periodisation reveals a more volatile MFP growth rate, in particular the impact of the

recession of the 1970s where a plunge in input growth rate is then followed by a

plunge in MFP growth rate, followed by recovery in the mid 1980s. It indicates the

volatility to which MFP growth is subject and the late 1990s figure does not stand out

so much.

9

Chart 3 Average annual growth rates of inputs, MFP and output, market sector,

1964-65 to 2003-04, five year period, per cent.

0.0

1.0

2.0

3.0

4.0

5.0

6.0

1964-65 to

1968-6

9

1968-69 to

1973-7

4

1973-74 to

1978-7

9

1978-79 to

1983-8

4

1983-84 to

1988-8

9

1988-89 to

1993-9

4

1993-94 to

1998-9

9

1998-99 to

2003-0

4

Market inputs growth Market MFP growth Market inputs+MFP = output



The impression of somewhat different pattern of contribution of MFP growth to

output growth in the different periodisation is reinforced in Chart 4 and Chart 5.

However the cyclicality is evident in both, subject to noise.

Notably input growth rates also track output growth rates closely. The impression

from period to period is of MFP as an apparently relatively stable cyclical residual

from output growth after input growth which is closely correlated with output growth

is taken out. Even on the PC 1999 figures for the last period it is too soon to judge

these as a significant departure from earlier periods.

10

Chart 4 MFP growth rate share of total output growth rate, annual average

market sector 1964-54 to 2003--04, peak to peak periods, per cent.

0.0

15.0

30.0

45.0

60.0

75.0

90.0

1964-65 to

1968-6

9

1968-69 to

1973-7

4

1973-74 to

1981-8

2

1981-82 to

1984-8

5

1984-85 to

1988-8

9

1988-89 to

1993-9

4

1993-94 to

1998-9

9

1998-99 to

2003-0

4

avera

ge a

nn

ual

per

cen

t

Market MFP/ output growth

Source: PC 1999 T3.1, p24, ABS 5204.0


Chart 5 MFP growth rate share of total output growth rate, annual average

market sector 1964-54 to 2003-04, five year periods, per cent

0.0

15.0

30.0

45.0

60.0

75.0

90.0

1964-65 to

1968-6

9

1968-69 to

1973-7

4

1973-74 to

1978-7

9

1978-79 to

1983-8

4

1983-84 to

1988-8

9

1988-89 to

1993-9

4

1993-94 to

1998-9

9

1998-99 to

2003-0

4

Market MFP/ output growth



As previously indicated, the overall the biggest difference between the PC period and

5 year average growth rates is in the treatment of the decade or so from 1973-74 to the

11

mid 1980s. The figures are sensitive to the data split of 1978-79, so that the low

growth rate of the mid 1970s is more apparent in the five year period averages than it

is in the peak to peak periodisation.

This is borne out by Chart 6, Chart 7 and Chart 8 which show annual average growth

rates in inputs, MFP and output respectively for the period 1964-65 to 2003-04. Each

chart compares three measures for the series. These are the PC peak to peak period

average growth rates, five year average growth rates, and the actual annual growth

rates data points from ABS Cat 5204.0. It is worth noting in Chart 6 that the input

average growth rates for peak to peak and five year averages coincide after 1985-86.

In Charts 7 and 8 the MFP and output average growth rates respectively for peak to

peak and five year averages coincide after 1989-90. This hints at MFP and output

growth as led by input growth.

On the basis of the overall picture from these data it is a leap to connect a ‘surge’ in

the four year period up to 1997-98 with microeconomic reform, and the PC 1999

rightly urged caution. The de-emphasization of this format of presentation since then

would confirm that the surge may be a temporary state and that microeconomic

reform is hard to separate out from the many factors at work in the data.

Insofar as a surge in productivity can be accepted, an alternative explanation may be

found in the rapid increase in the IT share of the economy in that last period among

other things. This is supported by the reversal in the decline in capital productivity

found for that last period.

Chart 6 Average annual growth rate in inputs, market sector, and ‘peak to

peak’ and five year period averages 1964-65 to 2003-04, per cent

-8

-6

-4

-2

0

2

4

6

8

10

12

1964-6

5

1965-6

6

1966-6

7

1967-6

8

1968-6

9

1969-7

0

1970-7

1

1971-7

2

1972-7

3

1973-7

4

1974-7

5

1975-7

6

1976-7

7

1977-7

8

1978-7

9

1979-8

0

1980-8

1

1981-8

2

1982-8

3

1983-8

4

1984-8

5

1985-8

6

1986-8

7

1987-8

8

1988-8

9

1989-9

0

1990-9

1

1991-9

2

1992-9

3

1993-9

4

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

An

nu

al avera

ge p

er

cen

t

Inputs, % growth, PC market 5yr inputs market Ann growth in inputs market

Source: Derived from ABS 5204.0 spreadsheet and PC 1999 F3.1 p24

12

Chart 7 Average annual growth rates in MFP, market sector, and ‘peak to peak’

and five year period averages 1964-65 to 2003-04, per cent

-8

-6

-4

-2

0

2

4

6

8

10

12

1964-6

5

1965-6

6

1966-6

7

1967-6

8

1968-6

9

1969-7

0

1970-7

1

1971-7

2

1972-7

3

1973-7

4

1974-7

5

1975-7

6

1976-7

7

1977-7

8

1978-7

9

1979-8

0

1980-8

1

1981-8

2

1982-8

3

1983-8

4

1984-8

5

1985-8

6

1986-8

7

1987-8

8

1988-8

9

1989-9

0

1990-9

1

1991-9

2

1992-9

3

1993-9

4

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

an

nu

al avera

ge p

er

cen

t

MFP growth, PC market 5yr mfp market Ann growth in MFP market


Chart 8 Average annual growth rates in output, market sector, and ‘peak to

peak’ and five year period averages 1964-65 to 2003-04, per cent

-8

-6

-4

-2

0

2

4

6

8

10

12

1964-6

5

1965-6

6

1966-6

7

1967-6

8

1968-6

9

1969-7

0

1970-7

1

1971-7

2

1972-7

3

1973-7

4

1974-7

5

1975-7

6

1976-7

7

1977-7

8

1978-7

9

1979-8

0

1980-8

1

1981-8

2

1982-8

3

1983-8

4

1984-8

5

1985-8

6

1986-8

7

1987-8

8

1988-8

9

1989-9

0

1990-9

1

1991-9

2

1992-9

3

1993-9

4

1994-9

5

1995-9

6

1996-9

7

1997-9

8

1998-9

9

1999-0

0

2000-0

1

2001-0

2

2002-0

3

2003-0

4

an

nu

al avera

ge p

er

cen

t

output growth, PC market 5yr output market Ann output growth market


IV The measure of productivity: MFP market and whole economy

Attention is now turned to the issue of the measure of ‘multifactor productivity’ used

by PC/ABS. The measure is the ratio of ‘market’ output growth rate to the growth

rate in a combination of labour and capital input. The ABS estimates make use of

neoclassical assumptions in which the estimates of input growth on a translog

13

production function with zero economies of scale, with the marginal products of

capital and labour reflecting their market prices (ABS 1999 p14, ABS 2000 p369).

That is, the inputs growth rates measure is the geometric average of the increase in

capital services and hours worked each year, weighted by the changes in the shares

paid to capital and to labour out of income respectively from one year to the next:

It/ It-1 = (Kt / Kt-1)wkt (Lt / Lt-1)

wlt

where It is the combined inputs index in year t, Kt is the index of real capital input in

year t, and Lt is the index of real labour input in year t. Here wkt and wlt are the

respective average cost shares of capital and labour in years t and t-1. These costs

shares are an average measure of the output elasticity with respect to each factor

assuming constant returns to scale and marginal products of capital and labour equal

to their respective market prices.

This is a Tornqvist Divisia index which conforms to the translog specification. It

captures variation in the elasticity of substitution between the two inputs each year as

the input proportions and marginal products change, assuming constant returns to the

inputs.

The data are based on new estimates for ABS Cat 5204.0 from 1997 including new

chain indices developed for measuring output and capital input (ABS 1999 p14).

Changes to capital stock measurements were intended to take account of IT stock, and

this merits consideration elsewhere. According to ABS the revisions resulted in

lowered estimates of the contribution of capital services, and the downward revisions

of estimates of capital productivity growth rates caused MFP to be revised downward

from earlier estimates (ABS 1999 p17).

(i) Market sector

Another issue is the partial nature of the measure for the market sector. ‘The ‘market

sector’ is a special industry grouping comprising the following industries:

Agriculture, forestry and fishing; Mining; Manufacturing; Electricity, gas and water;

Construction and wholesale trade; Retail Trade; Accommodation, cafes and

restaurants; Transport and storage; Communication services; Finance and insurance;

and Cultural and recreational services.’ The ABS indicates that this ‘industry

grouping relates broadly to marketed activities for which there are satisfactory

estimates of the growth in the volume of output. .. ‘Whereas the non-market sector

comprises Property and business services; Government administration and defence;

Education; Health and community services; Personal and other services; and

Ownership of dwellings’ (ABS 2000 p363). The ABS indicates that MFP measures

are not presented for these industries because the volume estimates of value added are

derived using input data as measures of output which effectively assumes no change

in productivity. The ABS recognises that the measures are imperfect owing to the

inclusion of output measured by inputs eg in administration services in the market

sector and of output which is properly measured in the non market sector.

However the view taken in this paper is that the exclusion of industries identified as

part of the non-market sector warrants examination. The exclusion is problematic at

the aggregate level. The approach cannot take account of the extent to which the

sectors are integrated in their impact on performance at the national level. The effect

14

of interaction and spillovers between industries in the non-market and market sectors

calls for investigation. Moreover microeconomic reform measures figure large in

these interactions. Microeconomic reform has been expected to improve performance

in both sectors.

Accordingly for the purpose of this paper whole economy measures of combined

inputs growth, output growth and MFP are obtained in from the same data sources as

the measures above and compared with those for the market sector, see Appendix

table. An impression of the size of the market sector relative to GDP can be gained

from Chart 9 which presents chain index series for GDP (ABS spreadsheet 506030)

and the market sector output gross value added (from the ABS Cat 5204.0 spreadsheet

Indexes of productivity and related measures as above). The benchmark for market

output is obtained by assuming that market output is 62 per cent of GDP in 2002-03

as quoted by ABS and PC. The market output figures for earlier years are obtained by

weighting that figure by the market output index figure for that year. These estimates

must be treated with caution in that chain indexes are not compiled on an additive

basis.

Chart 9 GDP chain index and output market sector 1964-64 to 2003-04, chain

2002-03

0.0

100000.0

200000.0

300000.0

400000.0

500000.0

600000.0

700000.0

800000.0

900000.0

1964

-65

1965

-66

1966

-67

1967

-68

1968

-69

1969

-70

1970

-71

1971

-72

1972

-73

1973

-74

1974

-75

1975

-76

1976

-77

1977

-78

1978

-79

1979

-80

1980

-81

1981

-82

1982

-83

1983

-84

1984

-85

1985

-86

1986

-87

1987

-88

1988

-89

1989

-90

1990

-91

1991

-92

1992

-93

1993

-94

1994

-95

1995

-96

1996

-97

1997

-98

1998

-99

1999

-00

2000

-01

2001

-02

2002

-03

2003

-04

ch

ain

$A

20

02-0

3=

100

GDP 5206030 chain 2002-03 A$m market output calc from total GDP

Sources: derived from ABS spreadsheet 506030 Cat 5204.0 spreadsheet Indexes of

productivity and related measures.

(ii) Total input and MFP series for the whole economy

The methodology for obtaining the market sector combined input series was applied

to obtain total input series for the whole economy. This involved making use of chain

index based aggregate capital and labour series for the whole economy. Income shares

of capital and labour were obtained from ABS, as provided by employee

compensation for labour, and gross operating surplus (GOS) and gross mixed income

for the self employed (GMI) (noting very small labour component) taken as the share

of capital. A combined input index was obtained for the whole economy in the

manner described above for the market input series (Capital series from ABS

15

spreadsheet 5204069, labour from ABS spreadsheet 6202003,and payments shares for

labour (compensation of employees) and capital (GOS+GMI) derived from ABS

spreadsheets 5204057 and 5204026). Average annual MFP growth was obtained for

the whole economy as the difference between average annual GDP growth and total

input growth. The data are set out in APPENDIX 1

Table 1 and Table 2. Chart 10 presents these data for the whole economy and may be

compared with Chart 1 for the market sector. Of greatest note is the relatively slow

growth in whole economy MFP, with most growth in the whole economy apparently

emanating from the growth in inputs.

Chart 10 Annual average output, total inputs and MFP, whole economy, 1964-

65 to 2003-04, index 2002-03=100

0

20

40

60

80

100

120

1958

-59

1960

-61

1962

-63

1964

-65

1966

-67

1968

-69

1970

-71

1972

-73

1974

-75

1976

-77

1978

-79

1980

-81

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

-97

1998

-99

2000

-01

2002

-03

2002-0

3=

100

total inputs index total MFP index GDP index

Chart 11 sets out the data from Chart 1 and Chart 10 after rebasing at 1964-65=100

for purposes of clarity.

16

Chart 11 GDP, total inputs and MFP indexes for the whole economy and for the

market sector, 1964-65 to 2002-03, 1964-65=100.

0

50

100

150

200

250

300

350

400

1958

-59

1960

-61

1962

-63

1964

-65

1966

-67

1968

-69

1970

-71

1972

-73

1974

-75

1976

-77

1978

-79

1980

-81

1982

-83

1984

-85

1986

-87

1988

-89

1990

-91

1992

-93

1994

-95

1996

-97

1998

-99

2000

-01

2002

-03

1964-6

5=

100

total inputs index total MFP index GDP index Market MFP Market output Market inputs

Source: derived from ABS spreadsheet data from Cat 5204 and 6202, rebased at 1964-65=100.

The first two series from the bottom up in Chart 11 are indexes for total economy

MFP and market MFP respectively. The estimates for total MFP do not increase as

rapidly overall as those for market sector MFP and are less volatile. Total MFP does

not grow as fast as market sector MFP in the 1990s and appears to flatten after that.

That is the extent of growth in market sector MFP is not reflected in whole economy

MFP which appears to have grown much more steadily and slowly overall at around

half the rate of market sector growth. The middle two series in Chart 11 show total

economy inputs as growing more rapidly and smoothly than market sector inputs and

both appear to increase at similar rates in the 1990s. The impression is that the

cyclical movements in labour inputs which are around half the combined inputs

measure are more manifest in the market inputs measure than in that for the whole

economy. The peak to peak variation is even less evident for the whole economy than

for the market sector.

The annual growth rates data based on the indexes for the whole economy are

averaged according to the periodisation for the peak to peak average growth rates for

the market sector in Table 1 and the five year average growth rates in Table 2,

presented in Table 3 and Table 4 respectively.

17

Table 3 Whole economy peak to peak average annual productivity growth rates,

per cent

Period Number

of years

Inputs,

ave annual

% growth

rate

MFP

ave annual

% growth

rate

Inputs + MFP

= output

ave annual %

growth rate

MFP/Output

growth rates,

per cent

1964-65 to 1968-69 5 4.3 1.1 5.4 26.23

1968-69 to 1973-74 5 3.8 0.6 4.5 16.48

1973-74 to 1981-82 8 2.3 0.4 2.8 17.68

1981-82 to 1984-85 3 2.1 0.5 2.6 23.31

1984-85 to 1988-89 4 3.7 0.3 4.0 8.23

1988-89 to 1993-94 5 1.7 0.6 2.3 33.37

1993-94 to 1998-99 5 2.5 1.9 4.4 75.24

1998-99 to 2002-03 4 2.6 0.6 3.2 24.80

Source: derived from ABS spreadsheet data from Cat 5204 and 6202


Chart 12 and Chart 13 present the whole economy data in the same manner as Chart 2

and Chart 3 for market sector data. Again the main difference between the ‘peak to

peak’ and five year average periodisations is in the distribution of contributions to

growth for the period from 1973-74 through to the mid 1980s. The volatility in MFP

is more pronounced and the MFP growth for the 1993-94 to 1998-99 period stands out

as exceptionally high before it falls back to a level representative of the whole period

in 1998-99 to 2002-03. This suggests the high value for the 1993-94 to 1998-99

period may be a one off. While there may have been aspects of microeconomic

reform implementation which contributed to the high level for that period, it does not

show portent for an ongoing improvement in productivity which was anticipated to

result from microeconomic reform. Nor is there any reason to take the view that the

MFP growth is not sustained due to microeconomic reform not having gone far

enough. Clearly there are other factors at work for the period 1993-94 to 1998-99 and

these warrant investigation, particularly the role of the expansion in ICT capital and

activity in that period. Gruenwald et al (2001) found that the accumulation of ICT

capital was important in explaining the ‘impressive, structural acceleration of labor

productivity after 1995. They found that two thirds of the capital deepening which

explained half of labour productivity growth in the late 1990s would be due to ICT

capital, above the Euro average (Gruenwald et al 2001).

18

Chart 12 Average annual growth rates of inputs, MFP and GDP, 1964-65 to

2002-03 ‘peak to peak’ period, per cent



Table 4 Five year average annual productivity growth rates whole economy, per

cent

Period Number

of years

Inputs

ave annual

% growth

rate

MFP

ave annual

% growth

rate

Inputs + MFP

= output

ave annual %

growth rate

MFP/Output

growth rates,

per cent

1964-65 to 1968-69 5 4.3 1.1 5.4 26.23

1968-69 to 1973-74 5 3.8 0.6 4.5 16.48

1973-74 to 1978-79 5 1.9 0.6 2.5 30.23

1978-79 to 1983-84 5 2.4 0.0 2.4 1.19

1983-84 to 1988-89 5 3.7 0.6 4.3 16.07

1988-89 to 1993-94 5 1.7 0.6 2.3 33.37

1993-94 to 1998-99 5 2.5 1.9 4.4 75.24

1998-99 to 2002-03 4 2.6 0.6 3.2 24.80



19

Chart 13 Average annual growth rates of inputs, MFP and GDP whole

economy, 1964-65 to 2002-03, five year period, per cent.



The key aspects to be considered in these data are the influence of cyclicality and

stochastic aspects. Preliminary investigation by regression is reported in the next

section.

V Estimation of MFP for market sector and whole economy

For this purpose some simple regression estimates are obtained, based on the relation

between the growth in combined inputs and output for the market sector and for the

whole economy from the data above. The form is the growth accounting relation

implied between inputs and output from the above analysis, with the relation between

labour and capital inputs specified at the outset by a nonstochastic translog algorithm

as described above.

The equation for estimation is

qi = β 0i + β 1i xi + ui (1)

where

qi is annual growth in the output index where i = 1 for market sector and i=2 for the

whole economy, and

xi is annual growth in the combined input index where i = 1 for market sector and i=2

for the whole economy.

The growth rates series for market output, market inputs, GDP and whole economy

inputs are stationary according to ADF test results, although the efficiency of the tests

remains limited for this sample size of less than 40 observations.

20

The results of OLS estimation of equation (1) are presented in Table 5.

Table 5 Results from equation (1) by OLS Equation

(1)

β 0i

estimate

t stat β 1i

estimate

t stat HA:v

β 1i ≠ 1

t stat:*

critical t,

2 tailed

5% level,

n=38

R2

Durbin

Watson

Market

0.90 1.51 1.13 5.12 0.60 2.04 0.422 2.32

Total

economy

0.48 0.76 1.09 5.23 0.42 2.04 0.432 1.92

* t statistic is (β 1i – 1)/SE β 1i.

The equations were estimated for the available common sample of 1965-66 to

2002-03. The Durbin Watson test results (n=39, k=2, DL=1.38, DU=1.60) indicate that

the null of no autocorrelation is not rejected for both equations i.e. the residual of year

t is not correlated with the residual from year t-1. However the significance of the

constant term in the market equation only at the 10 per cent level (of t=1.51) and the

statistical insignificance of the constant term for the whole economy equation point to

misspecification of both. ADF tests on the residuals of both equations indicate

relationships which are cointegrating. (Test results available on request.)

The market specification appears to suggest that a one percent growth in market

inputs adds 1.13 per cent to market output, while the total economy specification

indicates a slightly smaller impact of 1.09 per cent. That is the increment to growth

over and above constant returns to inputs is around 13 per cent trend unattributed

productivity in the market specification and about 9 per cent in the whole economy

equation. This is not borne out by testing H0 that β 1i = 1 with HA that β 1i ≠ 1. The t

statistic is (β 1i – 1)/SE β 1i. H0 was not rejected according to the results in the sixth

and seventh columns of Table 5 equation (1) for both the market sector and whole

economy respectively. This specification appears not to inform about the role or

drivers of productivity and indicates if anything that the growth in output advances

proportionately to the growth in inputs.

Both the coefficient on inputs and the stochastic component may be functions of

cyclical factors of which these specifications fail to take account. Some of these are

buried in the total inputs measure as the relation between capital and labour changes

with cyclical capacity utilization. This is supported by the constant term and the

slightly larger magnitude for the inputs coefficient in the market equation where

cyclical impacts may be more manifest. Brooks et al (2000) also indicate the

importance of cyclical factors in estimating productivity in the market sector.

Chart 14 and Chart 15 present the PC/ABS MFP series and the residuals from

equation (1) above for the market sector and the whole economy respectively. The

vertical difference between the two series in each chart corresponds to the value of the

constant term and suggests a source of greater than constant returns due to other

factors. The overall variation reflects unaccounted for cyclicality. The upward blip of

the 1990s is shown, in particular the unusual climb of the series’ in the whole

economy chart. Chart 14 and Chart 15 cannot reveal any relative divergence between

output and combined inputs in that period.

21

Chart 14 Annual average MFP growth, point estimates and equation (1)

residuals for market sector 1965-66 to 2002-03

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.001966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Per

cen

t

Market equn residuals Market MFP

Source: data as above, and retrieved residuals from equn 1a above.

Chart 15 Annual average MFP growth, point estimates and equation 1b

residuals for whole economy 1965-66 to 2002-03

-6.00

-4.00

-2.00

0.00

2.00

4.00

6.00

8.00

1966

1967

1968

1969

1970

1971

1972

1973

1974

1975

1976

1977

1978

1979

1980

1981

1982

1983

1984

1985

1986

1987

1988

1989

1990

1991

1992

1993

1994

1995

1996

1997

1998

1999

2000

2001

2002

2003

Per

cen

t

Total economy equn residuals Total MFP

Source: data as above, and retrieved residuals from equn 1b above.

A simple ECM was also estimated as an approach taken to address the issues shown

in the linear estimation. This is

22

qi = β 0 i + β 1 i x i + β 2 i Q i t-1 + β 3 i X i t-1 + u i (2)

where notation is as for equation (1), and also

Q i t-1 is the level of output index where i = 1 for market sector and i=2 for the

whole economy (nb this is the levels variable corresponding to output growth rate q,

lagged by one year)

X i t-1 is the level of the combined input index where i = 1 for market sector

and i=2 for the whole economy (nb this is the levels variable corresponding to inputs

growth rate q, lagged by one year)

The results of OLS estimation are presented in Table 6.

Table 6 Results from equation (2) by OLS Equation

(2)

β 0i

estimate

t stat β 1i

estimate

t stat β 2 i

estima

te

t

stat

β 3i

estimate

t

stat

R2

Durbin

Watson

Market

-17.42 2.34 1.29 5.86 0.71 2.51 -0.54 2.51 0.51 2.09

Total

economy

-1.72 0.80 1.34 5.43 -0.05 0.53 0.075 0.62 0.48 1.99

Again for both market and total economy estimates for equation (2) indicated

relations which were cointegrating according to ADF tests of the residuals. Perusal of

the coefficients indicated the growth rates linear form might be the more correct one

for the whole economy, as the statistical insignificance and small magnitude of the

last two terms in equation (2) for the whole economy did not suggest a process of

dynamic adjustment from year to year toward a long run equilibrium for the economy.

However the results for the market equation insofar as they can be accepted point to a

potential adjustment process. This process could somehow be mediated through the

rest of the economy.

Clearly the estimations indicate that a fuller investigation is warranted of whole

economy impacts. That would include a separation of capital and labour inputs and a

more careful modelling of technological change particularly with respect to ICT.

Proper investigation of cyclicality for the whole economy is called for as well as has

been done earlier for the market sector (Brooks et al 2000). Systematic hypothesis

testing for robustness of form including structural break to model recent impacts is

required.

VI Conclusion

The increase in productivity growth in the 1990s as measured has been taken as an

indication of the success of microeconomic reform policy in providing for sustained

productivity increases, at least prior to a subsequent downturn. The impact of

microeconomic reform on the Australian economy as indicated by aggregate

productivity growth estimates was investigated in this paper.

Ex post observation based aggregate evaluations are scarce and have been largely

focussed on the Productivity Commission / Australian Bureau of Statistics estimates

of recent increasing productivity for the Australian economy. These estimates are

based on data since the mid 1960s, a period which excludes the earlier post War

23

growth spurt in the Australian economy. The PC/ABS estimates of ‘multifactor

productivity’ growth (MFP) for the ‘market’ sector making up around 62 per cent of

the economy were examined in detail. The MFP measure is based on a point estimate

average annual growth residual after a translog combined inputs measure for the

contribution of capital services and labour is accounted for. Period estimates based on

‘peak to peak’ measured productivity make the MFP increase in the 1990s appear

more stark relative to the apparent stability in other periods. Five year period

estimates highlight the variability in MFP over time, and the role of cyclical effects in

productivity. The peak to peak approach does not appear to resolve cyclical issues in

the productivity measures which affect findings for the impact of microeconomic

reform.

The market sector MFP measures are compared with those reconstructed in this paper

using data for the whole economy. It is clear that any estimates of productivity need

to take account of whole economy interactions. This is all the more the case given the

acknowledgement that cost based output measures are applied to some activities in all

sectors of the economy. Productivity cannot be assumed to be the exclusive province

of any one portion of the economy. An economy wide indicator seeks to capture

external impacts throughout the economy. It is these areas in which microeconomic

reform should have key effects.

The whole economy estimates support the spike in ‘multifactor’ productivity growth

shown in the market sector data in the 1990s. The few subsequent data support a

return to levels comparable with previous years. They do not at this time provide

evidence of a sustained increase with a microeconomic reform as a factor. Simple

regression estimates support the point findings. The attribution in other work of a one

off increase of 0.5 per cent in growth in the 1990s does not seem unreasonable.

However to attribute this to microeconomic reform is another matter. The extent to

which the 1990s measures reflect commercial valuation of previously non market

output needs further consideration. Sources are more likely to be found in the role of

the ICT sector, once cyclical factors are more closely attended to. Further attention to

international comparisons of performance related to reform is also called for.

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Article pp8-17 Upgrade of capital stock and multifactor productivity estimates

ABS 2000 Cat 5216.0 Australian System of National Accounts Concepts Sources and

Methods

ABS Cat 5204.0 spreadsheet Indexes of productivity and related measures 5204022,

spreadsheets 5204026, 506030, 5204057, 5204069 and 6202003

Brooks R, P Gruenwald, J Lee and R Salgado 2000 Australia; Selected issues and

statistical appendix February IMF Country Report 00/24

24

Cashin Paul and Sam Ouliaris 2004 Key features of Australian business cycles

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de Brouwer Gordon 2003 Economic reform and growth in Australia Paper prepared

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Industry Commission 1990 Annual Report 1989-90 AGPS Canberra, cited in

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27

APPENDIX 1

Table 1: GDP chain, labour, capital, total inputs and MFP indexes 2002-03=100,

whole economy GDP chain

5206030

Total labour

6202003

Total capital

5204069

Total inputs Total

economy

MFP

1960-61 21.8 45.8 17.7 29.90 72.08

1961-62 22.1 45.9 18.7 30.74 71.05

1962-63 23.4 47.2 19.7 32.02 72.51

1963-64 25.1 48.5 20.9 33.33 74.75

1964-65 26.7 49.8 22.1 34.71 76.19

1965-66 27.3 51.4 23.3 36.28 74.51

1966-67 29.0 53.2 24.7 37.92 75.99

1967-68 30.5 54.6 26.1 39.45 76.76

1968-69 32.6 55.9 27.6 41.07 78.96

1969-70 35.0 57.9 29.2 42.90 81.12

1970-71 36.3 59.8 30.8 44.74 80.76

1971-72 37.8 60.6 32.4 46.11 81.47

1972-73 38.9 62.1 34.0 47.72 81.05

1973-74 40.6 64.0 35.6 49.55 81.46

1974-75 41.0 63.9 37.1 50.28 81.06

1975-76 42.1 64.7 38.5 51.45 81.46

1976-77 43.6 65.1 40.1 52.48 82.65

1977-78 44.0 65.3 41.7 53.43 81.96

1978-79 45.9 65.5 43.5 54.49 83.82

1979-80 47.4 67.0 45.3 56.20 83.90

1980-81 48.9 68.8 47.3 58.12 83.78

1981-82 50.4 69.6 49.5 59.65 84.17

1982-83 49.2 68.5 51.4 60.04 81.64

1983-84 51.6 69.0 53.3 61.26 83.87

1984-85 54.3 71.2 55.5 63.44 85.32

1985-86 56.7 74.1 57.7 66.05 85.47

1986-87 58.0 76.0 59.9 68.09 84.85

1987-88 61.1 78.1 62.3 70.36 86.58

1988-89 63.6 81.5 64.9 73.37 86.35

1989-90 65.9 84.6 67.5 76.21 86.24

1990-91 65.9 84.0 69.6 76.99 85.27

1991-92 66.0 82.5 71.4 77.20 85.26

1992-93 68.4 82.2 73.4 78.04 87.44

1993-94 71.1 83.8 75.4 79.86 88.81

1994-95 74.1 87.1 77.7 82.65 89.45

1995-96 77.2 89.6 80.0 85.05 90.60

1996-97 80.2 90.3 82.5 86.61 92.38

1997-98 83.8 91.4 85.2 88.50 94.52

1998-99 88.2 92.4 88.1 90.39 97.51

1999-00 91.5 94.8 91.2 93.13 98.26

2000-01 93.4 95.9 93.8 94.92 98.33

2001-02 97.0 97.8 96.6 97.24 99.77

2002-03 100.0 100.0 100.0 100.00 100.00

2003-04 103.6 na na na na

Source: ABS spreadsheets 5204069, 6202003, 5204057 and 5204026

28

Table 2 GDP chain, labour, capital, total inputs and MFP growth rates whole

economy GDP

growth per

cent

total labour

growth per

cent

total capital

growth per

cent

total inputs

growth per

cent

total economy

MFP growth

1960-61 2.66 2.93 5.93 4.38 -1.72

1961-62 1.37 0.36 5.43 2.81 -1.43

1962-63 6.22 2.88 5.50 4.17 2.06

1963-64 7.18 2.57 5.66 4.08 3.09

1964-65 6.06 2.71 5.74 4.14 1.92

1965-66 2.30 3.32 5.86 4.51 -2.21

1966-67 6.51 3.46 5.74 4.53 1.99

1967-68 5.06 2.53 5.76 4.04 1.02

1968-69 6.96 2.56 5.81 4.09 2.87

1969-70 7.19 3.41 5.70 4.46 2.73

1970-71 3.85 3.44 5.38 4.30 -0.44

1971-72 3.93 1.32 5.24 3.06 0.88

1972-73 2.98 2.37 4.89 3.49 -0.51

1973-74 4.33 3.11 4.88 3.84 0.50

1974-75 0.99 -0.11 4.01 1.48 -0.49

1975-76 2.82 1.23 4.01 2.33 0.49

1976-77 3.45 0.64 4.01 1.99 1.46

1977-78 0.98 0.25 4.03 1.81 -0.83

1978-79 4.27 0.27 4.27 2.00 2.27

1979-80 3.23 2.40 4.11 3.14 0.09

1980-81 3.26 2.59 4.53 3.41 -0.14

1981-82 3.10 1.20 4.70 2.63 0.47

1982-83 -2.35 -1.60 3.77 0.65 -3.01

1983-84 4.77 0.71 3.74 2.04 2.73

1984-85 5.29 3.20 4.02 3.56 1.73

1985-86 4.30 4.15 4.08 4.12 0.18

1986-87 2.35 2.48 3.81 3.08 -0.73

1987-88 5.36 2.82 3.90 3.33 2.03

1988-89 4.03 4.39 4.17 4.29 -0.26

1989-90 3.74 3.74 4.02 3.87 -0.12

1990-91 -0.11 -0.75 3.13 1.03 -1.13

1991-92 0.26 -1.77 2.62 0.26 -0.01

1992-93 3.65 -0.30 2.70 1.09 2.56

1993-94 3.90 1.97 2.75 2.33 1.57

1994-95 4.22 3.85 3.08 3.50 0.71

1995-96 4.18 2.85 2.95 2.89 1.29

1996-97 3.80 0.79 3.11 1.84 1.96

1997-98 4.50 1.23 3.32 2.18 2.32

1998-99 5.30 1.10 3.41 2.14 3.16

1999-00 3.80 2.62 3.53 3.03 0.77

2000-01 2.00 1.15 2.84 1.92 0.08

2001-02 3.90 1.95 3.00 2.44 1.46

2002-03 3.07 2.29 3.48 2.84 0.23

2003-04 3.63 na na na na

Source: ABS spreadsheets 5204069, 6202003, 5204057 and 5204026

economics series swp 2010/15 microeconomic reform and

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