"We welcome the sharp increase in productivity forecast in today's Intergenerational Report (IGR) and look forward to the Government's plan to achieve it," said Innes Willox, Chief Executive of the national employer association, Australian Industry Group.
"The 2026 IGR rightly notes that productivity has been the key driver of improving living standards in Australia, and will grow in importance as population growth continues to slow.
"Australia is in the midst of its longest period of stagnant productivity on record, with zero overall growth since 2019, yet the IGR maintains a historical growth assumption of 1.2% per year. With no other policy prescriptions on offer, the report has clearly cast all our economic eggs into the AI basket.
"The projected productivity outcome is plainly incompatible with recent performance, but we welcome what is an admirable pursuit of achieving it.
"There is no doubt Artificial Intelligence will raise productivity, but the reality is that without a range of other economic enablers, AI cannot achieve the report's brave forecast on its own.
"Our investment competitiveness, the skills of our workforce, the efficiency of our regulatory regimes, our tax system, cohesive federation and much more will be critical to get this uplift.
"The word 'productivity' appears in the IGR 404 times, but references to regulation occur only 41 times. Regulatory reform to dismantle barriers to growth, innovation and competitiveness is essential.
"On energy the IGR assembles sound analysis, but the global and local transition is not happening fast enough to shield Australians and our assets from climate extremes. Shifts in energy technology and consumption are creating large new markets for Australia to enter while shaving demand for other exports.
"Seizing those clean energy opportunities requires that we deploy electricity infrastructure at least as fast and affordably as our peers – productivity is central here too. The alternative is to become a backwater in energy intensive activities, including AI.
"The IGR rightly reminds us that, in the long run, productivity is everything for Australia's economic and social ambitions. The report is a key marker to outline Australia's economic aspirations and challenges. It is a reminder that we need a national discussion that places the opportunities of AI in their full policy context, as well as proper consultation with all sectors of the economy to make sure we can help deliver this productivity goal," Mr Willox said.
