Economic productivity will get a lift with growth in infrastructure.

Jonathan Coppel, the Australian economic counsellor to the Organization for Economic Co-operation and Development (OECD) secretary-general, emphasized on the relationship and said, “Australia is facing an infrastructure shortage which is impacting on the productivity performance of the whole economy.”

He added, “Boosting the supply of infrastructure will require new investments in Australia's infrastructure where the private and social rate of return is high.”

The economic counsellor explained that Australia's productivity had benefited from the extensive reforms of the Hawke and Keating governments which had reduced trade barriers, opened up the economy, reformed the labour market, and established a “stability orientated macro-economic framework.”

The reforms had helped reduce Australia's productivity performance gap with the top half of the OECD countries. The performance gap, as measured in terms of gross domestic product (GDP) per capita, was now about seven percent below its high during the 1990s. Coppel said the GDP continues to slide.

“There have been spurts of very robust productivity gains, but they have not been sustained, and events such as the drought have borne negatively on productivity in recent years,” he said.

Coppel said the OECD Economic Survey of Australia would present the constraints on economic productivity and examine measures to improve government policies. The report will be released befire the end of 2010.