On August 19, a coalition of advocates and experts will gather in Canberra for a pivotal economic roundtable. Treasurer Jim Chalmers has declared that “productivity” will be the event’s “primary focus.” The term may seem daunting, yet its essence is straightforward: productivity measures the effectiveness of productive effort, or how efficiently inputs are converted into outputs. Enhanced productivity allows us to produce more with less, a crucial factor in improving living standards over time.
However, the path to increased productivity is fraught with debate. As the discussions leading up to the roundtable show, there is no consensus on the best strategies to pursue. Business leaders propose reducing regulation and lowering taxes, while unions advocate for a tax system overhaul to redirect investment from housing to more productive avenues. University leaders suggest boosting education, and Scott Farquhar of Atlassian highlights the potential of artificial intelligence. Despite Chalmers’ call for innovative ideas, none present groundbreaking departures from existing proposals.
Historical Context: Lessons from the Past
Looking back to the early 20th century reveals that government-led debates on productivity are not a new phenomenon. As detailed in Sean Scalmer’s forthcoming book, “A Fair Day’s Work: The Quest to Win Back Time,” productivity was a significant concern for global leaders a century ago. During World War I, the struggle for martial supremacy extended beyond the battlefield to the home front, where the capacity to produce armaments became critical. Rivals expanded factories and extended work hours, commissioning experts to study and propose reforms.
Research conducted in the United States, United Kingdom, and Europe, which also reached Australia, found that longer work hours decreased productivity. Conversely, shorter hours reduced absenteeism and accidents, improved employee satisfaction and health, and promoted cooperation between workers and management. These findings fueled workers’ demands for shorter workdays, with Australia leading the charge. Australian workers were among the first to secure an eight-hour day in the mid-19th century and later achieved a 44- and 40-hour workweek.
In 1920, Justice H.B. Higgins famously ruled in favor of timber workers’ claims for reduced hours, citing international studies linking productivity and work hours, and emphasizing the need for compensatory rewards for employees adapting to new technologies.
Modern Relevance and Challenges
Despite being over a century old, the principles from Higgins’ judgment remain relevant today. In an era where artificial intelligence promises significant productivity gains but also poses threats, the interests of employees and the potential for reduced work hours should be central to discussions. This approach could foster social acceptance of technological changes.
Since the late 1990s, productivity growth has slowed. This is perhaps unsurprising, given that employees are working longer hours, often unpaid. According to the Australia Institute, full-time employees in Australia worked an average of 4.1 hours of unpaid overtime weekly in 2024. They also face longer commutes and the dual burdens of childcare and eldercare.
Prime Minister Anthony Albanese has downplayed the prospect of significant tax reform emerging from the government’s productivity roundtable, scheduled less than two weeks after Treasurer Chalmers’ declaration that “nothing will be off the table.”
The Case for a Four-Day Workweek
Extended workdays have long been linked to declining productivity. Could reduced hours once again offer a solution? International trials of a four-day workweek have shown promising results, yet the Australian government has not pursued its own experiments. The 2023 Senate Inquiry into Work and Care recommended a trial, supported by ACTU President Michele O’Neil, but the government’s response was tepid, merely noting the recommendation without further action.
Focusing on working hours could enhance productivity and align with Australia’s social democratic traditions. As the nation grapples with the complexities of modern productivity challenges, historical insights may offer valuable guidance for future policy decisions.
Sean Scalmer is an associate professor at The University of Melbourne’s School of Historical and Philosophical Studies. This piece first appeared on The Conversation.
