The Productivity Commission (PC) will “sharpen its focus” on harnessing data and digital technologies, getting to net zero, and building a “skilled and adaptable” workforce, Treasurer Jim Chalmers said in issuing the PC’s first Statement of Expectations (SoE).

Reflecting the results of nine months of policy review and tweaking, the new SoE – which joins a host of similar documents already issued for other Treasury agencies – is the first such document ever issued for the PC, whose research has previously called out such issues as the decline in ‘flatlined’ national productivity, the need to ‘rebalance’ digital skills expenditure, and the importance of modernising the telecommunications Universal Service Obligation.

Other key areas of focus under the new SoE include population ageing, climate change, global shifts such as geopolitical risk and fragmentation, and rising demand for care and support services – all stated key priority areas of the Albanese Government as it works to

The new SoE instructs the PC to take a more forward-looking perspective in its analyses, adopting a “great focus on the major forces, trends and transitions that will impact the Australian economy over the coming decades,” Chalmers said in announcing the agency’s new operating framework.

That framework also expects the PC to engage more effectively with state and territory governments, industry, and the broader community – with input expected to reinforce its work and motivate it to produce “more concise and timely reports” with practical recommendations to drive real action.

Among the SoE’s requirements is that the PC “modernise and update” its methods for data collection, analysis, and research, with a formal data strategy that can focus the agency’s efforts in areas such as modernising its modelling, making better use of microdata, and finding new ways to analyse service sectors that “will play an increasingly important role in Australia’s productivity and prosperity.”

“More diverse data and frameworks and greater external input will improve how the PC applies an economic lens to major and emerging areas of focus,” the SoE notes in laying down expectations that the PC “produce shorter, more timely reports on priority topics.”

PC reporting should also include “appropriate and effective recommendations on how to translate them into practice,” the SoE says, as well as working with the Australian Centre for Evaluation to conduct “more rigorous evaluation of program delivery” and reporting on the feasibility and risks inherent in its future inquiries.

“Australia’s longstanding productivity challenge will take time to turn around,” Chalmers said. “We want a refocused and renewed PC to be a key source of world-class, practical advice when it comes to productivity and prosperity and progress more broadly.”

More practical advice, more quickly

The new SoE comes during a time of change at the PC, which in July announced the appointment of Chris Barrett, then Deputy Secretary of the Victorian Department of Treasury and Finance (DETF) Economic Division and former Ambassador to the OECD, as the PC’s new chair.

Barrett’s appointment came after a “rigorous process” and was intended to cement the PC’s “key role in identifying the policy reforms that can drive economic growth,” Chalmers said at the time while noting that “a strong, effective and well-led PC will be vital to Australia’s progress into the future.”

In September, however, Barrett backed out of the appointment – opting instead for a promotion within DETF and leaving Chalmers to choose an alternative.

That alternative is newly appointed PC Chair Danielle Wood, a public-policy expert whose transition from Grattan Institute chief executive will see her charged with executing on the new SoE’s vision and guidance – including the integration of performance measures, and compliance with KPIs, into the organisation’s regular reporting.

“These reform directions will establish the PC as a modern, high-performing, and world-class institution that provides more rigorous, relevant, timely, and practical advice,” the SoE says.

“It will ensure the PC takes a broader perspective and approach to Australia’s productivity challenge, and is more responsive to changing conditions and priorities…. Its advice should help reinvigorate Australia’s productivity performance, in a manner that contributes to strong, sustainable and inclusive economic growth.”