Albanese Announces Productivity Roundtable as Australia's Inflation Falls to 2.1%
Prime Minister touts economic turnaround while navigating Trump tariff concerns at major business forum
Prime Minister Anthony Albanese announced plans for a major productivity roundtable in August while declaring Australia has successfully navigated global economic uncertainty, as new data shows headline inflation has fallen to 2.1% and remained within the Reserve Bank's target band for 10 consecutive months.
Speaking at Sky News Australia's economic outlook forum Friday, Albanese told business leaders the nation's economy is "turning the corner" after creating 1.1 million new jobs during his government's three-year term - "more than for any term of any government since Federation."
"With the worst of inflation behind us, our economy is indeed turning the corner," Albanese said. "Our primary focus is shifting as a result from bringing inflation down to getting growth and productivity up."
The productivity roundtable, to be held in Canberra in August, will bring together business leaders, civil society representatives and opposition politicians to address Australia's stagnant productivity growth, which Albanese acknowledged has been "more than a decade in the making."
"We are seeking a broad range of views so we can build broad agreement for action," Albanese told the forum. "Tax reform will be an important part of this conversation, but not the whole of it."
Economic Turnaround Gains Momentum
The Prime Minister highlighted a series of economic achievements, including two interest rate cuts this year and real wage increases for seven consecutive quarters after falling under the previous government.
"Last week proved how much progress Australia has made," Albanese said, citing the inflation data. "No other advanced economy has navigated this period like Australia."
Tuesday marked significant policy milestones with energy bill relief for every household and small business, the launch of a cheaper home batteries program cutting installation costs by 30%, and a 3.5% minimum wage increase affecting nearly three million Australians.
The superannuation guarantee was also raised to 12% for all working Australians, while government-paid parental leave was extended by two weeks to 24 weeks, with superannuation payments included for the first time.
Manufacturing Renaissance Vision
Central to Albanese's economic vision is transforming Australia into a manufacturing hub powered by renewable energy, moving beyond the traditional model of competing solely on labor costs.
"The world is moving beyond the old equation which held that high wage open economies like Australia could not sustain manufacturing locally because we could not compete on price internationally," Albanese said.
"Comparative advantage in manufacturing will not be defined by minimising the cost of labour. It will be secured by the most productive use of technology by cutting transport costs and by cheaper, cleaner energy."
The government's "Future Made in Australia" agenda aims to leverage the country's critical minerals, renewable energy capacity and proximity to the fastest-growing region in human history.
"For Australia, the ability to co-locate extraction and refining and processing and manufacturing powered by renewables gives us an edge over so much of the world," Albanese said.
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Trump Administration Relations Under Scrutiny
During a wide-ranging question-and-answer session, Albanese addressed concerns about potential trade tensions with the Trump administration, confirming Australia currently faces a 10% tariff rate that he expects to remain unchanged following next week's anticipated policy announcements.
"We are in a position where on July 9, that won't really have an impact on us because that's about other countries who have higher rates overnight," Albanese said.
The Prime Minister revealed he has held three telephone conversations with President Trump and described recent meetings between Foreign Minister Penny Wong and Secretary of State Marco Rubio as "really constructive."
Regarding criticism of Ambassador Kevin Rudd's past statements about Trump, Albanese firmly defended the appointment.
"The discussions that I've had have been very positive, nothing but positive in comments that have been made to me," Albanese said when asked if Rudd posed a barrier to bilateral relations.
On the AUKUS submarine partnership, Albanese expressed confidence the arrangement would continue, noting Australia currently has over 60 naval personnel working in Hawaii to develop submarine skills.
"AUKUS is a good deal for Australia and it's a good deal for the United States. We are contributing to the industrial capacity in the United States right now," he said.
Tax Reform Debate Emerges
While announcing the productivity roundtable, Albanese faced questions about potential tax reforms, including whether his government would consider raising the GST and lowering income taxes.
"I'm a supporter of progressive taxation, consumption taxes by definition are regressive in their nature so that's something that doesn't fit with the agenda," Albanese said, while emphasizing participants would be free to propose various ideas.
The Prime Minister noted his government was "the first government to reduce the top marginal rate" this century, lifting the threshold from $180,000 to $190,000 as part of stage three tax cut modifications.
"I always want to see income taxes as low as possible and wages as high as possible," Albanese said, but refused to pre-empt roundtable discussions with specific commitments.
Public Sector Growth Concerns
Business groups have raised concerns about government job creation outpacing private sector employment. Australian Industry Group data shows that of 410,000 jobs added in 2024, 148,000 were in the public sector and 209,000 in government-funded areas like health and education, with only 53,000 in the private market sector.
Albanese defended the growth in areas like aged care, highlighting his government's promise to place nurses in nursing homes, now achieving 99% coverage.
"It's a good thing that we have done that. It's a good thing in terms of getting higher ratios of care to people to enjoy that dignity and respect in their later years," he said.
The Prime Minister argued fair wages actually assist business rather than creating a "race to the bottom," pointing to the United States as an example where declining manufacturing and worker displacement contributed to social division.
NDIS Reform Continues
On spending reform, Albanese addressed concerns about the National Disability Insurance Scheme pushing past $50 billion, with 11% of six-year-olds and 15% of six-year-old boys enrolled.
"We have another go at it. We will always look for spending to produce better value," Albanese said, crediting previous reforms supported by the opposition for making the system more sustainable.
"People who need the NDIS need to keep it. But also, there were massive rorts in the system. That's the truth," he said.
Regional Engagement Strategy
The Prime Minister emphasized strengthening ties with Southeast Asia, noting his first bilateral visit was to Indonesia where Australia launched its "Invested" strategy for business engagement across the region - projected to become the world's fourth-largest economy by 2040.
On China relations, Albanese highlighted progress in removing over $20 billion in trade impediments, enabling Australian farmers and producers to set export records.
"This underlines the fact that our government's support for making things here in Australia is not driven by nostalgia for an old economic model. It is shaped by our recognition of the new model that is emerging," he said.
Gender Equality Economic Priority
The government has prioritized women's economic participation as a central policy objective, with Albanese noting record-high female workforce participation and record-low gender pay gaps.
"Australia has risen from being ranked 50th in the world for gender equality under the Morrison government, to 13th, our best ever result," Albanese said.
"Equality for women is not an add-on, it's not an afterthought, it is a central economic priority," he added, emphasizing that gender equality drives both economic growth and productivity.
Consensus-Building Approach
Throughout the forum, Albanese positioned his government as seeking broad consensus on economic reform, drawing comparisons to previous Labor administrations.
"I think that Australia works better when we engage people across business, unions, as well as civil society," he said, citing his track record of bringing together diverse stakeholders on emissions reduction policies.
The productivity roundtable represents an early-term initiative to address long-standing economic challenges through collaboration rather than partisan politics.
"If you think you're the smartest one in the room, you're in the wrong room," Albanese said, attributing the quote to Confucius. "I don't think I'm the smartest one in the room."
The roundtable will include evening sessions at the Prime Minister's residence, with participants free to propose ideas without predetermined limitations.
"The worst that can happen is that people develop relationships because they've spent a couple of days together," Albanese said.
As Australia navigates global economic uncertainty while building domestic manufacturing capacity, the August roundtable will test whether the government can build consensus for productivity reforms that have eluded previous administrations.
The forum concluded with Albanese emphasizing his government's commitment to proving "the practical value of a reforming government" while maintaining Australia's values of fairness and opportunity for all.
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