Exploring Why Australia's Productivity Keeps Missing the Mark

Australian leadership may be talking the talk, but given the opportunities they've let slip so far with AUKUS, they're not walking the walk...

Since Australia’s 5 May 2025 general election, which no doubt to many readers will feel like an age ago, the returned Albanese government has sought to double down on tackling Australia’s stalling economic productivity. Despite holding power since 2022, and initiatives such as Future Made in Australia, it is yet to make much headway on improving underlying and real productivity in the economy; hence the nation’s anticipation of an upcoming roundtable on the topic, being hosted by Australia’s Treasurer, The Hon Jim Chalmers MP.

Australia has had plenty of chances to steer productivity in a more resilient direction over the last decade; with, or without, the black swan (or elephant?) of pandemic spending and tightening. Each time it has foregone an opportunity, the task has become harder. To truly show just how big of a struggle Australia now faces, we’re going to explore a reasonably recent example that Australia has mostly spurned. And that’s AUKUS: a proposition far beyond the framework of a defence pact or multi-country procurement program, and if it had been managed as such, it might have made a real difference.

The Opportunity As It Was

Let’s start by breaking down the two Pillars of the AUKUS program:

1. Pillar I revolves around the acquisition of three US Virgina-class Submarines in the early 2030s and the co-development of the SSN-AUKUS submarines with the United Kingdom to deliver the SSN-AUKUS build in the 2030 and 2040s. Australia would use the preceding time to build adequate prerequisite shipyard capacity and personnel expertise, while the United States would increase US submarine deployments to the region, basing out of Western Australia.

2. Pillar II is the undeniably more interesting proposition long-term: after all, submarines are submarines, a known capability, while Pillar 2 has much wider scope and possibility. All three nations would collaborate and cooperatively compete on a range of advanced technologies; autonomy, AI, undersea capabilities, electronic warfare, innovation, quantum technologies, advanced cyber and information sharing all made the list.