Question

· What is the difference between the labour productivity and the total factor productivity (TFP)? Why is productivity improvement important for our living standard and well-being?

· What is the current productivity trends in Australia?

Answer 1

The difference between labour productivity and total factor productivity is that TPF is the ratio of total output to total inputs whereas labour productivity is the output of a country in an hour.

High productivity is the main source to enjoy a high standard of living. The former influences the later to a great extent. We can take the example of Canada and Vietnam here. No wonder, Canada is one of the nicest and developed countries in the world. But due to its low productivity, it's standard of living falling down. For Vietnam Veterans of the Second World War, once they came back home they found the productivity was doubled as a result their standard of living was increased.

Australia's Labour Productivity decreased by 1.26 % YoY for the month of June 2019. In the previous quarter, there was a drop of 0.50 %. The Labour Productivity Growth data of Australia is updated every quarter. In recent years, Australia has been facing low MPF growth.