MARK COLVIN (ABC PM PROGRAM): Australia's economic performance has been the envy of the Western world. But a new report warns that unless the country addresses a crisis in productivity, it'll face a future of economic stagnation and falling living standards. The report is by the Grattan Institute.


Links to the full interview and the full report from the Grattan Institute are at the end of this post.


STEPHEN LONG: Productivity isn't everything. The Nobel Laureate economist Paul Krugman once said. But in the long run, he famously added; it's nearly everything. And if that's right, Australians should be worried.

SAUL ESLAKE: Australia's productivity performance is one of more serious blemishes on an economic record that over the past decade has otherwise been very good.

STEPHEN LONG: Saul Eslake is the co-author of a new report by the Grattan Institute: Australia's Productivity Challenge.

SAUL ESLAKE: Australia has in effect given up all of the gains in terms of productivity that it made relative to the United States during the great reform area of the late '80s and 1990s.