Australia’s productivity problem has become one of the most talked-about numbers in the national economy, and now one of the country’s biggest lenders has offered its own prescription. Commonwealth Bank has argued that a combination of artificial intelligence adoption, stronger business investment and regulatory reform represents the clearest path to reviving the flat productivity growth that has dogged the economy for the best part of a decade.
The intervention lands at a politically charged moment. Productivity — broadly, the amount of economic output squeezed from each hour worked — has become shorthand for whether living standards can keep rising. When it stalls, wage growth becomes harder to sustain without stoking inflation, and the task of funding health, aged care and defence grows heavier. According to CommBank’s analysis, reported by GNews, the recovery will not come from working harder but from working smarter — deploying new technology, backing it with capital, and clearing away the rules that slow both down.
The context: a decade of drift
Australia’s productivity malaise is not new, and it is not uniquely Australian. Since the mining boom faded, growth in output per hour has slowed markedly, and the pandemic years muddied the picture further with distorted labour markets and supply shocks. The Productivity Commission has repeatedly warned that the 2020s risk being a lost decade if the trend is not reversed, noting that Australians have long relied on productivity gains for the bulk of income growth. When that engine sputters, the economy leans harder on population growth and commodity prices — neither of which is a reliable substitute.
Into that vacuum steps the argument that technology, and AI in particular, could be the circuit-breaker. The logic is straightforward: if software can automate routine cognitive work, draft documents, triage customer queries and accelerate coding, then each worker can produce more without additional hours. Banks are a natural proving ground. CommBank has been among the more aggressive local adopters, folding generative AI into its messaging channels, fraud detection and internal engineering, and it has spoken publicly about redeploying staff as automation handles higher volumes of simple tasks.
The news: three levers, one message
The bank’s framing is notable because it bundles AI with two less glamorous ingredients. The first is investment. Business investment as a share of the economy has been soft for years, and without new plant, equipment and software, the productivity dividend from AI simply cannot be captured. Buying the tools is only half the job; firms have to reorganise around them, retrain staff and rebuild processes — all of which costs money upfront for a payoff that arrives later.
The second is regulatory reform. Here the bank is echoing a long-running complaint from the corporate sector that Australia’s planning approvals, occupational licensing, tax settings and compliance burdens are a handbrake on the economy. The suggestion is that even the best technology will underperform if it is deployed into a system clogged with red tape. Reform, on this view, is less about deregulation for its own sake than about removing friction that stops capital and labour flowing to their most productive uses.
Two views on whether AI is the answer
Not everyone accepts that AI is the silver bullet its boosters claim. Optimists point to the sheer breadth of tasks large language models can now handle, and argue that even modest efficiency gains across millions of white-collar workers would compound into a meaningful national uplift. In this camp, the risk is moving too slowly and ceding ground to faster-moving economies overseas.
Sceptics counter that the productivity gains from earlier technology waves — the personal computer, the internet, cloud computing — took years, sometimes decades, to show up in the national accounts, if they showed up cleanly at all. The economist Robert Solow’s famous quip that the computer age was visible everywhere except in the productivity statistics still haunts the debate. There is also a distributional worry: gains may accrue to a handful of large firms with the capital and data to exploit AI, widening the gap with smaller businesses that cannot afford to experiment. And there are legitimate concerns about accuracy, bias and accountability when automated systems make consequential decisions — issues a bank, of all institutions, cannot afford to get wrong.
What it means for Australia
For Australia specifically, the stakes are sharpened by structure. The economy is dominated by services and by small and medium-sized enterprises, many of which lack the in-house expertise to adopt AI safely. If the productivity dividend is real but concentrated among big banks, miners and retailers, the national average may barely move while inequality between firms widens. That is a policy problem as much as a technological one, and it points to why reform and investment sit alongside AI in CommBank’s argument rather than behind it.
There is also the question of the workforce. Treasury and the Reserve Bank have both flagged that AI could reshape white-collar employment, and the finance sector is squarely in the firing line. Australia’s challenge is to capture the efficiency gains without hollowing out the entry-level roles that have traditionally trained the next generation of professionals. Skills, migration settings and education policy all feed into whether the country has the human capital to make new technology pay.
Federal policymakers are already circling the issue. The government has convened roundtables on productivity and economic reform, and AI regulation is being weighed through consultations on mandatory guardrails for high-risk uses. The tension is obvious: move too fast on rules and you risk smothering adoption; move too slow and you risk a public backlash if something goes wrong. CommBank’s contribution effectively argues that reform should clear the runway rather than build new fences.
What’s next
The near-term test will be whether words translate into measurable investment. Watch for capital expenditure figures, for how quickly AI tools spread beyond the big end of town, and for whether the next round of federal reform actually touches the planning, tax and licensing settings that business groups keep flagging. The Productivity Commission’s ongoing inquiries will provide one scorecard; the national accounts will provide the harder one.
For now, CommBank has planted a flag on the side of the debate that says the tools exist and the opportunity is real — but only if Australia is willing to invest in them and reform the system they plug into. Whether the country can convert that potential into the productivity numbers that actually lift living standards remains, as it has for a decade, the open question.
Sources: GNews · AI + Aus banks
