OECD Economics Department Working Papers, No. 1025 Shows that Australia's productivity growth has decelerated markedly around the turn of the century, and that part of the decline is probably temporary, but raising multifactor productivity is key to ensure that living standards continue to grow strongly, especially if the currently strong terms of trade weaken over time. Argues that ensuring responsive, high quality, vocational and higher education systems is indispensable to long-term growth. Argues also that raising the completion rate of vocational students, and enhancing the level of collaboration among the key innovation players are priorities. Demonstrates that the productivity enhancing effects of infrastructure could be boosted by more effective and strategic planning, new sources of funding, and better use of existing capacity.