Agenda to Realise Australia’s Potential

“The Industry Innovation and Competitiveness Agenda released today by Prime Minister Tony Abbott sets out a compelling economic vision that deserves and requires bipartisan support,” said Business Council of Australia President Catherine Livingstone.

“The Prime Minister’s agenda draws together new and existing policies into a cohesive strategy for restoring Australia’s competitiveness, diversifying our economy and delivering the jobs of the future,” said Ms Livingstone.

“We welcome the competitiveness agenda as a vital complement to the government’s other major economic reform processes on tax, the federation, and energy and competition policy, which all need to be progressed in parallel.

“With Australia’s international competitiveness declining across almost all indicators, the government’s agenda recognises that reform is an increasingly urgent task. The government now needs to be supported in taking decisive policy action to deliver on it.”

Ms Livingstone said the four overarching ambitions identified in the Industry Innovation and Competitiveness Agenda offered a sensible framework for reform:

•    a lower cost, business friendly environment with less regulation, lower taxes and more competitive markets
•    a more skilled and flexible labour force
•    better economic infrastructure
•    industry policy that foster innovation and entrepreneurship.

“While business generates jobs and wealth, this agenda also recognises the critical role government plays in enabling trade and investment, fostering innovation and entrepreneurship, facilitating the development of skills and capabilities, reducing red tape and other business burdens, and developing physical infrastructure.”

She said the strategy is consistent with the approach put forward by the BCA in its Building Australia’s Comparative Advantages paper, that the only way to maintain strong economic growth, job creation and improved living standards is to build a more nimble economy through understanding the strengths, opportunities and challenges experienced by different sectors.

“The agenda resolutely rejects the practice of previous governments in subsidising individual sectors or shielding individual companies no longer competitive in their current form. What it recognises is that governments need to put a close lens on sectors to execute a microeconomic reform strategy that is sector specific and thereby lifts Australia’s overall competitiveness.”

Ms Livingstone said that international experience demonstrated that when governments acted purposefully sectors in serious decline could experience a resurgence.

In the United States, for example, the Advanced Manufacturing Strategy has seen a turnaround in manufacturing and the creation of 600,000 jobs over the last four years, following decades of decline.

Detailed recommendations

The BCA strongly endorsed a number of new actions announced in the agenda. These include:

•    the establishment of industry growth centres, initially in five sectors with promising global comparative advantage, that will develop and implement “a roadmap of priority actions to lift the competitiveness of the sector”
•    the focus in schools on science, technology, engineering and mathematics (STEM) subjects and fostering critical thinking and problem solving skills, both of which are vital to preparing students to participate in a technology-intensive economy
•    making the vocational education and training (VET) sector more of a national priority and more industry-focused
•    recognition of trusted international product approval processes which will significantly reduce the regulatory burden on local manufacturers
•    moves to drive cultural change in Australia’s economic regulators – the way in which regulation is administered is as important to the economy as the regulation itself.

Building momentum with a sense of urgency

“We support the consultative processes outlined in the agenda and the ambitious timeframes for implementation. It is vital that these timeframes are met and reforms are implemented through thoughtful and robust, detailed policy frameworks.

“The agenda points to some crucial decisions that will need to be taken in the very near term. It is critical that the roundtables to be convened by the government to take the agenda forward, identify these decisions, some of which will be difficult, and that the government acts with a sense of urgency.”

Ms Livingstone said the government has also identified the white papers on tax reform and reform of the federation as vital next steps in creating a more competitive economy. The Productivity Commission review of Australia’s workplace laws will also be critical to building a more nimble and adaptive economy.

“The government must take action now, not only to address urgent issues on the short-term horizon but to build the capabilities for success in the medium term. We can then position the economy, including with good knowledge infrastructure, to allow us to adapt over the longer term.

“The government’s agenda rightly identifies that Australia must take deliberate steps to realise the opportunities for growth that are available to us.

“Both the government’s agenda and that of business is focused on restoring the competitiveness we need to ensure that the Australian economy has the capacity to create jobs into the future. This needs to be a bipartisan effort, supported by constructive debate in the parliament squarely focused on Australia’s long-term national interests.”

For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2603 • Mobile 0403 241 128