BCA Releases an Action Plan for a Stronger Economy

“Australia is at a crossroads. We need a comprehensive road map for the actions and changes required to seize our opportunities and avoid our nation slipping back,” Business Council of Australia President Tony Shepherd said.

Mr Shepherd will today release the Business Council’s Economic Action Plan for Enduring Prosperity, which has been developed in consultation with government, business and the community, and proposes 93 actions over 10 years in the nine policy areas Australia needs to get right to ensure a stronger economic future.

“Well-managed growth is essential to deliver what all Australians want – good jobs, teachers and schools, quality health services and better roads and railways,” Mr Shepherd said.

“Our plan is a blueprint for a stronger economy which recognises that strong and growing businesses which hire more people and create wealth for the community to share are the key generators of prosperity. It’s not a solution for everything, it’s a plan that leads to growth, investment and social and economic policies that lift the living standards of all Australians,” he said.

“Our challenge to all parliamentarians in the coming months is to look beyond the news cycle and show the leadership and the focus on the long-term national interest the community is looking for.

“Our plan shows that a longer-term, comprehensive and more cohesive economic reform agenda is the only way to genuinely address our economic challenges, rather than ad hoc announcements that do nothing to prepare Australia for the future.

“As we have previously shown, if we keep going with our current approach to spending we will have to cover a budget shortfall at both Commonwealth and state levels of 5 per cent of GDP by 2050, which in today’s dollars would be around $75 billion. For example, to cover this the GST rate would need to go to 25 per cent or the Commonwealth would need to cease all payments for education, defence and hospitals, which is clearly unsustainable and unacceptable.

“If we adopt this plan and we can maintain real growth in our GDP of 2.75 per cent per year, which includes achieving annual growth in labour productivity of at least 1.6 per cent, then average per capita income in Australia could double in real terms by around 2050.

“Business knows how to take a long-term view and clear actions to achieve its goals. We have brought that perspective to the development of this action plan for Australia.

“We can be the greatest country in the world, but we need to face up to our challenges, make the tough decisions, and stay the course on the reforms that are required to set us up for the future.

“The longer we wait to take action, the harder it will be, and the more difficult the choices will be, to shore up our standard of living over the long term,” he said.

The plan recommends urgent action in the first three years to repair the nation’s budget, start the process of comprehensive tax reform, improve our workplace laws and reduce the red tape burden that is strangling business investment and growth.

The plan includes key ideas for tackling Australia’s long-term challenges, including:

  • a comprehensive audit of public spending to ensure it is being spent wisely and efficiently
  • actions to ensure skilled and educated people are a competitive advantage for Australia through teacher quality and reward for teacher performance, better matching the VET and skills programs to the needs of the workforce, and free up universities from red tape
  • introduction of new productivity payments for the states to encourage and reward them to undertake structural reforms
  • the states should produce 15-year infrastructure plans and Infrastructure Australia should concentrate on national networks in roads, rail, water, gas and electricity, and broadening our approaches to infrastructure funding and financing.

“Australia has done well for 20 years because of wise decisions taken in the past, but we are now at a crossroads and are facing tough decisions to avoid slipping back in the world on tax, workplace relations, skills, education, health, infrastructure and regulation,” Mr Shepherd said.

“While Australia remains in a better position than many countries, the world is changing around us and posing new challenges that, if left unaddressed, risk our future living standards. If we seize the opportunities we can in fact lift our living standards.

“With increasing global competition, the construction phase of the resources boom slowing, an ageing population, and technology causing huge change in how business and society works, now is the time to start a national debate about the kind of country we want and how we get there,” he said.

The plan acknowledges that all the required actions cannot be done at once, so it recommends implementing actions in three phases over a decade while building trust and confidence, consolidating the economy and then realising our full potential.

The plan covers nine policy areas we need to get right:

  • We need to get the budget and the deficit back under control, make our tax system more competitive and efficient, and ensure the states have the revenue they need to fund services and infrastructure.
  • We need to plan for sustainable population growth in our cities and regions.
  • We need better infrastructure for a modern, liveable, productive and efficient economy.
  • We want our workplaces to be more productive and competitive and our people to have the right skills and education so they can get the fulfilling jobs that our economy needs.
  • We must change our approach to regulation, which nationally runs to well over half a million pages.
  • We need to trade and do business more effectively and competitively in the world, because one in five Australian jobs are related to trade with the world.
  • We must preserve and grow the strong, stable and competitive financial sector that served us well through the global financial crisis.
  • We need a coherent energy policy that enhances Australia’s competitive advantage and ensures minimum-cost domestic supply.
  • We need to create the right environment for innovation that fosters smart ideas, new ways of doing things and the development of new technology that helps us play to our strengths.

“All of these nine areas go to our capacity to come to terms with what it means to operate in a global world as a small economy, and our success will be dependent on our ability to be agile, to invest in our people and to drive innovation across all parts of the economy,” Mr Shepherd said.

“Delivering a comprehensive long-term economic action plan is not easy, but it is the only choice if Australians want a stronger, more resilient economy which can support a social safety net, successful businesses, good jobs and quality services for all.

“We know there will be diverse views about the road map we have put forward and we welcome that. The reform program we’ve put forward can only be progressed if different sectors work collaboratively to find and build common ground, and to negotiate where we have differences.

“What all of the groups we’re consulting with agree on is that the country needs to move beyond short-term fixes and narrow policy debates and discuss a more comprehensive and longer-term vision for our future. Our nation is at a crossroads, so now is the time to generate a national debate about the kind of country the community wants Australia to be in 20 or 30 years,” he said.

In coming months the Business Council of Australia will be releasing further papers on challenges such as how to deal with high construction costs, infrastructure funding and financing, and a major piece of work on improving regulation making, as well as rolling out implementation plans on all the key areas in the plan.

We encourage the community to leave comments about the plan on the BCA website.

For further information contact:
Scott Thompson, Director, Media and Public Affairs
Business Council of Australia
Telephone (03) 8664 2664 | Mobile 0403 241 128