Australians would be $10,000 better off over a decade if we fixed our productivity problem and stopped it acting as a handbrake on the economy.
The release of the Business Council's Living on borrowed time discussion paper is designed to trigger widespread consultations with the broader community about Australia's future.
Despite 28 years of uninterrupted economic growth and our success managing the economy through the pandemic, we are currently facing an equation that doesn’t stack up.
With the prospect of a slower growing economy, record public debt, weak population growth and a tax system that will struggle to fund future spending demands, something needs to give.
Unless we make some big shifts to meet our challenges and regain our appetite for reform, our economy and living standards are going to be stuck in the middle lane and we risk potentially sliding backwards.
The consequences are real for people: slower wages growth, fewer opportunities and the country will fall further behind its competitors.
It’s simply unacceptable that one in 20 children experience poverty and our students are falling behind on education. As Australians we must do better.
Australia ranks 22nd in the world out of 64 countries and behind many of our regional neighbours, according to the IMD World Competitiveness Index.
The BCA’s discussion paper highlights that it now takes an average worker seven years to increase their pay by $100 a fortnight. In the past, workers were getting that size pay rise every year or two.
It’s why people don’t feel they are getting ahead.
We need to drive productivity harder and we’re not doing enough on reform.’
Achieving a one per cent increase in productivity growth a year by producing goods and services more efficiently and smarter would deliver an extra $10,000 in average incomes for Australians over a decade.
The world is changing around us. Australia finds itself in the crosshairs of several major shifts including the rise of Asia, technological and digital advances and the global adoption of green energy sources.
Nearly 20 years ago the first Intergenerational Report warned of the costs to our long-term futures if Australia just coasted along. These warnings continue today.
The six big shifts we need to make are:
- we diversify to a more diversified industrial base
- we actively build a low carbon economy
- we make sure we remain open to the world and competitive
- we lift the skills of our workforce
- we make sure no one gets left behind, and
- we rebuild our public finances.
Australia’s economy could experience economic growth of more than three per cent a year. This would help pay down the nation’s $1 trillion mortgage faster and bring down the jobless rate even further.
The nation could also expand its share of the global goods and services export market valued at $US25 trillion. At the moment Australia captures 1.4 per cent of this market, if we expand our share by even a little our incomes would grow.
The BCA’s consultation process will tap into the BCA’s community-based Strong Australia Network with face-to-face and virtual consultations, especially in regional areas.
It will also include in-depth discussions with industry groups, business leaders, department chiefs and state and federal governments as well as topic specific forums.
A stakeholder forum bringing together some of Australia’s most influential policy and decision makers will be held at the end of July.
At the end of the consultations, we will deliver a comprehensive plan for Australia’s future reflecting the views and input we’ve received during our discussions with the community across the country.
We hope the election campaign will focus on the community’s priorities, their aspirations for the country, and areas of bipartisanship in the national interest.