Frontier Economy
Putting Australia at the frontier: building a stronger nation, more secure economy and leading society
As a nation, we are facing a number of big economic challenges, including the global return of rising inflation and higher interest rates that are making it harder for Australians to get ahead and secure better living standards.
To combat this, we’ll have to find new ways to turbocharge economic growth by putting ourselves at the frontier. We need to work together to reshape the economy into a high wage, high productivity environment. The upcoming Jobs and Skills Summit is a critical chance to examine the challenges and opportunities we face as a community so we can emerge stronger, as a frontier nation.
As the leading voice of Australia’s largest employers, the Business Council of Australia is ready to work alongside government, civil society groups and unions to secure our country’s economic future with stronger businesses, higher wages and better living standards.
What is the frontier nation?
A frontier nation takes advantage of opportunities to set itself up for the future. It makes the most of its existing strengths and finds ways to diversify quickly to create new industries and higher paying jobs. To do this, it is essential to have the most talented people, to put ourselves on the cutting edge of developing and harnessing emerging technologies, and work together as an inclusive, modern society.
Maintaining full employment and growing productivity
The Jobs and Skills Summit provides a unique opportunity to address the challenges to productivity and real wages growth.
A critical element of productivity growth is ensuring businesses and workers can make the most of new investments and innovations.
This must be further supported by an efficient process for translating productivity gains to real wages growth, which includes an effective enterprise bargaining system.
A focus on driving productivity through investment and innovation will also help support employment growth and keep unemployment low.
Improving migration settings to support higher productivity and wages
The Business Council has identified the critical resets needed on skills and migration to lock in a stronger economy and better wages.
The summit is chance to reset our long-term migration program and manage the short-term challenge of labour force shortages across the whole economy.
We can move forward if the summit agrees on the role of well-managed skilled migration as a key driver of Australia’s prosperity and an important part of shaping the economy and our society.
We cannot reach the frontier without the knowledge and skills transfer that comes with well managed migration.
Australia needs a skilled migration scheme that protects workers and builds confidence with a clear stand against exploitative practices.
We need to move from a short-term, ad hoc system to long-term planned migration with a focus on four-year visas, pathways to permanent migration.
And, we have to get better at planning for the future, managing our population growth so we get the housing, transport and health services right.
We want to see a catch-up boost to the permanent migration program, with at least two-thirds of places for skilled workers.
It’s also crucial to build confidence in our migration system, so we support moves to provide better information for visa holders, set a high bar for the treatment of migrant workers and toughen penalties for wilful and deliberate exploitation.
In the short-term, we must urgently address the backlog of visa approvals across all categories because we simply don’t have enough people to do things.
Addressing skills shortages and getting our skills mix right over the long-term
First, we need to make sure students leave school with strong foundation skills, a clear path and a comprehensive snapshot of their abilities and capabilities, not just a mark to define their future.
We have to finally redesign the tertiary system for the 21st century, making VET and university more interoperable and centred around learners and their employers.
We need a system that lets Australians get the skills they need across institutions based on what they need.
We’re calling for the introduction of a digital record that allows future employers to fully see and fully understand what people have learned through their courses and on the job.
And crucially, we need a system that empowers the business community to train their people and do even more by recognising the work being done and providing incentives to see it expanded.”
Maximising opportunities in the industries of the future
The Business Council has identified the critical resets needed to diversify our economy and maximise opportunities in the industries of the future.
Resetting industry policy in Australia starts by asking ourselves:
- What are we already good at?
- What can we be good at?
- What must we be good at?
Having an outward looking orientation, rather than focusing on how industry and industry policy serves domestic markets, is the key to success. We must acknowledge that being globally competitive is the only way to secure high paying jobs in Australia.
Driving the creation of high wage, high productivity jobs and a more diverse economy, requires industry policy to be stable and focus on:
- getting the macroeconomic settings right to drive productivity
- having an investment mindset, not a focus on grants
- coordination and facilitation to get the necessary scale and focus
- starting with a focus on frontier industries and capabilities, not individual businesses
- competitive advantage and where capabilities extend between industries
- enabling a collaborative approach between industry, researchers, and government
- driving innovation and the use of new technologies, and
- building up sovereign capabilities.
Supporting or subsidising sovereign manufacturing or services – rather than focusing on trying to subsidise uncompetitive industries – should be confined to:
- reducing any overreliance on a single supply chain or market
- improving our security where we can’t do without them, or
- the foundational areas where a capability is needed for success.
You can read the full report here.
Expanding job opportunities for all Australians including the most disadvantaged
The Business Council has identified the critical resets needed to remove the barriers that inhibit people getting the hours they need, the skills they need and the jobs they want.
Ensuring all Australians have the same opportunities to engage in education, skills training and participate in employment.
Focusing on economic advancement at an individual and community level, for all Australians, particularly those who are disadvantaged.
Turning the language of intent into real actions to enable a person’s full economic and personal potential.
Moving to the language of aspiration, ambition and wealth creation and prosperity in all elements of Indigenous Affairs, and moving beyond simply ‘closing the gap’.
Ensuring Indigenous Australians are a part of the new economy.
Removing the structural barriers that inhibit people with an illness or disability, such as job design and recruitment practices.
Re-thinking the design of employment service providers and programs which are not working and do not provide the long term support and continuity that is required to drive sustained change.
Unlocking the potential of high value regions with a nationally consistent plan and a concerted effort in areas of entrenched disadvantage or areas likely to be impacted by the changes in the economy.
You can read the full report here.
Equal pay and equal opportunities for women
Australian women are among the world’s most educated, but women’s economic participation is not where it should be.
While this level of educational attainment shows the value of our national investment in education, it is apparent we are not capitalising on this investment.
Women’s workforce participation bears the brunt of the economic and social trade-off between work and care. It remains the main barrier to women joining the workforce, increasing their hours of work and advancing to reach their full potential.
The systemic structural, cultural and economic barriers that still exist in childcare, Paid Parental Leave (PPL), superannuation and acquiring skills all have direct economic consequences on women’s future economic security.
Harassment and bullying remains an issue in many workplaces.