The Intergenerational Report has sounded the alarm on the urgent need to grow our economy faster by lifting productivity and driving investment, which will improve living standards, drive more revenue to government and sustain higher wages, Business Council chief executive Jennifer Westacott said.
“The IGR shows Australia needs bold action to deal with an ageing population, and to ensure we can deliver the quality services people expect and deserve, in health, aged care and the National Disability Insurance Scheme, as well as pay a growing interest bill,” Ms Westacott said.
“This document shows that growth in living standards will slow unless we take urgent decisive action to achieve higher economic growth.
“Its projections are concerning – with economic growth slowing to 2.2 per cent, its lowest rate since World War II, and productivity growth declining to 1.2 per cent, consistent with the sluggish average for the past 20 years and a warning that productivity growth is not a foregone conclusion.
“Productivity has been the central driver of wage growth, accounting for 80 per cent of wage rises since federation.
“The number of people aged over 65 will double and that will be accompanied by a shrinking of working age Australians to support them in a care sector that will be that will double in cost.
“We cannot have short term, ad hoc responses – we need a comprehensive and aligned economic strategy the best insurance for the future is a strong economy which will deliver stronger revenues and higher wages.
“We need to lock in higher productivity stronger economic growth than the IGR forecasts because that will drive stronger revenues and higher living standards.
“Our document Seize the moment, released this week, sets out clear and achievable goals to lift our productivity and make us more competitive, with a package of reforms that would leave each Australian $7,000 better off each year by the end of the next decade.
“It includes the six shifts we need to drive productivity and ten policy levers to make sure we get the fundamentals right.
“We need spending reforms to deal with the future challenges, one of the main of which is making sure Australians have access to the skills and education they need to compete in the workforce.
“Businesses need less regulation and complexity to make Australia an attractive place to invest – ensuring we can take advantage of the opportunities in what will be a more competitive global market.
“We cannot afford to take action in areas like industrial relations which will stifle productivity and make it harder and more complex for businesses, large and small, to create jobs and increase wages.”