Mortimer Review Underlines Need to Expand Australia's Productive Potential

23 September 2008

The Business Council of Australia has welcomed key elements of the Mortimer review report by Mr David Mortimer and Dr John Edwards, which was released yesterday.

BCA Chief Executive Officer Katie Lahey said the BCA particularly welcomed the report’s emphasis on expanding Australia’s productive potential.

“The Mortimer review shows how export success rests on continued economic reform within Australia,” she said.

“The review points out the importance of building streamlined regulatory systems, of improving our export infrastructure and our tax system, and of building an education and skills system responsive to the needs of international business.”

Ms Lahey said the BCA supports a number of other key points made in the report:

  • Fragmented state markets are affecting companies’ ability to compete internationally. The Council of Australian Governments must aggressively pursue the “seamless economy” agenda and should treat international competitiveness as a top priority.
  •  Australia needs a whole-of-government approach to the world economy, taking in trade, investment and migration issues, as well as domestic economic reform.
  • The multilateral trading system remains the best hope for rapid and durable expansion of Australian and world trade. Australia should continue to press for an outcome in the Doha Round of world trade talks. At the same time, it should promote improvements to the multilateral system and make free trade agreements as compatible as possible with that system.
  • The Henry review of Australia’s tax and transfer systems should focus on creating a tax system that maximises Australia’s international competitiveness.
  • Australia needs to build international business and management capabilities,notably Asian language and cultural skills.

The review’s call for “international competitiveness assessments” on significant pieces of legislation was a positive step, Ms Lahey said. But it also underlined the importance of resourcing and continuing commitment to the government’s existing process for assessing the impacts of regulation.

Ms Lahey said it was important that yet another expert group had confirmed the potential impact of the government’s Carbon Pollution Reduction Scheme on emissions-intensive, trade-exposed industries.

The review acknowledges (at page 72) that the scheme “will bring about significant economic and structural changes”. It says that without the right transition arrangements, it risks “an adverse trade and investment outcome for Australia, with no commensurate global environmental gain”.

“Australian-based industries that are trade-exposed and energy-intensive are particularly vulnerable to the potential negative impacts a carbon pricing system could have on their competitiveness,” it says.

Ms Lahey said the BCA shared these concerns.

“The Mortimer review underlines the importance of providing the right arrangements for emissions-intensive, trade-exposed industries to create a world-leading emissions trading scheme.

“We remain confident that the right arrangements can be found.”

The BCA recommended prior to the 2007 federal election that Australia should review its trade policies and programs.

“This broad-based examination of trade policy settings was both necessary and timely in light of changes to the global business environment,” Ms Lahey said.



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