The Business Council has today released new economic analysis showing Australia could unlock up to $790 billion in additional foreign direct investment by lifting its global competitiveness, which will support higher living standards.
The BCA’s Global Investment Competitiveness Index shows Australia ranked 21st out of 42 countries for investment competitiveness in 2025, highlighting the opportunity for policy settings that further lift investment, growth and living standards.
Analysis released today shows that improving Australia’s ranking into the top 10 globally could increase foreign direct investment by 39 to 55 per cent, equivalent to an uplift of $560 to $790 billion.
Business Council Chief Executive Bran Black said lifting investment is critical to addressing cost-of-living pressures over the long term.
“At a time of persistent inflation, high interest rates and increasing global uncertainty, attracting investment is critical to lifting productivity, supporting economic growth and easing cost-of-living pressures,” Mr Black said.
“In a more volatile global environment, countries that are most competitive win investment, and that has real consequences for jobs, wages and growth.
“If we want Australians to earn more and get ahead, we have to be a place where businesses choose to invest, because this is what creates jobs and grows the economy.”
Mr Black said Australia continues to perform strongly in areas such as trade, but more can be done in key areas, including regulation, business taxation and investment openness settings.
“Australia has strong fundamentals, but we are falling behind in some of the areas that matter most to investors, including regulation, tax competitiveness and investment settings, which makes it harder to attract global investment,” Mr Black said.
“If we do not attract that investment, it does not disappear – it goes elsewhere, along with the jobs, innovation and economic growth it supports.”
Mr Black said the upcoming Budget presents an opportunity to strengthen Australia’s competitiveness through targeted reforms.
Australia can become a top 10 investment destination, but to do that, Australia must:
- Cut regulatory costs by 25 per cent by 2030.
- Fast track low-risk foreign investment, while focusing scrutiny on genuinely sensitive transactions.
- Implement targeted incentives like accelerated depreciation or an investment allowance to make investing in Australia more competitive globally.
- Continue the modernisation of trade systems, including the delivery of a national Trade Single Window and removing remaining nuisance tariffs.
- Restore balance and flexibility in labour engagement and simplify modern awards to better support productivity and wage growth.
Mr Black said recent workplace relations changes have increased costs and complexity for businesses, making it harder for Australia to compete for global investment.
The Government also has an opportunity to improve Australia’s research and development settings following the release of the Ambitious Australia: Strategic Examination of Research and Development final report.
“Improving our R&D settings will help support innovation, drive new economic opportunities and deliver higher living standards,” Mr Black said.