Prosperous Australians Reach for the Stars

26 October 2006

The Age

By Michael Chaney
Business Council of Australia

The nation is becoming more aspirational, more confident and more capable, says Michael Chaney.

THERE is an emerging shift in the community - a shift that brings the potential to lift the nation to a new trajectory of economic growth and community achievement - providing it's recognised and nurtured.

It's a shift I believe is occurring from the "battler" mindset to one of the "aspirant".

As business leaders responsible for companies employing 1 million Australians and producing much of the nation's prosperity, we're excited by this.

We want to see it developed and encouraged so it can be harnessed to benefit the economy and the nation.

In 1983, Australia was not travelling well as an economy - or as a society. We were in dire need of new thinking and new ideas, and the Business Council was formed by business leaders to help fill that gap.

As we lost our competitiveness in key industries in the 1970s, jobless numbers rose sharply. Inflation was above 10 per cent.

Australia's economic predicament was brought home to me rather starkly when I attended the Harvard Business School in 1992. We examined a case study on Australia. The message of the Harvard faculty was that Australia had squandered its opportunities, relying on its natural resources for growth rather than its innovation capacity; and had progressively seen its productivity and competitiveness fall through institutional rigidities. In their opinion, Australia was doomed economically.

But in the 14 years since those gloomy words, Australia has recorded - bar Ireland and Luxembourg - the highest growth rate of any Western economy.

The reason is simple: people on both sides of politics recognised we were at the crossroads and set about changing our economy in a number of fundamental ways. We undertook micro-economic reform.

Over the past decade, our economy has grown by 40 per cent in real terms. The days of 10-plus per cent unemployment now seem distant. The BCA's own research shows that there are now 315,000 more people in employment than would have been the case without labour-market reform.

To many thousands of Australian families it has meant real changes - for the better - to their lives.

The economic growth has also given us greater clarity and confidence about our role and responsibilities as a nation.

And there are few other countries where the corporate sector has improved its efficiency and profitability so dramatically. This success is reflected in the fact that company tax payments have increased from $27 billion to $57 billion over the past five years - providing much of the funding for social programs and personal tax cuts.

Recently, we've detected attitudes and beliefs that point to a mindset among Australians that is becoming more aspirational, more confident and more capable.

Instead of being focused on basic needs, Australians are increasingly focused on how they might go about locking in wealth and the prosperity they've worked hard for.

And instead of seeing ourselves as reliant on traditional manufacturing and resources, we look upon Australia as a sophisticated, modern economy shaped by services and technology.

This shift is bigger and potentially more profound than what is usually alluded to in political debates. I can't help feeling that an important factor has been the dramatic shift to the Australian as shareholder.

In 2006, more Australians own shares directly and indirectly than in any other country except the United States, where the number is comparable, at more than 50 per cent.

As business, political and community leaders, we spend a lot of time talking up the big picture of continuing economic reform.

Australians are crying out for solutions to infrastructure bottlenecks and water shortages. Yet much of the policy and political debate revolves around blame-shifting and finger-pointing between governments.

The aspirations of individual Australians - and the potential of this nation - will not be unlocked if we allow the debate to be framed around "battler" or negative, inward-looking ways of thinking.

First and foremost, we need to fix our dysfunctional system of federal-state relations. We urgently need more collaborative structures that allow governments to work together as a rule, not an exception.

The second area involves improving our services sector - retail, tourism, banking through to science and technology. Services are a driver of growth in the global economy and will increasingly dictate Australia's future growth prospects.

We can't rely indefinitely on our minerals and resources to drive prosperity. We have to make a much bigger effort to take maximum advantage of the growing demand for services.

The third area is promoting deeper awareness of business investment in the community, through corporate social involvement. Better understanding will help build a deeper appreciation of business' value to the nation.

The final emerging policy area for the BCA focuses on ways to increase participation in prosperity. The challenge now for government and business is to deepen and extend direct participation in the economy. The WorkChoices legislation and welfare-to-work provisions are a good start. But we need more ambitious solutions.

We want to lift the bar on reform - not just to lock in Australia's current prosperity but to pass it on beyond the current growth cycle - on to future generations.



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