This opinion article by Business Council President Tim Reed was first published in The Australian Financial Review on Wednesday 7 July 2021.
The Business Council’s Living on borrowed time discussion paper is designed to begin a nationwide conversation about where we are, what type of country Australians want the nation to be and how we get there.
We’ve had great success as a country and Australians prospered from nearly 30 years of economic growth before COVID hit.
Australia has been and remains a great place to work, invest and to live. We need to keep it that way.
That’s why we - the Business Council of Australia – are keen to start a conversation about medium-term prosperity; asking what steps we can take to set up the next golden era of prosperity.
The fifth Intergenerational Report last week made clear that if we do not have the appetite to continue to proactively shape our future then we will bequeath future generations a poorer, more challenged future.
Reshaped by the rise of Asia, digitisation and the take up of new technologies, changing business models and the nature of work, climate, global volatility, and worldwide debt and deficit levels – the world around us is evolving.
While the forces of change represent enormous opportunities, they will also expose existing vulnerabilities.
Consider this: one quarter of company tax is paid by 10 companies, productivity growth has been sluggish for the past decade with GDP growth over reliant on population growth, business investment levels are stuck at 28-year lows, and our skills system isn’t working, all of which is translating into serious labour shortages made worse by international border closures.
Wages growth is also stagnating, increasing community frustration.
Few disagree that productivity is the key ingredient to shift us from the middle lane of wages, investment, and economic growth to the fast lane.
We believe by making six big shifts we can help set Australia up for the future.
The first shift is diversification.
Our miners, resource companies and farmers, along with our banks, are the engine room of Australia’s prosperity. They are among the world’s most advanced, innovative, and high performing companies and they are paving the way globally on working towards a low-carbon economy.
For decades to come our economy will be anchored in these bedrock strengths, and our fortunes tied to making it easier for these sectors to continue to grow, adapt and continue to lead the world.
Alone, however, these sectors can’t shield our economy from the transitions underway.
We need to complement these existing strengths by further expanding into new high-tech, high-productivity and high value areas. Creating more, secure, higher paying jobs by selling into additional overseas markets.
Diversifying our economy will attract the best people, ideas, and investment from around the world.
Secondly, we need to actively build a low carbon economy as part of our economic transformation. The world has decided they are moving to a low carbon future.
As a CEO when long-term customers tell you that they still need and want to purchase a product from you, but that going forward they need it to have different features and attributes to your current offering, you face a simple choice: to innovate and live or allow your competitors to innovate and to die.
By developing low emissions technology and clean energy industries, Australia is blessed with all the natural resources we need to continue to be an energy superpower, which exports clean energy around the globe.
Remaining open to the world and enhancing our global competitiveness make up the third shift, and the fourth is lifting the skills of our workforce.
Fifth, we need to ensure no one gets left behind. And the six shift is to rebuild our public finances..
Too often in the past decade it has been said that the 24-hour news cycle and the current political environment mean Australians are not willing to engage in a serious conversation about what it might take to ensure the medium-term prosperity of our nation.
At the Business Council we beg to differ. What we have observed over the past eighteen months is a community that has achieved what few others in the world have been able to achieve.
Each of us have sacrificed personal freedoms in the knowledge that we were contributing to the greater good.
This all gives us confidence that now is the right time to engage in this conversation. We are going to be talking with people from all cross-sections of Australia.
We will highlight some of the issues and the big shifts we believe need to be made. We want to genuinely hear the aspirations, views, ideas, and the choices that the Australian community believe we should be making.
Because if make the wrong choices, we run the risk of condemning ourselves to a future, at best in the middle lane, but more likely in the slow lane of growth.
Tim Reed is the president of the Business Council of Australia