This opinion article by Business Council chief executive Jennifer Westacott was first published in The Australian on Wednesday 8 June 2022
With the federal election receding in the rear-view mirror, now is the time to begin charting the way forward on delivering the economy and society that Australians want to see.
Australians didn’t opt for the status quo, they voted for progress in areas such as accelerated action on climate change and reducing the cost of living.
Making inroads here is critical to a secure and growing economy.
Australia went into the global pandemic stronger and is emerging better than most other nations.
The economy is positioned for a world leading recovery but pulling it off will depend on addressing short-term supply pinch points while also driving long-term and sustainable investment, productivity and growth.
We need to walk and chew gum – tackling short term challenges like labour shortages while securing our economic future.
Given this, Treasurer Jim Chalmers is right to call out the headwinds barrelling our way.
To succeed, we must focus on the levers we can control – lifting competitiveness and delivering greater resilience so Australians are more secure and better off.
We can and we must control whether we become a more attractive investment destination by reducing friction and unnecessary regulation.
Investment will be the lifeblood that drives new industries, deepens our economic base and delivers more productivity. This drives higher wages and job creation, and means we need to confront our ineffective tax system.
We can and we must control our ability to maintain momentum in the recovery, starting with making sure there are enough workers to keep the economy running.
Businesses are reporting more than 400,000 jobs remain unfilled. One company alone has 1,500 vacancies. Truck driver shortages mean some companies have been forced to take one in five of their trucks off the road – vehicles that should be delivering products to supermarkets and building materials to construction sites.
This nationwide shortage of workers across all industries risks stalling the recovery. Whether it’s opening a business five days a week, getting major projects off the ground, or houses built faster and cheaper, we cannot do this without urgently adding to our workforce.
There isn’t a magic bullet – we need to build up the skills of Australians; we need to make it more attractive for people, especially women to return to work, take on extra hours and advance; and we need to make it easier for migrants to come to Australia, fill skills shortages and settle here.
We need to speed up visa approval times, reduce costs and provide a pathway to permanent migration with all the safeguards in place as well as delivering a fit for purpose skills system that ensures workers can easily and quickly get the skills that employers need.
We can and we must lift productivity so employers can share the dividends of better performing workplaces with their teams through higher wages and better conditions. The best way to ensure wage rises are lasting and help with the cost of living is to lift productivity – that message has not changed.
We can and we must control our ability to continue diversifying the economy, and ensure Australia remains an exporting nation. Exports make up around a quarter of Australia’s GDP, and over half of the exports that do the heavy lifting are carbon intensive products such as iron ore, coal, oil and gas.
Diversifying our economy into lucrative growth areas such as advanced manufacturing, defence and space while providing the clean resources the world will demand to decarbonise the planet – lithium, rare earths and minerals – will help secure our economic future.
We can and we must progress our transition into a clean energy economy while ensuring reliable, affordable and secure power for households and businesses. This will require a combination of decisions around accelerating technology while ensuring the market works effectively. Decarbonisation of the economy is an economic issue, not a political one.
And we should never take our mind off the little things – because put together, little changes count.
Let’s not forget the measures that drove Australia’s last big era of productivity – which delivered higher wages and higher living standards – included national competition policy reforms.
Benefitting the economy to the tune of at least $55 billion in today’s dollars, these microeconomic reforms took a decade to implement and required the combined effort of all levels of government, covering close to 1,800 pieces of legislation. The benefits also flowed to people’s pay packets.
Importantly, just as companies address their culture, we need to rethink our approach as a country.
Evidence needs to drive everything we do. The regions and the suburbs must be part of the conversation. Decision-making needs to be timely, weigh the benefits, examine the unintended consequences and consider both short and long term issues.
And as we move from one administration to the next, we must keep the policies that were working to drive the diversification of the economy – like the focus on modernising our manufacturing and industrial base – instead of jettisoning them for the sake of it.
Finally, improving our competitiveness and resilience will require government, business, unions and the community to be at the table. It’s by working together, not through stoking division, that we can secure our economic future and ensure Australians can get ahead.
Jennifer Westacott is chief executive of the Business Council of Australia. Westacott will be a panellist at the forum Australia’s Economic Outlook, hosted by Sky News and The Australian on Wednesday.