Today our nation will hear from our 30th Prime Minister Scott Morrison on the plan to salvage our economy which is going through one of the worst health and economic crises in modern history.
Our first priority must be to get businesses back on their feet and people back to work.
Australia also has the opportunity to support risk taking, innovating and developing skills to create new jobs and a more productive future.
Innovation flourishes in adversity – it leapfrogs time, kicks out complacency and challenges existing business models. But it needs to be freed of the chains that hold it back.
If we want to regain or improve our place in the world after the pandemic, we need to demolish the roadblocks which erode entrepreneurialism in Australia.
Through strong management of the health crisis, Australia seems likely to have escaped the worst of the virus impacts and looks set to be one of the first nations to start to recover.
We have a once-in-a-lifetime opportunity to become a world-leading destination for investment and doing business, one which fosters entrepreneurialism and delivers more high-paying jobs and sustained, high living standards.
But the economy needs to be more dynamic than it has ever been. We need to make it easier for young people and those changing careers to train up and thrive in a new world.
Support for ensuring young people enter the workforce with the right skills is a non-negotiable. We are increasing spending on school education but not getting better results for our money.
We must spend more on vocational education and look for better models, including better integration between the VET sector and universities. We need a digital-ready workforce and greater cross-industry collaboration.
By valuing vocational training, especially as part of a digital future, we can encourage the next generation into robotics, artificial intelligence and advanced manufacturing, and innovate in more traditional lines of work.
Australian investment in research and development has fallen substantially in recent years and is now below 1.9% of GDP – well below the OECD average of 2.4%, and non-mining investment remains stubbornly weak.
We require a rethink of our R&D laws and proposed amendments to better align industry incentives to attract and retain R&D and broader innovative capacity domestically; and an increase in commercialization and scalability to lift our global competitiveness.
We need an industrial relations system that encourages employees and employers to negotiate gains in productivity and associated wage growth.
It is time to move beyond the zero-sum “us vs them” pre-pandemic world and embrace agreed flexibility in the workplace to make it easier for people to work their hours when and in ways which best suits them and their employer. The idea of “return to work” must include staggered working times, working from home and greater local options for conducting business.
Tyranny of distance and lack of opportunity no longer needs to cast a shadow over regional Australia. In the last few months we have seen a massive shift in the numbers of people moving around in our cities. Digital technology is the solution to many of the problems we face getting people back to work.
We can encourage enterprises to grow quickly to take advantage of new markets, and adapt successfully in response to greater disruption, with business regulations that are simple and outcome-focused, not complicated and prescriptive. We should encourage, not demonise, those who try and fail. One such example is our bankruptcy laws, which are not designed to support innovation in the same way as the US and need to be reviewed.
To make businesses more internationally competitive and ensure those taking commercial risks are adequately rewarded, we need a wholesale review of the tax and transfer system to better align Commonwealth and state taxes and remove inefficient taxes such as payroll taxes and stamp duties. Tax reform should not disadvantage the vulnerable nor unfairly penalise the prosperous. It should focus on maximising growth, efficiency and productivity and encourage workforce participation.
Government can help by providing a mix of direct and indirect incentives to increase investment, including making the instant asset write-off permanent, with its threshold increased and available to all companies, large and small.
Now is also the time for us to address our trading frameworks and implement change as part of the new post-pandemic world.
Every nation will be desperate for investment, strong export markets and secure supplies, which is why we need to improve our standing in trade. We are ranked 106th in the World Bank’s ease of crossing borders index. Our costs of labour, energy, transport, and taxes are a handbrake on key sectors of our economy. But with a population of 25 million people, we are mid-sized and rely on larger overseas markets for exports and supplies.
Import tariffs are low but they are not yet zero. We impose costs on Australian consumers and industry with non-tariff barriers to imports, at the same time as we complain about those that other countries impose on our exports.
We must also improve productivity of the import and export sector by improving data management. ACCI recently led the Trade Community System, a program to do just that. It identified at least a $1 billion improvement annually; and companies with highly digitised supply chains and operations could expect efficiency gains of 4.1 percent annually, while boosting revenue by 2.9 percent a year.
There is opportunity for government to become a partner, with many of Australia’s major ports, in making Australia a leading digital trade innovator in ways that could massively change the cost structures for the Australian economy.
By unleashing our economic potential as a world-class innovator, we will greatly improve our chances of reversing current forecasts showing us sliding out of the G20 group of wealthiest nations.
Our responsibility is not just to repair Australia’s economy, but to launch a recovery that trains our people and prepares our businesses for a competitive new world.
– James Pearson, ACCI Chief Executive
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