The latest Global Competitiveness Report for 2014-15 has been released by the World Economic Forum (WEF) and it showed Australia has slipped another place to come in 22nd against the 15th place it held back in the 2009-10 survey.
The Australian Industry Group is the WEF’s local research partner and CEO Innes WIllox said this morning that, “Australia’s absolute Global Competitiveness Index (GCI) performance static this year, and broadly stable since 2010-11, more and more of our competitors are leap-frogging ahead as they improve their performance and competitiveness”.
We just aren’t improving, but Willox says that a large part of that stems from government regulatory burden “where our ranking has fallen to 124th in 2014-15, from 60th in 2010-11”.
This report should be a wake-up call for an economy in transition and a transition that looks like it is all too heavily reliant on housing and house prices at the moment.
Willox notes that:
The WEF Report also highlights the need for government and industry to foster a greater culture of business investment and innovation, given our relatively low rankings for ‘technological readiness’ (19th), ‘business sophistication’ (28th) and ‘innovation’ (25th). These are issues we have raised on behalf of members in our submissions to the Financial System Inquiry and Competition review this year, and will again in the upcoming taxation whitepaper.
It’s not all bad news but the positives, which include 1st for tertiary enrolments, legal rights and managing inflation, and with 3rd for soundness of our banks, 4th for broadband subscribers and 5th for the days to start a business, appear to form a base which needs to be built on.
It’s a point picked up on by Willox who said the fundamentals to improve competitiveness are in place, “but this will require a concerted effort to address serious shortfalls in the key areas of labour flexibilities, business regulation and company taxation.”
To reinforce his point, Willox said: “Standing still is not an option – it is clear that improvement is necessary just to keep up.”
Indeed it is if Australia wants an economy which is more diverse than the twin pillars of mining and housing.