The Trans-Tasman Business Circle, with Newport Consulting, has pulled together insights on productivity gathered from a series of briefings in 2013.
Speakers at the briefings included Tony Shepherd, President of the Business Council, and Peter Harris, Chairman of the Productivity Commission. The Trans-Tasman Business Circle also surveyed businesses to get their direct opinions.
Here are the top five obstacles, according to the briefings and industry survey, holding Australia back:
- The slowing down of the mining boom – as noted by almost every speaker throughout the 2013 series, Australian economic growth of the 2000s, due to a mining boom unprecedented in both output and earnings, has left us blinkered to the reality in other sectors. While the mining boom did generate a flow‑on effect to sectors such as construction, banking and finance and parts of the service industry, Australians failed to notice the deep-set productivity malaise in industries such as manufacturing, agriculture and tourism. A long‑term commitment must be made to supporting sectors outside mining and resources.
- Overt focus on short‑term fixes – political debate in recent years has been overshadowed by government publicity stunts designed to win votes. Meanwhile, education, skills and training has fallen in quality and neither political party appears to show commitment to creating a long‑term vision likely to outlive the term of their government.
- Sky‑high wages that cripple business growth – Wages growth rate of 4 percent has hampered employment in many sectors, including mining, and stifled the ability of sectors as diverse as shipping, road transport, agriculture and energy to compete with overseas providers. This undermines Australia’s competitiveness overseas, and limits our ability to grow long‑term. An inflexible industrial relations scheme has further exacerbated Australia’s inflated wages scenario.
- Complexity in the tax and regulatory environment – As many of our speakers pointed out, productivity among australian businesses is slowed daily by time‑consuming licensing requirements, changes in the regulatory environment and a complex tax system. Australians pay 125 taxes each year, of which 99 are regulated by the federal government, 25 by the states and one by local government. Business taxes are high compared with most asian and european competitors. Our panellists argued for more of the tax burden to be borne by consumers rather than businesses via a rethink of the GST.
- Depleted government reserves and fiscal gaps – The economic downturn of 2008‑09 wiped out a sizeable proportion of the government’s fiscal surplus, a problem compounded by the subsequent impact on tax takings, as business earnings across the country began to falter. Restoring the government’s fiscal health is as a key step to boosting the government’s ability to spend.
In 2014, the Trans-Tasman Business Circle will concentrate on solutions. It said: “We have identified the barriers and it is time for us to start putting systems in place. Stay with us on the Productivity journey in 2014 where we will explore in more detail strategies that companies need to start embracing as part of meeting the Productivity challenge.”