'Australia must urgently address its stagnant productivity'
Australians go to the polls this weekend for the federal election after months of debate and weeks of campaigning. As politicians make their final pitch to voters, HRD looks at what business wants the next government to focus on.
According to the Australian Industry (Ai) Group, a key focus for the next govenment must be to pull the country out of a productivity slump.
“Australia must urgently address its stagnant productivity to help support better living standards and higher wages now and into the future. Industry is already doing the heavy lifting – improving efficiency, upgrading skills of their existing workforce and investing more in technology. Governments must support these efforts,” the group said in its Election 2025 policy papers.
It said recent volatility in the global financial and currency markets and uncertainty created by by changes in US policies were a "significant risk to the economic outlook".
"Our next government must address these fundamental challenges and recognise that industry policy is critical to help accelerate real income growth and improve productivity."
The group also called for a reassement of workplace relation laws, easing the cost of doing business and better control of future spending "through efficiency strategies and more disciplined spending targets".
Business Council of Australia chief executive Bran Black argues policies are needed to make Australia a more attractive place to do business, which will lift productivity, increase wages and improve living standards.
"What is critical is that both parties commit to sustainable spending that drives productivity and does not put pressure on inflation," he said.
BCA also listed five critical national issues - cost of living, the housng crisis, achieving net zero by 2025, developing a skilled workforce for the future and delivering quality health and care services.
Ai Group’s annual industry outlook survey released in January highlighted concerns over productivity, warning industry leaders remained "pessimistic" about Australia's economic prospects and were cutting long-term investment.
"The survey reinforces that without a clear change in policy direction, the leaders of businesses that are critical to our economic future believe we will not meet our clean energy and housing construction targets and are poorly placed to meet the productivity and competitive challenges we face. They are highly concerned about continued weak market conditions and see little relief on the horizon," said Ai chief executive Innes Willox said in a statement.
The Productivity Commission is already working on an inquiry into how to boost productivity with preliminary recommendations expected later this year.
Ai Group say more reforms are also needed for skills and education stating the need for “better economic and workforce development solutions that drive productivity and better connect workforce demand and supply,” as well as supporting “labour market entry and retraining to support upskilling and reskilling of existing workers.”
After years of warnings, it seems that this election politicians are listening.
Writing in The Australian on April 23, Treasurer Dr Jim Chalmers said Labor's vision for a second term was "rebuilding incomes, reinforcing resilience and boosting productivity".
"We know business conditions are difficult and our economy, like almost every other advanced economy, is not productive enough. This problem didn’t show up a few years ago, it has been with us for two decades,” Dr Chalmers wrote.
The Liberal Party say they will “unlock productivity” and drive growth by setting up a new body called Investment Australia to reduce costs in financial services, construction, and resources and energy, accordng to information on their website..
“Investment Australia is a structural reform that will lower costs and send a lasting message that Australia is open for business,” Shadow Treasurer, Angus Taylor, says.
Adam Bandt and The Greens say they are focused on tackling the cost of living by “making big corporations and billionaires pay their fair share” and raise $514 billion.
The election is held on Saturday, May 3.
