The government to be elected on 21 August will have to deal with a domestic and world economy facing renewed economic uncertainty, according to Australian Industry Group chief executive, Heather Ridout.
According to Ridout, the government will also be required to meet the demands of a booming resources sector and all the pressures this entails, such as skill shortages, a high dollar and further pressure on interest rates.
“At the same time, Australian industry is facing enormous volatility in business conditions and a recovery which is far from assured,” said Ridout.
“Underneath all of this, there are big structural issues which business will be looking for all parties to address over the next term of the Parliament. In particular, the incoming government will have to make some wise decisions to lift our flagging productivity performance and boost workforce participation to underpin efforts to address our big demographic challenge.
Ai Group will be seeking from all parties policies to build a balanced, robust and sustainable economy, Ridout says.
The Ai Group policy priorities in key areas include: skills and education; workplace relations; tax reform; climate change policy; infrastructure; regulatory reform
“While we have been world leaders in our economic performance through the global economic and financial crisis, we face the significant structural pressures from the re-emergence of the two-speed economy and we have not seen a commensurate boost to productivity,” said Ridout.
“The most recent OECD data ranks Australia’s productivity behind levels in nations such as Norway, the Netherlands, the United States, France, Germany, Sweden and the UK. Australia’s labour productivity level is approximately only 80 per cent of that in the United States.
“So much comes back to productivity improvements: our ability to improve living standards and social opportunities; our ability to compete internationally; our capacity to create stimulating and secure jobs and our capacity to address the significant challenges posed by demography and environmental pressures.
“In addition, longer-term productivity improvements, particularly in sectors such as manufacturing, tourism and agriculture, are central to addressing the substantial challenges posed by the two-speed economy phenomenon associated with the minerals boom.
“In the context of the structural pressures created by the continuing surge in commodity prices, all parties need to refocus on building Australia’s long-term capabilities with a particular emphasis on non-mining export and import-competing industries such as manufacturing, tourism, education and agriculture.”