E will continue to argue for measures to restore Australia’s flagging pro ductivity growth, to make further gains in workforce participation, to build our business capabilities and equip ourselves to manage the pressures that are associated with the minerals boom.
The protracted negotiations with the independents led to much discussion about the importance of a stable govern ment. Equally, we need a govern ment that works.
The strength of our economy, fiscal position, location close to the new centre of global econom ic growth and human and physi cal resources give Australia opportunities and choices.
Despite this, recent reform efforts and policy execution have fallen short. The Government needs to develop a positive reform agenda. This should focus equally on the processes through which reforms can be achieved and on the design of these.
The Government needs to prioritise short- and medium- term agendas and focus on achieving them.
In the short term, three key issues are essential to Australia’s global competitiveness: investing in the development of a strong and growing skills base; encour aging innovation and business capability development includ ing with a fully-functioning R&D tax incentive; and settling down the new workplace relations system.
In the medium term, there will be major debates around climate change, taxation reform and pop ulation. The planned ‘Tax Summit’ could provide a valu able opportunity to consider and develop the positive directions set-out in the Henry Review; however, it will take much prepa ration. There is important progress to be made in the areas of infrastructure development, such as broadband, and we must also urge all parties to rebuild the integrity of immigration poli cy, perhaps through the appoint ment of a mediator.
Climate change will be particu larly high on the agenda of the next Parliament with the Greens’ majority in the Senate from July 1 next year.
Australia is not alone in grap pling with how to respond to cli mate change. Responses will vary around the world until a common position can be devel oped. If we are smart about it, Australia will build its response around the idea of least cost abatement. Though a carbon tax needs to be looked at, we need to acknowledge that all of the competitiveness issues that are associated with an emissions trading regime are also present with a carbon tax.
Certainly, in the absence of a national plan we face underin vestment in electricity genera tion, a rise in costs as capital equipment ages and the threat of electricity shortages a few years down the track.
While the ‘new paradigm’ of the next Parliament will involve a much higher level of consulta tion on this and many other issues, it is also critical that other stakeholders, including business, are fully engaged to achieve lasting advances.