High dollar, two-speed economy on the agenda at Prime Minister’s Economic Forum

Over 100 representatives from industry, government and the community gathered in Brisbane this week to discuss tactics to develop a more resilient economy.

Manufacturing, mining and the two-speed economy were reportedly all high on the agenda for discussion at the Prime Minister’s Economic Forum, held on 13 June.

“Our economy is among the strongest in the world – we have impressive growth, low unemployment, contained inflation, very low debt and a record investment pipeline. These strengths are only further confirmed by the release of economic data this week, such as the National Accounts and jobs figures,” said Prime Minister Julia Gillard.

“At the same time, the sustained high level of the dollar and the patchwork nature of our economy means not all Australians are feeling these economic benefits, making this a key point of discussion at next week’s Forum.
“The Forum will also discuss the need to maintain a focus on productivity and growth.”

Gillard says the Forum was to cover five main topics:

  • Australia’s Patchwork Economy and the High Dollar: opened by Reserve Bank of Australia Governor Glenn Stevens and the Deputy Prime Minister Wayne Swan.
  • Economic Transformation: Innovation and Collaboration: Opened by the Minister for Industry and Innovation Greg Combet.
  • Investment in Productive Infrastructure: opened by the Minister for Infrastructure and Transport Anthony Albanese.
  • Building the Workforce: Skills and Education: opened by the Minister for Tertiary Education, Skills, Science and Research Chris Evans.
  • Competition and Deregulation Reform Agenda: opened by the Minister for Finance and Deregulation Penny Wong.

Gillard reportedly provided a keynote address on Australia’s role in the global economy and ‘the Asian Century’, and Deputy Prime Minister and Treasurer Wayne Swan and Reserve Bank of Australia Governor Glenn Stevens lead sessions focussing on the nation’s patchwork economy and the high Australian dollar.

Australian Industry Group's role

According to Ai Group Chief Executive Innes Willox, who participated in the forum, creating a more productive workforce for the future are a central focus for the Ai Group.

"The challenge before us is to get the right skills in the right places at the right time, now and into the future,” said Willox.

“The choices we make in tackling this challenge will largely determine what type of workforce, indeed what type of economy we have in the future. We know that our prosperity hinges upon lifting our productivity and we also know that higher skill levels positively impact on productivity.

"We need a major boost to lift our inadequate language, literacy & numeracy levels in the workplace. 75% of employers report that their business is negatively impacted by insufficient language, literacy and numeracy skills. 

“As well, technology, particularly high speed broadband, has the potential to transform our business models, possibly in ways not yet imagined."

Willox, representing the Ai Group, said he would focus heavily on future-proofing the manufacturing industry in his discussions with the 130 Forum delegates.

“Industry believes that the response to the current lopsided economic environment must have both short-term and longer-term elements. Short-term is about addressing disadvantages now so the industry gets through intact and can build for a competitive future,” said Willox.

Wllox believes longer-term success will require:

  • Making our overall economy more productive;
  • Building our management and workforce capabilities;
  • Investing in new capital equipment;
  • Better, more systematic and more commercially orientated applications of our science and research strengths; and
  • Improving access to markets both here and abroad where, particularly in the context of competition with businesses in Asian countries, we confront a playing field that is tilted against us.

The Forum agenda also covered workplace relations, the carbon tax, taxation and regulation. 

Unions attend on mass

According to ACTU Secretary Dave Oliver, recent data has confirmed the resilience of the economy and labour market, but Australia faces serious challenges to deliver more equality and secure jobs so the prosperity is maintained and shared in future decades.

The ACTU reportedly attended the forum in Brisbane to call for the establishment of a series of industry councils where unions, employers and government can identify problems and develop solutions. The ACTU also prepared a presentation on a range of options for how secure jobs can be protected and created, and economic prosperity can be shared more broadly.

“The latest official data shows Australia continues to enjoy high rates of economic growth, job creation, solid wages growth and improving productivity,” Oliver said.

“However, despite the recent run of good economic news, we must be planning now to ensure secure jobs and economic growth continues well beyond the current mining boom. The benefits of prosperity have not spread enough across the community. Inequality is widening and the multi-speed economy is a reality.

“Some sectors, particularly trade-exposed industries such as manufacturing, finance and tourism are under pressure from the high exchange rate and because of the global downturn, with jobs lost or under threat.

“The mining boom will not last forever, and we must avoid a hollowed out economy. We need to continue to diversify our economic base, and to support sectors that are struggling.

“This will be achieved through collaboration between unions, business and government to identify problems and devise solutions."

Oliver said unions and the government have a shared interest in a prosperous economy, and unions are keen to participate in taskforces in industries like tourism, hospitality, finance, construction, mining and childcare and to plan infrastructure, skills and public services.

“The objective of the Economic Forum must be to plan for a strong economy that is fair and prosperous, offers secure jobs to all who want them, and equal opportunities for all," he said.

“What it must not become is a platform for a business ideology of diminished public services, less regulation, lower corporate tax, and fewer workplace rights.”