The World Economic Forum’s yearly global competitiveness report showed Australia improve by one place, but certain indicators showed reform was badly needed, according to the Australian Industry Group.
The country improved its ranking from 22nd to 21st out of the 140 countries involved. However, it was outranked by nations with similar economic profiles (Canada placed 13th, up from 15th in 2014-15, and NZ 16th, up from 17th), noted the Ai Group, which is the official Australian research partner to the WEF.
Australia was in the top ten for financial and market development (7th), higher education and training (8th) and primary education (9th).
Other indicators illustrated the urgent need to improve workplace relations, taxation and innovation performance. The Ai Group’s chief executive Innes Willox said the period up to next year’s federal election needed to include “rigorous and imaginative policy debate and development” to address these areas.
“We continue to lag globally on labour market efficiency (36th) with Australia ranking very poorly on hiring and firing practices (126th); flexibility of wage determination (117th); and the effect of taxation on incentives to work (110th),” said Willox in a statement.
“Our innovation rankings are also disappointing – we rank 27th for company spending on R&D and 25th for capacity to innovate.”
The top five most competitive nations in the report were identified as Switzerland, Singapore, the US, Germany and the Netherlands. Australia’s biggest trading partner, China, remained in 28th place.
India was one of the big movers, climbing 16 places to 55, with, according to Financial Express, was “largely attributable to the momentum initiated by the election of Narendra Modi, whose pro-business, pro-growth and anti-corruption stance has improved the business community’s sentiment.”
Overall, the WEF warned that global economic expansion was being hampered by weak productivity, and growth was unlikely to return to pre-GFC levels