Tony Abbott needs to adopt a new slogan. Instead of 'stop the boats' it should be 'stop the reviews'.
Results of the annual Committee for Economic Development of Australia/Business Spectator Big Issues Survey again show the priorities for the business community are taxation reform and enhancing productivity, competitiveness and innovation. The top three remain the same as the 2012 survey, with taxation reform jumping from five last year to four this year, showing its growing urgency.
These results are unsurprising and unambiguous. They reflect what CEDA, leading business organisations and economic commentators have been saying for some time – so why isn’t more happening?
In the first few months of the new federal government there has been an avalanche of new reviews announced. The previous government also conducted a number of significant reviews but little was implemented.
Reviews are important, decisions need to be made on fact and options explored, but much of this work has been done, the choices are obvious and review on top of review helps no one, least of all our economy. Governments shouldn’t hide behind needing a mandate for every decision by taking changes to an election. Governments are elected to lead, make the tough decisions and take action when it is in the national interest.
We seem to have been in an economic reform black hole for the last decade or more.
Taxation reform should be a no-brainer. Broadening or increasing the GST, or both, would allow for removal of other inefficient taxes that are burdensome for business and government and also provide a bigger revenue base to tackle the deficit.
The Big Issues survey results support this – and show the idea has backing within the business community – and we have also found this through previous CEDA research conducted earlier in the year.
Increasing innovation also throws up some obvious paths for the federal government – providing tax breaks for innovative practices and providing incentives to universities to work more closely with industry.
At the moment universities are rewarded for publishing in journals. Why aren’t we also incentivising universities to collaborate with industry to see ideas through to commercialisation? This would have a two-fold benefit: It would help align university research with what industry actually needs and ensure that ideas developed in Australia reach fruition. We know we have the research capabilities and facilities but we’re not utilising this capability to its full potential.
The automotive industry is a salient example – innovation remains a low priority, and instead the focus has been on government handouts.
Australia should be looking to countries such as Switzerland and Germany to see how, despite being advanced economies with similar high-cost environments, they are managing to be globally competitive in manufacturing. Innovating and continuously evolving and improving, both products and production practices, allows them to stay ahead of competitors.
Future areas of growth, such as those identified in the survey including energy, agriculture and education, health and aged care services, should be priority areas for Australia to reform to ensure we are efficient, flexible and innovative. This will allow these sectors to be internationally competitive and provide our future economic growth, as mining growth reduces.
Tony Abbott has created a persona as 'action man Tony', and yet all we are seeing so far is paper pushing. Let’s hope this phase is short lived.
Professor the Hon Stephen Martin is chief executive of CEDA.