Australian Businesses Looking Abroad for Opportunities After 20 Years of Declining Competitiveness
The high quality of life enjoyed by Australians is in jeopardy if the country does not address its productivity issues.
Australia’s global competitiveness is on the decline, with more businesses struggling to succeed domestically and seeking opportunities abroad.
A recent report by the Business Council of Australia sheds light on current trends, such as stagnant productivity growth and increasing pressure from international competitors, raising concerns about the nation’s economic future.
Released on Nov. 18, the report stated that sliding competitiveness leads to lower productivity by diverting resources away from more productive sectors, potentially resulting in more persistent inflation.
Slipping in Global Rankings
The report reveals that Australia has been slipping in international competitiveness rankings for two decades, with productivity growth in the last decade being the worst in six decades.
It warns that Australia may lose out to other countries vying for growth opportunities, especially those implementing initiatives to attract investment that may have gone to Australia.
Warned about missing out on growth opportunities, the report emphasizes the need for Australia to act promptly.
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The report also emphasizes the need for Australia to take action in order to reverse the dropping productivity levels and maintain the current quality of life.
Australia Urged to Act
As the Trump administration plans to reduce the U.S. corporate tax rate, Australia faces the risk of capital flight if it does not make similar changes.
Industrial relations experts suggest that Australia needs to follow the deregulation agenda set by the Trump administration to stay globally competitive.
Reverse Dropping Productivity
The report recommends streamlining red tape, reverting recent workplace relations changes, and implementing tax reforms to encourage business investment and improve education quality and training.
Efforts to address skills shortages need to be intensified, particularly in sectors such as construction trades, to prevent under-skilled graduates from entering the workforce.
The report also stresses the importance of energy transition for the economy’s decarbonization, highlighting potential challenges that may increase energy costs and worsen the cost-of-living crisis.
To tackle these challenges effectively, Australia needs to ensure a reliable energy supply that can meet demand, even during periods when renewable sources are not sufficient.
