Australian competitiveness – falling
Monday 9 September 2013
SALAMAT: What will Tony Abbott’s top priorities be coming in to power?
MALLEY: Well I think business broadly is pretty happy with the result, a government that has enough seats to rule the country appropriately, so that’s a good start. Certainly the country is looking for less transaction costs, more sensible and balanced regulation and actually the opportunity to feel the confidence to invest again. So that’s certainly the theme that he’s presenting, he’s been consistent on that theme. We, like many organisations, have had intimate conversations with the incoming government about those things and we’re reasonably comfortable that there is a discipline around that with the new elected government.
SALAMAT: What do you think is going wrong with the Australian economy, many people have talked about the end of the mining boom, but reports about that seem exaggerated. Is it an over-reliance on that industry?
MALLEY: I think there’s been a sense that we had an opportunity that’s been squandered. All we’ve seemed to have done in government and media in Australia is talk about how our economy is healthier here than in Europe and America, but the truth is both of those economies have gone through far worse scenarios than we have. So there is a real sense that we lost an opportunity to balance our economy and restructure it more when the mining industry was at its peak. There is a sense now though that if there is a reduction in the tax around mining that may actually regenerate a little bit for a little longer, and there’s a good reason to feel that and fundamentally to get to the point where there are other parts of the sector like the motor vehicle industry that’s starting to face some real issues about where it’s future lies. Overall, I think there’s been a lack of confidence knowing we were going into an election, we had a minority government and business has just held its breath during this time. So we feel a bit like the Japanese do, that we’ve won the Olympics and now we might be able to get on with business.
SALAMAT: You mentioned the motor industry, and doesn’t that really reflect, in a deeper sense, what’s happening with the economy there, a lack of sliding competitiveness?
MALLEY: Absolutely! And we commissioned Australia’s most thorough research on competitiveness several months ago and launched that to all government officials and the opposition. The fact is, we have a place to play in the motor vehicle sector, but it’s more at the innovation, leadership area, rather than perhaps at the manufacturing level. So, there are some issues and you’re absolutely right, that is symptomatic of some of the issues Australia has to address. So, in our competitiveness analysis, it’s talked about various scenarios of Australia’s future and the one that we had presented very strongly both to the former government and the incoming government is that we need to be attached to Australasia…we need to create the Australasian Century, not expect it to come to us comfortably. And they way to do that is to actually change the culture and the way we do business, to educate students from first class in Australia to various Asian languages and to really understand that we need a better culture so that we can actually integrate and work in Asia far more effectively than we have in the past.
SALAMAT: Well that’s what I wanted to pick up on actually, because this is your quote “we’re in the Asian Century but how close are we to being in an Australasian Century”. It’s a fair old question, but you’re the one posing it and you can answer it here for me now if you would.
MALLEY: Yes, look I prefer to answer my own questions! But the fact is, in our organisation we’ve been in Asia for 60 years so we have a sense of how hard that’s been to build that relationship and actually execute it and make it work for both sides of that transaction. We think Australia is only in its infancy in understanding the opportunities of the Asian Century and it’s simply not a matter of just going to Asia and doing business, it’s a matter of building across culture. So this government for example is doing something that they’re talking about being the reverse Colombo plan, which is effectively making students from international markets come to Australia and for our students to go to their markets which is a different approach. So we really do need to do that. We need the government to work with small to medium business, we think that’s a big opportunity and to create further opportunities in addition to Austrade that’s doing very good work, we feel they should be funded more effectively so that they’re able to integrate and allow business to business conversations between the two markets. We’ve got a series of analyses that the former government put into their white paper and we’re very strongly pushing that because we feel that if we don’t, people are just going to expect it to fall into our lap and it’s just not going to happen. And we need to stay relevant at a cost level, at an efficiency level and at a cultural level.
SALAMAT: And Alex, very quickly, will this all help the Australian cricket team?
MALLEY: (laughs) Well, of course you can only go up sometimes and I think that’s where we are at the moment Rishaad, but it is a wonderful microcosm of business and life, that if you don’t have a succession plan when you’re on top, then when things start to change, and people leave your organisation you’re not ready for the next generation. So the theme about that succession planning is that we need a better opportunity for young players to come in, and I should say that my nephew is topping the averages in Middlesex in England so I’m hoping that he sees sense and comes to Australia and joins the Australian cricket team.
SALAMAT: Alex, thank you, great talking to you. Alex Malley there from CPA Australia.