First published by the Australian Financial Review, 8 August 2013
Australia is at a vital crossroads in its history. After two centuries of viewing the world through a substantially Anglo-European prism, the shift of global economic power to Asia demands that we must now redefine ourselves.
The decisions we take in the next months and years will define Australia in the 21st Century – the Asian Century.
Despite the fact that all major political parties recognise these momentous economic and cultural shifts, too often the public discourse focuses on short-term issues. A prime example of this is the monthly debate around the interest rate decision of the Reserve Bank of Australia. While such decisions are important for the economy in the short-term, it is not a policy lever that solves all our issues. A 25 basis point movement does nothing to address the major structural challenges our nation faces.
It would seem that matters pertaining to Australia’s international competitiveness and productivity have fallen victim to extreme short-termism and muddled priorities. The result is an environment where good suggestions for reform struggle for traction.
Ken Henry, Secretary to the Treasury for 10 years, underscored this point in a speech recently delivered in Shanghai where he expressed concern that policymakers have not pursued all the reforms necessary to increase the resilience of the Australian economy to shocks, such as the end of the mining investment boom.
CPA Australia’s increasing concern about Australia’s future prosperity and place in the Asian Century, its falling international competitiveness and the lack of political discourse on these issues, led us to commission Harvard alumnus and competitiveness expert Professor Michael Enright and Asia specialist Professor Richard Petty to undertake a year-long investigation into Australia’s international competitiveness.
Our research drew on the largest ever independent survey of Australia’s international competitiveness. The findings are rigorous and free of an agenda. With 6000 domestic and international business respondents, the book Australia’s Competitiveness: from Lucky Country to Competitive Country paints the most accurate picture of Australia’s international competitiveness that we’ve ever seen.
It revealed that when compared to the vast majority of Organisation for Economic Co-operation and Development (OECD) nations, Australia’s relatively strong economic performance has hidden significant structural issues and created a sense of complacency towards much needed investments and reforms.
Australia’s future rests with confronting the opportunities and challenges of our changing economic circumstances in order to maintain global relevance. As a national priority we have to urgently transition to a knowledge-based economy.
Our reality is that a child born today will spend their entire working lives with China as the world’s biggest economy. Government, business, trade unions and the community at large should be placing a higher priority on access to and knowledge of Asian markets, languages, culture and politics.
Australia has been a lucky country, but we cannot rely on luck indefinitely. We need a vision for Australia, a long-term reform process and a community spirit united in achieving it. The alternative scenario is that we risk Australia becoming a peripheral player in the Asian Century. The high paying jobs of the future for our kids lie in boosting Australia’s international competitiveness. It is our responsibility to take decisive action now to create those jobs.
Alex Malley is chief executive of CPA Australia.