Australia’s fall down the list of an important international competitiveness ranking, released today, underscores the need for urgent action to boost competitiveness and help secure our place in the Asian Century, says global accounting and finance body, CPA Australia.
Australia’s ranking on the 2013 IMD World Competitiveness index has dropped from 15th to 16th position. It continues the slide from 5th place on the 2010 index and 9th in 2011.
Chief Executive of CPA Australia, Alex Malley, said this latest data reinforces Australia’s competitiveness is heading backwards.
“With the looming end of the mining investment boom, the big question remains: what’s the plan to help other sectors of the Australian economy step up to the plate?"
“My concern is that Australia’s one-position fall on IMD index will lull politicians and policymakers into a false sense of security, misbelieving that things are on the improve because the decline isn’t as dramatic as recent years.
“With the Asian Century upon us, now is the time for Australia to be turning the competitiveness corner, not continuing to slide.”
Earlier this month CPA Australia released the most comprehensive research ever done on Australia’s international competitiveness, drawing on the insights of 6,000 Australian and international business leaders.
The findings emphasised that Australia’s economic growth rates are trailing behind those of our major Asian competitors, many of whom are already ranked higher on the competitiveness index.
“Our research showed that we are not as competitive as we think we are. Australia is at risk of becoming complacent when it comes to its economic performance. For too long we’ve relied on the mining sector to prop us up, and have found solace in misleading comparisons to OECD nations,” Mr. Malley said.
“The countries and markets we need to be benchmarking against are in our region. Hong Kong, Singapore, Taiwan and Malaysia are already ranked higher than Australia, and China is improving its competitiveness ranking.”
“If we are to successfully compete with other nations in the Asian century, Australia needs to put in place strategies that will enable us to create stronger links with Asia, harness new and emerging opportunities, and leverage key markets in the Asia Pacific region and a changing global economy. This is where the high paying jobs of the future will come from.
“Australia has arrived at the end of its competitive bungee cord. We will either rebound back up, or the cord will snap and we will continue to fall. It’s the duty of governments, business, unions, academics and the community at large to work towards ensuring this doesn’t happen.” Mr. Malley said.
The key findings of CPA Australia’s book, Australia's Competitiveness: From Lucky Country to Competitive Country are:
- Australia’s overall economic performance has been relatively strong in recent years but our growth rates have trailed behind rapidly growing economies in Asia.
- Australia needs to improve its knowledge of, and engagement with, Asia. This includes comparing ourselves with non-OECD Asian nations. While comparisons with the UK and the US will remain important, China and other emerging nations should be the real benchmarks.
- The relatively high cost of doing business in Australia puts us at a disadvantage, especially high employment costs.
- Australia needs to invest more in education and training and a highly skilled workforce to increase its competitiveness levels and become a knowledge economy.
- Australia needs to improve its infrastructure to world-class standards, including transportation, communication, utilities and technological infrastructure.
- Australia needs to capitalise on its close proximity to Asia, including becoming the Asia Pacific centre for the 24-hour a day business operations of international companies involved in high-value, knowledge-intensive activities.
- Tax reform is a key issue for Australia. Many believe that inefficient state taxes need to be replaced with a higher rate or broader GST.