World ranking slides for Australia’s International Competitiveness

“The fall in Australia’s competitiveness ranking should be taken very seriously by Government & Industry,” said Ian Murray Executive Director of the Export Council of Australia. Today’s announcement in the Australian Financial Review has Australia’s world ranking falling to fifteen, ten places lower than it was two years ago.

Mr. Murray said that “the report by the Committee for Economic Development in Australia (CEDA) and the comments expressed by CEDA Chief Executive Professor the Hon Stephen Martin reflect what the council has seen emerging in export now for the last two years.”

 “Australia’s exports”, he said “are being strangled by the high cost of labour, red tape upon red tape, duplication of Government regulation, the GFC and of course the high Aussie dollar.”

Quoting a recent paper prepared by the Export Council of Australia, where it argued that while resources are booming there was clear evidence that even that sector was being hamstrung by unnecessary regulation, high taxes and massive difficulties in securing labour. The debate on ‘guest labour’ is but another issue that if not handled properly will result in the slowdown of projects vital to Australia’s wellbeing.

“The issue on whether the resources sector will continue to boom while important it is not the only issue on the table. Diversity of exports was a key factor,” Mr Murray said in “assisting Australia handle the GFC and it will continue to be a factor in the future. Those countries that concentrated on the services industry for example were really hurt during the crisis.”

Australia, Mr Murray said “needed to have a strongly balanced portfolio and focus attention on high value high technology sectors.”

“The Export Council,” he said “strongly supported the comments expressed by Professor Martin particularly those relating to the need for an increased investment in skills, particularly in science, research and technology. Despite the high dollar Australian companies in high-tech manufacturing and services to the resources sector, to name just two, remain quite strong.” Mr Murray said.

“On the issue of what should be done,” Mr Murray said “they had no argument at all with Professor Martin. Government needs to promote skills development, focus on skilled migration, including those under Enterprise Migration Agreements as well as promote R&D and most importantly attack over-regulation and trade facilitation costs. Companies must focus on innovation driven by excellence in R&D that will strengthen their competitive advantage and enhance their margins.”

“Being number fifteen is simply not good enough in a country blessed with resources, good education and natural ability.  Australia cannot afford to be apathetic. Government and business,” Mr Murray said “need to work together to realise the potential we have sitting right at our feet even if that means making decisions that some sectors won’t like.”

Ian C Murray AM
Executive Director
Export Council of Australia