Peak business groups want reforms to increase productivity
Business groups want tax, red tape reduction and harnessing the potential of AI to be at the top of the agenda when the Federal Government's productivity roundtable meets in August.
The peak groups welcomed the event, to include business, union and industry leaders, announced by Prime Minister Anthony Albanese yesterday in his first major speech since the election.
Ai Group chief executive Innes Willox said the roundtable was "ideally timed" and needs to focus on immediate reforms that can turn the country's productivity performance around.
"Since the pandemic, and even before that, Australia's productivity performance has been woeful. With productivity the ultimate wellspring of national and individual wealth and prosperity, we cannot afford to let it slide sideways for another five years," Willox said.
"Lifting productivity will come through more efficient use of the tools we have at our disposal. Areas such as tax, regulation, skills, energy, workplace regulation, trade, technology adaptation, and infrastructure development are all key to our productivity uplift and well-being."
Bran Black, chief executive of the Business Council, also said they plan on bringing forward "constructive policies that will drive more business investment."
"These policies include red tape reduction, faster approvals on major projects, harnessing the potential of AI, advancing research and development, undertaking broad tax reform, unlocking more trade and investment, and delivering the energy transition," Black said in a statement.
The Australian Retailers Association similarly called for a "retreat" in regulation.
"Sadly, we have climbed a summit of 'peak' regulation and firmly planted an Australian flag on it," said ARA chief executive officer Chris Rodwell in a statement.
"We must retreat because this mountain of regulation comes with a cost. Governments see it in flagging economic performance. Retailers see it in the cost in doing business. Workers see the cost in decreased job opportunities. Regrettably, Australians see the cost at the checkout."
Labour productivity growth in Australia's market sector averaged around 0.6 per cent per year from 2017/18 to 2023/24, below the average of 1.6 per cent over the previous two decades, according to the Reserve Bank of Australia.
According to the Ai Group, it is also critical that the roundtable focuses on private sector investment as the economy and labour market have been "unsustainably reliant" on government spending.
Previous data from the Australian Bureau of Statistics showed that employment in the public sector has increased by 17%, while the private sector added only nine per cent of jobs.
"We need to create the conditions for private sector investment to rise materially and urgently if productivity and growth are to get back on track," Willox said.
"This summit will provide an opportunity to work on getting our key policy settings on the right footing to meet the economic opportunities Australia now faces. It cannot be a set-and-forget exercise."
Meanwhile, the Activate Australia's Skills campaign is seeking reforms in the country's overseas skills recognition system to unlock $9 billion in productivity and economic gains.
In a statement, it called for the establishment of a single national governance system for all overseas skills and qualifications recognition, as well as a more joined-up system that links skills recognition for migration purposes.
It slammed the current system as "bureaucratic, expensive, and disjointed."
According to the campaign, about 620,000 people in Australia are working below their skill level due to challenges in getting their skills and qualifications recognised, leaving them unable to fill workforce gaps across industries.
"What we are talking about is a common-sense productivity solution: fix the skills recognition system so qualified people can work at their full potential and do the jobs we desperately need them to fill," said Campaign Director Dane Moores in a statement.
"Skills recognition reform is the best way to kickstart Australia's productivity project."
