Australia has climbed one place in a global ranking on the competitiveness of 63 nations released today, with our overall performance remaining largely the same for the last five years.
In releasing the Australian results of the IMD World Competitiveness Yearbook, CEDA CEO Melinda Cilento said boosting Australia’s global competitiveness should be a central focus for governments, with the Federal election now clearing the way to step up our efforts in areas like tax and energy.
“Failure to reduce the company tax rate, bracket creep, stalled energy policy and lackluster productivity have been identified as weaknesses in Australia’s competitiveness in these latest rankings,” Ms Cilento said.
“Australia’s ranking has stalled, fluctuating narrowly between 17 and 21 in the last five years. The new term of parliament provides an opportunity to refocus attention and action on persistent issues where too little progress has been made over the past decade.
“The government has pledged to address personal income tax rates, which is a positive for the economy and would likely improve our current competitiveness ranking from a lowly 43 on this measure.
“We are also performing poorly on the corporate tax rate compared to other countries, ranking at 55, down from 50 last year. At some point, Australia needs to release this handbrake on business investment.
“On an important indicator of living standards, real GDP growth per capita, Australia ranked at 43 and highlights we need to do more to lift productivity as a driver of growth and prosperity rather than relying solely on population growth.
“Productivity is vital for driving better wages, better services and a more resilient economy so this needs to be an area with continued focus.
“There should be little surprise that the Yearbook highlights energy infrastructure and digital/technological skills as weaknesses for Australia falling to 55 and 44 respectively.
“These are two areas that have drawn considerable national focus in the last five years but we have failed to make progress.
“We know that innovation is key to keeping our economy strong and digital skills are going to be required to some level in every job in coming decades. We need to make sure we are keeping up with other nations in developing those skills.”
Ms Cilento said key strengths for Australia included the resilience of our economy, ranking at five, and our overall economic performance, which ranks at 14.
“If the recent Federal election told us anything, it is that Australians value economic strength. These rankings show we have a very solid base,” Ms Cilento said.
“Our solid economic base and the new term of Federal Parliament provide the perfect opportunity to tackle key policy areas holding us back.
“Australia hasn’t ranked in the top 10 most competitive nations since 2011, it’s time for Australia to step up.”
The rankings are part of the Switzerland based IMD’s 2019 World Competitiveness Yearbook, which compares and ranks 63 countries based on more than 340 business competitiveness criteria. Two thirds of the criteria are based on statistical indicators and one third is based on a survey of more than 6000 international executives conducted in March/April this year. CEDA is the Australian partner for the yearbook.
Overall Singapore moved to the top ranking from third in 2018, overtaking Hong Kong (2) and the US (3), which lost the top spot. The top five was rounded out by Switzerland and for the first time, the UAE.
Source – CEDA Media Release