Business owners have long complained that Australia is uncompetitive against global peers, and the latest figures from the World Economic Forum have confirmed this belief.
“The WEF’s latest Global Competitiveness Index shows that yet again, Australia remains outside the top 20 most competitive nations,” said James Pearson, chief executive of the Australian Chamber of Commerce and Industry (ACCI).
“In just one decade, Australia has fallen from 10th to 21st on the Global Competitiveness Index. This year’s report confirms what we already know. Our biggest weakness is in the areas of innovation, tax reform and workplace relations.”
In the annual global ranking of 137 countries, Australia ranked 21st overall – up one place from the previous rankings, but still behind similar countries including the United Kingdom (8th) New Zealand (13th), Canada (14th) and Israel (16th), and just ahead of France (22nd).
The most competitive nations are, in order: Switzerland, the US, Singapore, The Netherlands and Germany.
“Australia’s overall performance is not remarkable: in most pillars it does not rank among the top 25 countries,” the WEF stated.
According to the report, Australia is being held back by restrictive labor regulations, tax rates, inefficient government bureaucracy and policy instability, which are identified as the four most problematic factors for doing business here.
Least problematic are public health, crime and theft, corruption and inflation.
However, the report highlighted a “noticeable” drop in supply of infrastructure, particularly communications infrastructure.
It also noted that Australia has comparatively high performance in higher education and training, “which reflects its capacity to produce a large pool of qualified workers.”
This appears to be at odds with the experience of many local employers, given the ongoing criticism of the 457 visa axing and complaints of chronic skills shortages.
Such a disconnect between the volume of qualified workers being produced and the number actually available in the local workforce is suggestive of an overreliance on international students, who return to their home country upon completion of their studies.
“The reality is that many other nations have been reforming their economies faster than us,” said Mr Pearson.
“We need to reduce our company tax rates to be competitive with the rest of the world and ensure we have world-class domestic policy settings to provide a business environment that unleashes our entrepreneurs.”
Mr Pearson also said Australia needs to provide better assistance to employers to take on trainees, remove barriers to trade and investment, as well as slash red tape for local businesses.
“We must return to the economic reform agenda and address the issues that are holding our economy back. Improving our global competitiveness will ensure that all Australians benefit from the increased job opportunities and wage growth generated by a growing, competitive Australian economy.”
Adam Zuchetti is the editor of My Business, and has steered the publication’s editorial direction since early 2016.