AUSTRALIA ADJUSTING: Optimising National Prosperity
Total Page：16
File Type：pdf, Size：1020Kb
National South Australia and the Level 13, 440 Collins Street Northern Territory Melbourne VIC 3000 Level 7 GPO Box 2117 144 North Terrace Melbourne VIC 3001 Adelaide SA 5000 Telephone 03 9662 3544 PO Box 8248, Station Arcade Fax 03 9640 0849 Adelaide SA 5000 Telephone 08 8211 7222 Fax 08 8211 8222 New South Wales and the ACT Level 14 Victoria and Tasmania The John Hunter Building Level 13, 440 Collins Street 9 Hunter Street Melbourne VIC 3000 Sydney NSW 2000 GPO Box 2117 GPO Box 2100 Melbourne VIC 3001 Sydney NSW 2001 Telephone 03 9662 3544 Telephone 02 9299 7022 Fax 03 9640 0849 AUSTRALIA ADJUSTING: Fax 02 9232 7559 Australia Adjusting: Western Australia Queensland Level 5 Level 17, 300 Adelaide Street 105 St Georges Terrace Brisbane QLD 4000 Perth WA 6000 Optimising national GPO Box 2900 PO Box 5631, St Georges Tce Brisbane QLD 4001 Perth WA 6831 Telephone 07 3229 9955 Telephone 08 9228 2155 OPTIMISING NATI prosperity Fax 07 3229 8166 Fax 08 9228 2166 November 2013 O NAL PR O SPERITY Australia Adjusting: Optimising national prosperity November 2013 About this publication Australia Adjusting © CEDA 2013 ISBN: 0 85801 290 1 The views expressed in this document are those of the authors, and should not be attributed to CEDA. CEDA’s objective in publishing this collection is to encourage constructive debate and discussion on matters of national economic importance. Persons who rely upon the material published do so at their own risk. Designed by Robyn Zwar Graphic Design Photography: Cover top left: Sheep shearing workers in Cunnamulla, Queensland, September, 1948. Newspix/Fred Carew. Cover top right: New cars on the production line at the Ford Motor Company’s Eagle Farm workshops, July 11, 1955. Newspix/Cliff Potter. All other images: iStock Photo Library. About CEDA CEDA – the Committee for Economic Development of Australia – is a national, independent, member-based organisation providing thought leadership and policy perspectives on the economic and social issues affecting Australia. We achieve this through a rigorous and evidence-based research agenda, and forums and events that deliver lively debate and critical perspectives. CEDA’s expanding membership includes 700 of Australia’s leading businesses and organisations, and leaders from a wide cross-section of industries and academia. It allows us to reach major decision makers across the private and public sectors. CEDA is an independent not-for-profit organisation, founded in 1960 by leading Australian economist Sir Douglas Copland. Our funding comes from membership fees, events and sponsorship. CEDA – the Committee for Economic Development of Australia Level 13, 440 Collins Street Melbourne 3000 Australia Telephone: +61 3 9662 3544 Fax: +61 3 9663 7271 Email: [email protected] Web: ceda.com.au AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY 3 Contents Foreword 5 CEDA introduction 6 Section 1 The economic imperative: A national productivity policy Chapter 1.1 14 Regaining competitiveness: The economic imperative Nathan Taylor Chapter 1.2 23 An agenda to revive Australia’s competitiveness Dr Vince FitzGerald Section 2 Economic flexibility Chapter 2.1 Addressing rigidities in the economy: 34 Re-energising National Competition Policy reform Professor Graeme Samuel AC Chapter 2.2 43 An efficient and competitive taxation system Professor Greg Smith Chapter 2.3 54 Adaptive and efficient federalism Professor Kenneth Wiltshire AO Chapter 2.4 66 Productivity enhancing regulatory reform Professor Sinclair Davidson Chapter 2.5 72 Sustainable and efficient delivery of urban infrastructure Vivienne King Chapter 2.6 77 Delivering efficient public infrastructure: Some new trends Professor Peter Newman and James McIntosh Chapter 2.7 86 Smart infrastructure Catherine Caruana-McManus AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY 3 Section 3 Incentivising innovation Chapter 3.1 92 Innovation Australia: How we measure up Professor Roy Green and Dr Danielle Logue Chapter 3.2 107 The innovation ecosystem Professor Göran Roos Chapter 3.3 123 Policy innovation for innovation: Income-contingent loans Professor Glenn Withers AO and Dr Nitin Gupta Chapter 3.4 132 A proposal for industry-led innovation consortia Professor Beth Webster Chapter 3.5 139 Sectoral revolution through technological developments Dr Ian Oppermann Section 4 Capability and workforce development Chapter 4.1 152 Key trends in Australia’s workforce Philip Bullock Chapter 4.2 161 Human capital and economic growth Peter Noonan and Andrew Wade Chapter 4.3 179 The future of work Phil Ruthven Chapter 4.4 190 Australia’s industrial relations system and the need for organisational agility Professor Paul Gollan and Dr Senia Kalfa AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY 4 5 Foreword CEDA’s major research and policy project for 2013 Australia Adjusting: Optimising national prosperity, is the culmination of several years’ work. It is being delivered at the perfect time. Most agree that the peak of the resources boom has passed, which means as a country we must examine what can deliver the next source of economic growth and prosperity for Australia. This, coupled with a new Federal Government, provides the perfect opportunity for renewed vigour and focus on a reform agenda that looks to the long term. The type of reform we haven’t seen in Australia for 20 years. Through this publication CEDA has brought together leading thinkers from across Australia from industry, government and academia to discuss and analyse a way forward. CEDA has used these contributions to underpin the development of a proposed reform agenda. As a result, CEDA is calling for a range of reforms that would form the basis of a National Productivity Policy to drive sustained productivity growth for our nation. It focusses on three key areas: • Economic flexibility • Capacity to innovate; and • Maximising the skills and capabilities of our workforce. CEDA has focussed on these three because together reform in these areas has the potential to deliver the results we need to drive productivity improvements. I would like to thank the publication editors, contributing authors and CEDA advisory group for their rigorous and thoughtful contribution to this very important publication. I hope you find this publication a useful resource and that we see the proposals out- lined debated and discussed on the national agenda as a matter of priority. Professor the Hon. Stephen Martin Chief Executive CEDA AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY 4 5 SECTION 4.0 INTRODUCTION Australia Adjusting: Optimising national prosperity Professor the Hon. Stephen Martin Chief Executive, CEDA Australia’s long-running economic expansion has not come about by luck or good fortune. It has been the result of significant reforms intro- duced to position Australia for the future. Those reforms underpinned a two decade economic expansion. While the right policy settings have the potential to extend this for another decade, this outcome will not be achieved without major reforms aimed at improving the nation’s interna- tional competitiveness. In formulating its views for Australia Adjusting: Optimising national pros- perity CEDA has drawn on its past research and sought the views of a number of Australia’s foremost economists and public policy analysts. These included CEDA’s Council on Economic Policy (CCEP) contribu- tions from Dr John Edwards on Australia 2022, Professor Gary Banks AO on the microeconomic reform agenda, and Professor Greg Smith and Professor John Freebairn on tax reform. Research findings associ- ated with CEDA’s reports on Australia’s population, its water resources and its energy options highlighted how the outcomes experienced by the nation in each area are a consequence of policy decisions and not economic inevitability. Australia Adjusting: Optimising national prosperity, puts forward a com- prehensive economic reform agenda for an open and adaptive nation to enhance its economic flexibility, improve its capacity to innovate and maximise the potential of its human capital. The recommendations form the basis of a National Productivity Policy (NPP) to drive a sustained improvement to Australia’s productivity so that the nation can realise ongoing economic growth. AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY AUSTRALIA ADJUSTING: OPTIMISING NATIONAL PROSPERITY 6 7 SECTION 4.0 INTRODUCTION Acknowledgements In developing the NPP, CEDA wishes to acknowledge the input and expert advice from an advisory group comprising: • Professor Michael Barber, Vice Chancellor, Flinders University; • Dr John Edwards, Board Member, CEDA and Reserve Bank of Australia; • Professor Stephen King, Professor of Economics, Monash University. • Professor Glenn Withers AO, Board Member, CEDA and Professor of Economics, Australian National University; • Professor Elizabeth Webster, Professorial Research Fellow, Melbourne Institute of Applied Economic and Social Research, the University of Melbourne; and These distinguished experts provided guidance in the creation of the report and input into the final recommendations. However, the final report is entirely the responsibility of the individual authors and the CEDA editors, Senior Research Fellow Vince FitzGerald and Chief Economist Nathan Taylor. Reform agenda for an open economy To remain competitive and economically strong, Australia will need to adjust to economic changes taking place now – and in the future – to ensure