AS THE BUSINESS
community
encourages the Abbott Government
to implement its reform agenda, the
World Economic Forum’s (WEF) recent
Global Competitiveness Report 2014-15
further illustrates Australia’s declining
competitiveness.
The WEF’s scale ranks the competitive
performance of Australia’s economy 22nd
out of 144 nations surveyed, with data
pointing at its industrial relations system
as the core factor dragging it down.
According to the WEF, Australia
measures strongly on 11 of the 12
competitive ‘pillars’, with corporate
governance, tertiary education, market
competition, banking stability and scientific
research (innovation) all within the top 10.
The nation’s worst performing factors
remain flexibility in wage determination
(132nd), pay and productivity (125), hiring
and firing practises (136) and co-operation
in labour-employer relations (109).
Tellingly, the WEF survey shows over
one-in-four business leaders in Australia now
rank labour relations as the most problematic
factor to doing business in the country.
“Since reaching its best rank (of 15th)
in 2009, Australia has been dropping
continuously in the rankings. The
country’s performance is remarkably
consistent across the board… (but) the
main area of concern remains the labour
market,” the WEF report says.
“Indeed, as part of our executive opinion
survey, Australian businesses, year after year,
have named the restrictive labour regulations
the most problematic factor for doing
business in their country by a wide margin.”
For the past three years the WEF has
pointed to workplace relations as the key
priority reform area if Australia is to lift its
competitiveness of the global scale. While
critics have dismissed the organisation’s
IR STILL RANKED AUSTRALIA’S
biggest challenge
The heat has been turned up for workplace reform in Australia after two
leading global authorities on business competitiveness and growth singled out
labour market inefficiency as the number one challenge facing the nation.
findings as subjective, the WEF is not
alone in its concerns.
Just weeks after the WEF report was
released, the chief of the International
Monetary Fund (IMF) noted more efficient
labour market regulation was critical to
Australia’s growth prospects.
In Cairns for the G20 finance ministers
meeting – at which the world’s 20 largest
economics signed a commitment to
increase global growth by 1.8 per cent over
the next four years – IMF managing director
Christine Lagarde noted an increased focus
on labour market reform would be critical to
meeting such a growth target.
“We hope that there will be more
commitments in the areas of infrastructure
and labour… more focus in general
on job-market reforms, and on more
opportunities delivered by the job
markets, will actually help us with the
double objective of both growth and
jobs,” says Lagarde, who was France’s
trade minister from 2005-2007.
With a Productivity Commission-
led review into Australia’s workplace
system pending, such commentary
continues to reinforce the need for a
comprehensive re-think on how Australia’s
workplace system could better support
the economic, employment and social
aspirations of the broader community.
RP
Australian businesses, year
after year, have named the
restrictive labour regulations
the most problematic factor
for doing business in their
country by a wide margin.
SUMMER 2014-15 RESOURCE
PEOPLE
|
|
POLICY
38
