Australia’s national prosperity - the challenges, the response, and the opportunities were outlined by the Federal Treasurer, the Hon Joe Hockey at CEDA’s 2015 State of the Nation conference.
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Mr Hockey said the main challenge is, “an ageing population with fewer people working to support more than ever in retirement.”
Mr Hockey summarised the government’s three key responses to the challenge:
- Improving workforce participation – the Skills Fund and 250,000 more training places; the Youth Employment Strategy; and the childcare reforms.
- Increasing infrastructure investment.
- Improving innovation and competitiveness – reformulating the Employee Share Scheme to help start-ups, and removing obstacles to crowd sourced funding.
Mr Hockey was especially enthusiastic about the opportunities ahead for Australian businesses with export potential. In just 15 years, Asia’s emerging middle class will total 2.5 to 3 times more than in both North America and Europe combined.
“Australia can provide most of what these people want and need,” said Mr Hockey.
Services of interest to Asia’s growing consumer classes include education; tourism; agriculture and food; clean air; architecture; accounting; and financial services. To illustrate the scale of emerging opportunities, Mr Hockey said, “Services currently comprise 17 per cent of Australia’s exports, but 70 per cent of our economy.
“That’s why the government is focusing on Free Trade Agreements, which create landmark opportunities for services in Australia,” he said.
Mr Hockey cited the example of China’s ageing population that represents significant export opportunities for health, aged care, and financial services.
While India’s young demographic translates into export opportunities in skills development and education.
Mr Hockey was asked about the impacts to business of changing infrastructure. He cited examples of ‘disruptive’ technologies dramatically altering the business landscape, such as Facebook, Uber, Airbnb and Alibaba.
Each has revolutionised its business sector. Airbnb, for example, has turned the hotel business upside down without ever owning a hotel room, he said.
Mr Hockey added that it was important to future-proof new public infrastructure, given the scale and potential impact of emerging new technologies.
Austrade Chief Executive, Bruce Gosper discussed today’s “ultra-competitive world” as evidenced by intense activity in the tourism and education sectors. He noted that Australia has recently followed the US, Canadian, UK and Singapore examples to offer Chinese travellers 10-year visas.
Mr Gosper cited four factors affecting the ability of Australian firms to compete and succeed:
- Free Trade Agreements (FTAs)
- Global and regional value chains
- Foreign direct investment, and
- Market intelligence and insight.
Mr Gosper noted that Australian goods no longer compete on price; they establish their market share and reputation on quality. But the smartest are also driving new opportunities via e-Commerce.
Given that international business is still constrained by information barriers and perceptions, Austrade aims to improve Australian exports by providing information and market intelligence.
BlueScope Steel and GrainCorp Non-Executive Director, Rebecca Dee-Bradbury stressed the importance of speed and alignment as the currency of growth sectors and growth economies.
She suggested that Australia could capitalise on agrifood opportunities by being smart – focusing on the higher end of the market and learning more than our competitors do about our consumers’ needs.
Ms Dee-Bradbury identified issues including infrastructure shortfalls; supply chain inefficiencies; regulatory duplication and impediments; ignorance of the benefits of FTAs; and flagging innovation.
IBM Australia and New Zealand Research Vice President, Joanna Batstone shared how IBM evaluated Australia’s competitive advantages when deciding to invest here – our:
- Abundance of natural resources
- Advanced infrastructure
- Stable economy
- Low sovereign risk
- Well-educated workforce and world class universities.
Ms Batstone said Australia can improve its competitiveness by focusing on more specialised, high-value services, and by improving innovation.