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Early childhood is the pillar on which sustained wage growth rests: Business Council
Freya Lucas
Aug 22, 2023
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The Business Council of Australia (BCA) has released a comprehensive national plan to reverse the nation’s productivity slump and drive competitiveness with a package of reforms to leave each Australian $7,000 better off a year after a decade.
Central to the 10 policy levers recommended for action and the big ideas for reform is a national early childhood system that develops the competencies for the future.“If we want sustained wages growth and to maintain full employment, the nation needs a reinvigorated economic growth agenda driven by large-scale investment, higher productivity and greater innovation,’’ said BCA President Tim Reed.
“Our report, Seize the moment, outlines how to deliver that agenda – putting forward the big ideas to dramatically alter Australia’s economic trajectory to deliver higher living standards.’’
10 policy levers
The BCA’s 10 policy levers for action and the big ideas for reform are:
- A frontier economy – the cutting edge of existing and new industries
- Effective overseas trade and global integration
- A tax system for the future
- An agenda for microeconomic reform
- Energy and the road to net zero
- Nurturing our people and skills
- Advancing the economic interests of women
- Social inclusion
- Efficient workplaces
- Effective government and better services.
Alongside the 10 policy levers, BCA has identified that there are six shifts which are needed to drive productivity growth.
Australia is vulnerable
Australia is vulnerable to several global forces of change including digitisation and technological change, global volatility and decarbonisation, said BCA Chief Executive Jennifer Westacott.
“We need a coordinated, national plan to strengthen our economic resilience and ensure we turn these challenges into the opportunities that will deliver greater prosperity, higher wages and improved living standards,’’ she explained.
“We cannot continue to experience record low levels of business investment as a share of GDP where more money leaves the country than comes in. Investment drives innovation which drives productivity and drives higher wages.”
“We cannot continue to have an underperforming skills system that is failing to prepare Australians for the huge changes in the tasks that make up their jobs as the world of work changes.
Improving productivity
According to Mr Reed, the Seize the moment report “spells out how to move the dial on Australia’s lacklustre productivity rates”.
Improving these rates, he said, is important because productivity gains underpin higher wages and improve living standards by unleashing investment which drives innovation and the expansion of industries.
“The concept of productivity can sometimes feel very academic but in practise it is simple – we need to work in new and smarter ways, so that each unit of input, each hour worked, produces more outputs.”
“This pathway needs to see the Commonwealth, states and territories in lockstep on the policy architecture to achieve the nation’s 2030 target, outline the 2035 target, and reach net zero emissions by 2050.’’
Education is foundational: Westacott
Ms Westacott said the BCA’s report also outlined ways to transform the nation’s poor performing and fragmented education system with a coordinated approach focused on the importance of lifelong learning.
“Our reforms are built on three foundations: a national early childhood system that develops the competencies for the future; a rethink of the skills that students leave secondary school with including a renewed focus on work ready skills; and an integrated and interoperable tertiary system.
“We need a revamped tertiary system that makes it easier for people throughout their lives to move between vocational and higher education and incorporate work-integrated learning,’’ Ms Westacott said.
“But having a great skills system is only one part of the solution to unlocking the great untapped economic strength of our people.”
More needs to be done for women
“We need unprecedented action to further the advancement of women in the workforce and ensure all Australians, including those who are traditionally excluded from work, can realise their full potential,” she added.
“On workplace relations, we have put forward a system that would deliver a more productive and competitive economy by driving collaboration and innovation.”
The BCA is essentially presenting a carefully calibrated package of reforms that could be achieved incrementally, Ms Westacott continued.
“Pieced together they would overhaul Australia’s competitiveness and productivity, increase our participation in big global markets, and fundamentally drive stronger economic growth.”
“If the Australian economy was to grow at its long-run average of 3.3 per cent a year rather than the status quo, after a decade each Australian would be $7,000 a year better off – and this sum would grow each year.”
“The economy would be $200 billion bigger and an extra $50 billion of revenue would be raised – nearly the same amount as the entire annual defence budget, almost the cost of providing the aged pension each year, or the price tag of the planned nuclear submarine program purchase,’’ she said.
“We appreciate that governments across the country have started and in some cases are well progressed on many of these ideas.”
“What we need now is coordination, alignment and urgency across the Federation and across business.’’
For an overview of the report, see here. The full report is available here.
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