Budget must drive productivity: AiGroup


The upcoming Federal Budget must give priority to building productivity and capacity in the economy, says the Australian Industry Group in its pre Budget submission.

"Australia’s is an economy of paradoxes, says AiGroup Chief Executive Heather Ridout.

"The slump in productivity growth over recent years has exacerbated the damage to Australia’s national competiveness stemming from the marked rise in the value of the Australian dollar, says Ms Ridout.

"The way around these paradoxes is to lift our productivity and capacity. 

"In an economy that is testing the limits of its capacity, there is little spare to build new capacity and invest in developing skills, capabilities and productivity without taking away from resources in use elsewhere or adding to inflationary and interest rate pressures.  “We need capacity to build capacity. This calls for a Budget that delivers a major reprioritisation of effort in favour of measures that build productivity and capacity by building skills, innovation and business capabilities. 

“It calls for a Budget that adds to immediate capacity by raising net migration. And it calls for a Budget that ensures we maintain a balanced and diversified economy that is not overly reliant on a small number of commodity exports to a handful of countries.”

In its submission the AiGroup said the Budget to be unveiled next week should invest in lifting the skills of our existing and future workforce by: 

  • Establishing a Workforce Development Agency, led and driven by the needs of industry, that would consolidate and coordinate the policy development and program implementation into one high profile entity. The Agency would develop a national workforce development strategy, administer enterprise-stream funding, oversee apprenticeship reform and focus strongly upon lifting the language, literacy and numeracy skills of the workforce
  • Overhauling the governance and effectiveness of the workforce training sector to lift quality and build coherence and
  • Raising funding to make up for the $660 million annual shortfall in current levels of funding for the Vocational Education and Training sector.
  • Encourage business investment in the innovation that will drive a more balanced economy that will build our capabilities beyond mining in areas such as high value-added manufacturing. 

To contribute to this, Ai Group proposes:

  • Addressing the serious flaws in the current proposal to change the research and development tax incentive with effect from July 1, 2010
  • Extending and strengthening the place of innovation capabilities within Enterprise Connect and
  • Supporting the creation of an Australia-led regional innovation network linking businesses and researchers in the Asia Pacific region
  • Assist in growing the capabilities of our businesses including in the critical areas of exporting and energy efficiency, including by restoring appropriate levels of funding to the Export Market Development Grant (EMDG) Scheme, and helping share best practices in industrial energy efficiency
  • Restore net migration to pre-GFC levels
  • Foster the capabilities needed to fully realise the potential of a nationwide broadband network and
  • Prepare the ground for future investment in infrastructure by:
    - Further improving the transparency and sophistication of processes of assessment, prioritisation and selection of major projects that has begun under Infrastructure Australia
    - Undertaking preparatory research on elements of congestion charging and related urban transport measures and
    - Facilitating the development of alternative financing models to ensure the full participation of both the public and private sector involvement in the creation of productivity-enhancing, intergenerational infrastructure.

Treasurer Wayne Swan will deliver the Budget next Tuesday.

Related news & editorials

  1. 18.07.2018
    by      In
    3D printing with metals is affecting the way manufacturing occurs, and Australian distributor Raymax Applications reckons this is amply demonstrated by the application of SLM Solutions machines in metal manufacturing processes.
    SLM Solutions Group recently released its fourth generation 280 system... Read More
  2. 16.03.2018
    by      In
    In the 1960s, as much as a quarter of Australia’s workforce was employed in the manufacturing sector, and the industry fuelled 25% of the nation’s economy, according to the Productivity Commission. Half a century on, the closure of Toyota, Ford and then General Motors in October 2017 seemed to... Read More
  3. 24.01.2018
    by      In
    According to Southern Cross CEO, Mark Ferguson, if Australian industry really wants to get serious about saving energy then it needs to take a close look at ‘two-stage’, air compressor technology. As energy costs continue to outstrip other business input expenses it is critical, more than ever... Read More
  4. Martin Chappell
    by      In
    With Australia’s manufacturing industry strengthening, leaders and heads of IT are weighing up which new technologies they should implement to gain a competitive edge. Martin Chappell from Motorola Solutions explains how a simpler and more focused use of data can be the best approach.
    Australia’s... Read More