Australia sixth in 2006 World Competitiveness Yearbook ranking

This is an archived CEDA media release. It reflects the state of events at the time it was issued; it may not reflect current facts or CEDA's current view.

Embargoed until
12.01am, Thursday 11 May, 2006

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The latest edition of the world's leading competitiveness survey has underlined the challenge to improve Australia's trade performance.

The World Competitiveness Yearbook 2006, released in Australia by CEDA tomorrow, says Australia's trade performance continues to place near the bottom of the global ladder. Of 61 national and regional economies, Australia ranked 50th or worse on three key trade indicators.

Overall, Australia ranks as the sixth most competitive of the 61 major economies in the Yearbook.

"This year's numbers suggest Australia has most of its economic management right," says CEDA chief executive officer Catherine Baldwin.

"But the numbers also show that Australia remains relatively uninvolved in global trade. Even in the middle of a commodities boom, we rank 57th out of 61 as an international trader."

"These numbers suggest we are simply not buying and selling enough with the rest of the world."

"The Yearbook results confirm that despite Australia's strong recent performance, several areas of our economy need more attention from policymakers."

CEDA has begun a research project, Competing from Australia, exploring what Australian firms need to do to compete on the international stage in the next decade and beyond.

Economic management: mostly on track

Australia's government bodies attracted some of the nation's highest individual scores in the Yearbook. The Australian businesses surveyed for the Yearbook gave high ratings to governments for their consistent policy direction. And Australia's political parties ranked fourth in the world in their understanding of economic challenges.

Australia was among 18 nations and regions where the Yearbook described government efficiency as making a "positive contribution" to the economy.

The rise in Australia's ranking reflects improvements in a number of Australia's rankings, including government surpluses. But at the same time, the Yearbook says, Australia's ranking is being held back by personal tax rates. We rank 35th for our effective personal income tax rate on taxpayers earning the equivalent of Australia's per-capita GDP ($35,000). This week's Budget is unlikely to have a substantial effect on that ranking.

Other issues

Among other issues raised by the Yearbook :

• Australians pay surprisingly high prices for finance. The nation ranks 52nd for interest rate spread - the difference between lending and deposit rates.
• The skills shortage is hitting business, with the nation ranked 39th for the ability to hire qualified engineers.
• Broadband use is strongly up, which helped Australia's ranking. But communications costs remain high, with Australia ranked 32nd for mobile telephone costs and 35th for dial-up Internet costs.
• Manufacturing labour costs are high and rising, with Australia ranked 44th for total compensation costs.

More detailed information

The Yearbook is produced by Switzerland's IMD, one of the world's top business schools, with the help of CEDA and other international partners. Its rankings and detailed country-by-country data are used by businesses and governments around the world. In recent years, Australian governments have used strong Yearbook results to market Australia to foreign investors. Details of the Yearbook methodology are available from the IMD World Competitiveness Centre at:
www.imd.com/wcc

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For further information please contact:

John Harris
Corporate Relations Director
Phone 03 9652 8415

Email info@ceda.com.au