Australia cannot afford to 'drop the ball' in the key areas of infrastructure and trade according to the latest edition of the world’s leading competitiveness survey, CEDA's CEO David Byers said today.
"This week's announcement by the Federal Government that it would allocate $20 billion to a new 'Building Australia Fund' to finance spending on infrastructure is a step in the right direction," Mr Byers said.
"But CEDA will wait with interest to see the details of the infrastructure projects to be funded. The World Competitiveness Yearbook highlights in particular that Australia is lagging behind in relation to telecommunications and related internet usage costs. The devil will be in the detail," he said.
"The adequacy of infrastructure and its timely installation, financing and pricing remain essential questions for Australia's economic growth and international competitiveness.
"While Australia has tended to rely on a government planned, installed and financed model of infrastructure development, we need to resolve a number of complex issues to determine how we can best deliver an ambitious infrastructure agenda.
"Pricing, regulation, access, risk sharing, tendering processes, taxation and governance arise as key challenges to be resolved in order to most efficiently provide the infrastructure that Australia needs to compete globally.
"How well we can solve these issues will determine the extent to which private provision of infrastructure can grow as a viable model," he said.
Mr Byers was commenting on the release of the IMD World Competitiveness Yearbook. The Yearbook is compiled from surveys of CEDA member companies and other international partners and is based on 331 separate criteria.
While Australia’s overall ranking had improved to 7 this year from 12 in 2007 among the 55 countries surveyed, the improvement was marred by less than flattering scores for international trade (44th out of 55) and infrastructure (22nd out of 55).
These two areas were noted in CEDA's Growth research collection, Competing from Australia, published in July 2007.
In Competing from Australia, Dr John Edwards pointed out the decline in exports since 2000 – hidden by rising commodity prices - and the need for a concentrated effort to remove infrastructure bottlenecks.
"Australians often like to think of our country as a great trading nation but in reality, the opposite is true. We are a relatively low-trade nation when you examine international trade as a percentage of overall national economic activity," Mr Byers said.
"Clearly we need to continue to concentrate on maximizing Australia's ability to interact with world markets and emphasize economic openness and flexibility."
The Yearbook's results, which draw on a survey of CEDA members, also noted that Australia faced other challenges in the coming year including:
As highlighted in CEDA's Economic and Political Overview published in February this year, reform of business regulation to reduce duplication across Federal and State jurisdictions also remains a key challenge.
"This year's rankings see a marked improvement on the previous year," Mr Byers said.
"Of particular note was the resilience of the economy to economic cycles, continued political stability, solid education standards and general awareness among Australians that further social and economic reform was needed."
The Yearbook also comments that the No 1 ranking held by the US since 1993 may be about to end. The survey says that the structural deficits in the US ultimately need to be addressed and that a recession is a strong possibility.
It concludes that "2008 will be rough".
About the World Competitiveness Yearbook
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 sets are used by business and governments around the world.
For further information please contact:
John Harris
Corporate Relations Director
Phone 03 9652 8415
Email info@ceda.com.au
Printed from the CEDA Web site at http://ceda.com.au. Copyright 1999-2009 CEDA