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Australia Ranks 20th in World Competitiveness

September 11, 2012 • News, World News

Workplace Relations and Bureaucracy have lead to business concerns which affected Australia’s ranking in the Global Competitiveness Report, produced by the World Economic Forum (WEF).

With an unchanged score from last year, Australia dropped four spots to 20th place as other countries move ahead.

“The ranking is unchanged from last year. Among the issues revealed by the survey data were heightened business concerns about deteriorating workplace relations and inefficient government bureaucracies,”  said Chief Executive, of Australian Industry Group, Innes Willox.

Switzerland had retained its 1st place position again, as a result of its continuing strong performance across the board. With the country’s most notable strengths relating to innovation, technological readiness, and labor market efficiency.

Picture:The Global Competitiveness Report 2011-2012

The report revealed, Switzerland’s governance structures ensure a level playing field, enhancing business confidence; these include an independent judiciary, a strong rule of law, and a highly accountable public sector, (report).

Maintaining the lead among Asian economies was Singapore, which moved up one place to 2nd position. The country’s institutions continue to be assessed as the best in the world, ranked 1st for their lack of corruption and government efficiency.

“Australia’s labour market efficiency was ranked 42nd out of the 144 countries surveyed, down from 13th in 2011-12. In fact, when asked to select the top five problematic areas, one in five Australian companies (20.3%) saw restrictive labour regulations as the top difficulty in doing business here. This is up from 16.6% last year and 13.1% in 2010-11. This outcome should resonate with the Government and the Opposition as they consider their response to the Fair Work Act review.

“It is concerning that a number of competitiveness indicators have fallen in recent years and are now well below OECD averages,” said Innes Willox.

Australian Industry Group, a Partner Institute of the World Economic Forum’s Global Competitiveness Network, revealed the areas where Australia slipped:

  • 123rd for the flexibility of our wage determination system, down from 110th in 2010-11;
  • 103rd for the effectiveness of our taxation system, down from 66th in 2010-11;
  • 96th for the burden of government regulation, down from 60th in 2010-11;
  • 58th for government procurement of advanced technology products, down from 37th in 2010-11; and
  • 56th for the effectiveness of government services for improving business performance.

“These results highlight the pressing need to improve key areas including: industrial relations, taxation, business regulation, and in building business capabilities to lift the competitiveness of Australian businesses.

“There are, however, some important bright lights in the survey and Australia continues to be a world leader in a number of key areas,” Mr Willox said.

For example, Australia ranks:

  • 1st for secondary education enrolment rates;
  • 5th for the soundness of our banks;
  • 6th for the intensity of local competition; and
  • 7th for the quality of our scientific research institutions. (Australian Industry Group)

The full Global Competitiveness Report 2012-2013 can be found at www.aigroup.com.au/policy/reports and will be available from 4pm on September 5.

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