Australia’s future economic challenges: perspectives from employers

ACTU Investment Forum

Peter Burn, Director of Public Policy, Ai Group 17 June 2011

Shares of Global GDP 1990 & 2010Citibank

Shares of Global GDP 2010 & 2050Citibank

Number aged 15-64 per person aged 65+Intergenerational Report 2010

Erosion of Australia’s Competitiveness Falling Export Competiveness

Cumulative change in Australian and OECD share of global exports of goods and services

1995 to 2010

-40.0%

-35.0%

-30.0%

-25.0%

-20.0%

-15.0%

-10.0%

-5.0%

0.0%

5.0%

1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010

perc

en

tag

e c

han

ge s

ince 1

994

Australia OECD

Shifting the Path of Industrial Development

Declining Labour Productivity

0.0%

0.1%

0.2%

0.3%

0.4%

0.5%

0.6%

0.7%

0.8%

0.9%

Qu

arte

rly

chan

ge

in m

arke

t se

cto

r la

bo

ur

pro

du

ctiv

ity

(5 y

ear

roll

ing

av

erag

e)

60.0

80.0

100.0

120.0

Mar

ket

sect

or

GD

P p

er h

ou

r w

ork

ed

(200

8-09

= 1

00)

Quarterly change in labour productivity (five year rolling average) (lhs)

GDP per hour worked in market sector (2008-9 = 100) (rhs)

Steep deterioration in manufacturing cost competitiveness

Growth in Australian manufacturing industry’s unit labour cost significantly exceeded the OECD’s average

-3 -2 -1 0 1 2 3 4

Italy

Australia

New Zealand

Norway

Canada

United Kingdom

France

Euro area

Netherlands

Germany

Korea

OECD

Sweden

Ireland

United States

Finland

Japan

Average annual growth (%) from 1999 to 2009

“Middle Class” by Region 2009, 2020 & 2030