28 May 2015
Australian competitiveness slipping
Australia is clinging to a spot in the top 20 in global competitiveness rankings as economic performance and government efficiency drags the nation down compared to its rivals.
The Committee of Economic Development of Australia (CEDA) released the local results today, noting a concerning downward trend over the past five years.
“The overall result is drawn from rankings for four key areas — economic performance, government efficiency, business efficiency and infrastructure and Australia has slipped significantly in all these areas over the last five years,” CEDA chief executive Stephen Martin said.
“Our fall in economic performance is particularly concerning, with a drop of four places from last year to 28, which is a drop of 15 places in the last five years.
“Worsening domestic economic conditions, rising unemployment and lower international investment have been the biggest contributors to the drop in the overall economic performance ranking this year.”
Overall, the nation finished in 18th spot out of the 61 nations involved in the broad survey, with the lack of R & D investment also labelled as a threat to the nation’s prosperity in the long-term.
Australia fell behind New Zealand for the first time in 18 years, with the nation’s trans-Tasman rivals jumping from 20 to 17 in the rankings.
“Our ability to innovate and be a ‘smart’ economy with a highly skilled and innovative workforce has been a comparative advantage for Australia and is becoming even more important as our economy shifts away from mining and resources and looks to services to pick up the slack,” Professor Martin said.
“However, these significant slips in the rankings suggest we may not be keeping pace with global competitors at the very time it is becoming increasingly important for our economy.”
The biggest contributor to Australia’s overall drop, however, was its public finance ranking, which slipped from 13 to 28 as government debt swelled.
“Also concerning is that political stability and predictability has now fallen out of the top five key attractiveness indicators for Australia,” Professor Martin added.
The US retained the number one spot ahead of Hong Kong, Singapore and Switzerland.
The rankings are part of Swiss-based IMD’s 2015 World Competitiveness Yearbook, which ranks 61 countries based on more than 300 business competitiveness criteria.
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