Tuesday, 11 October 2011
AUSTRALIA has continued its slide in the world rankings on competitiveness, pulled down by too little innovation, too much red tape and a restrictive labour market. The latest World Economic Forum annual report on global competitiveness puts Australia at 20th place on a list of 142 nations, down from 16th place last year and 15th the year before. ‘‘With an unchanged score, Australia drops four spots to 20th place as other countries move ahead,’’ the report says. Switzerland was the top performer for the year, with the US slipping to fifth spot behind Singapore, Sweden and Finland. The forum warned that Australia still lagged top performers on business innovation and sophistication, ‘‘two critical drivers of competitiveness for advanced economies’’. And its survey results showed restrictive labour regulation and inefficient government bureaucracy had risen up the list of concerns to become the two biggest problems facing business. Australia rated 116th globally for flexibility of wage determination, 97th for hiring and firing practices and 75th based on the burden of government regulation. Tax rates and inadequate infrastructure also remained major issues, with the report noting that seaports, in particular, had become increasingly strained by Australia’s rapidly growing commodity trade. The nation’s macroeconomic environment was deemed ‘‘satisfactory’’, especially considering the state of other advanced economies, but government deficits nonetheless had Australia’s budget balance ranking falling from 67th to 86th over the past 12 months. However, the nation did improve its performance in education, where it ranks 11th globally, and returned strong results on health. Australia also won praise for its efficient financial system, supported by a banking sector that ‘‘counts among the most stable and sound in the world’’. Australia’s public and private institutions performed well on transparency and efficiency, with overseas investors apparently taking note. Australia now ranks 10th in the world for prevalence of foreign ownership, up from 19th last year.
