Australia is experiencing its longest period of sustained low growth since the early 1990s. High inflation and tight monetary policy have dragged on the economy, affecting household consumption, industry output, and exports.
Business profitability has been impacted by rising input and wage costs, with investment growth stalling.
Companies are struggling with a chronic skills shortage in a difficult industrial relations setting, needless regulation and challenges from digitalisation, decarbonisation and an uncertain geopolitical environment.
Australia must urgently address its stagnant productivity to help support better living standards and higher wages now and into the future. Industry is already doing the heavy lifting – improving efficiency, upgrading skills of their existing workforce and investing more in technology. Governments must support these efforts.
There is a real risk that the current economic and investment conditions will become entrenched, and we lose the opportunity to foster the dynamism and growth needed to address our future priorities – particularly reaching net zero and building more and affordable housing.
Recent volatility in global financial and currency markets, as well as uncertainty regarding new policies emanating from the US, mean there remains significant risk to the economic outlook.
Our next government must address these fundamental challenges and recognise that industry policy is critical to help accelerate real income growth and improve productivity.
A comprehensive reassessment of workplace relations laws: The regulation of workplace relations has long been a contested and politically charged issue in Australia. It is an area in which the prospect of achieving sensible changes, in the interests of all parties, has frequently been collateral damage in highly adversarial public battles over potential reforms.
Reinvigorate the enterprise bargaining system: Employers and employees need to again be empowered and encouraged to set working conditions at the workplace level, subject to clear and effective safeguards and minimum entitlements. The shift away from a highly centralised system of workplace relations regulation in the decades preceding the implementation of the Fair Work Act 2009, particularly through the implementation of enterprise bargaining, delivered significant productivity benefits coupled with improved conditions for workers prior to the implementation of the Fair Work Act 2009. However, the system of bargaining withered in the period following the passage of that legislation.
Address the unworkable complexity of ‘modern’ awards and the system more broadly: We must significantly simplify our increasingly unwieldy, unnecessarily complex workplace relation system. Reform is particularly urgently needed to address what is increasingly, and justifiably, viewed by industry as an archaic, notoriously complex and confusing system of overly prescriptive ‘modern’ awards.
Reassess the definition of who can be a casual employee; the distinction between employment and independent contracting and barriers to offering fixed term contracting arrangements. The recent changes to the definition of who is a casual employee and who is an employee, as opposed to an independent contractor, need to be repealed. These changes upended approaches settled by Australian courts in a manner that has led to confusion and uncertainty for industry; narrowed the capacity of employers to offer employment opportunities and called into question the viability of many independent contracting arrangements. Industry is still grappling with the challenge of implementing these recent amendments. The changes will undoubtedly result in significant disputation and litigation in the years ahead if not amended. Restrictions on fixed term contracting provisions should also be reconsidered.
Reconsider changes empowering the Fair Work Commission to regulate independent contracting and other commercial arrangements. There is a need to reassess amendments that granted the Fair Work Commission powers to regulate commercial contracting arrangements. This includes not only commercial contracting arrangements in the Road Transport Industry and ‘Gig Economy’ but also complex commercial arrangements across the diverse supply chains.
Tackle the ongoing crises in the building and construction industry. While the appointment of an administrator to tackle some areas of entrenched dysfunction in the CFMEU as well as a forum for discussion have been welcome initiatives, they should only ever have been viewed as ‘first steps’ as part of a broader response.
Read the full Workplace Relations policy paper
Ease cost of doing business pressures: High inflation and rising wage costs over the last three years have posed significant cost-of-doing business pressures on business. This has weakened business margins and lowered the investment outlook. Controlling surging business costs is critical to returning to conditions of private sector growth.
Improve fiscal sustainability: Both federal and state spending has surged to its highest level since the mid-1980s. This fiscal path is not sustainable in the medium term given mounting structural deficits. Governments must bring the future spending path under better control through efficiency strategies and more disciplined spending targets.
Strengthen the private sector for labour market resilience: Australia’s labour market is a bright spot in our economic performance, but its resilience has become overly dependent on rising government spending. It is imperative that health is restored to the private sector employment growth to avoid a weakening labour market.
Address low productivity clusters: Australia has not booked any aggregate productivity increases in five years, in large part due to the poor performance of highly-regulated industries. A regulatory reform package to immediately enhance productivity in low-performing industries is needed to get the national productivity path back on track.
Genuine tax reform: Our tax system is excessively complicated, internationally uncompetitive, and riven by federalism issues. But genuine tax reform can unlock investment, drive job creation and boost productivity. Moving towards a competitive, simple and productive-enhancing tax system is essential to achieve our economic goals.
Read the full Economic Outlook and Reform policy paper
Transitional support for industrial transformation: Address recession-like conditions with strategic principles for industry programs, focusing on innovation, an ecosystem approach and simplicity in administration.
Boosting international connectedness: Reform ageing border systems to improve trade-facilitation processes and invest in creating robust supply chains.
Innovation, Science and Technology Strategy: Form a Ministerial Council to coordinate efforts and provide long-term policy certainty, establish a national IP Bank to streamline commercialisation of public sector research and create Technology De-risking Centres for SMEs to explore and test innovations in controlled environments. Ensure transparency in Research and Development Tax Incentive decision-making and align payments with Business Activity Statements.
Uplift digital capability: Support cybersecurity legislative amendments and deepen engagement with industry. Invest in AI capability and implement moderate guardrails.
Read the full Industry and Technology policy paper
Create a coherent and connected tertiary system: The system should be supported through flexible system architecture, reflect equitable funding between VET and higher education and place student and industry needs at the centre of delivery.
Better policy integration: Design economic and workforce development solutions that drive productivity and better connect workforce demand and supply.
Lifelong learning: Support labour market entry and retraining to support upskilling and reskilling of existing workers.
Apprentices: Provide policy settings that optimise commencements and completions.
Work-integrated learning: Expand quality work-integrated learning and support industry partnerships.
Foundation skills: Raise foundational language, literacy, numeracy and digital skills.
STEM: Set a baseline national standard, increase pipeline into STEM occupations including VET, higher education teachers and incentivise mid-career reskilling.
Leadership and management: Support the design, development and delivery of leadership programs industry needs.
Sustainable diversity, equity and inclusion: Embed systemic strategies and programs that enhance diversity, equity and inclusion.
Read the full Skills, Education and Training policy paper
Investable policy: Evolve current plans in climate and energy, don’t upend them.
Electricity: Deploy electricity infrastructure urgently, guided by the Integrated System Plan. Smarter use of energy is crucial to reducing power bills as more services electrify.
Gas: Meeting gas users’ needs will require an “all of the above” strategy, including short-term LNG imports, electrification and renewable gases as appropriate, expanding production and pipelines when needed, ensuring interventions like the Gas Code or reservation policies are effective and invoke ADGSM controls only if necessary.
Industry transition: Getting to net zero requires pro-competitive and pro-investment policies for existing and emerging industries.
Read the full Climate and Energy policy paper
Defence industry funding levels: Ensure secure and sustainable funding for defence industry that is aligned with the National Defence Strategy (NDS) and integrated Investment Program (IIP).
Critical workforce issues: A national workforce development strategy aligned to the ADF, Defence and defence industry.
Defence industrial base: A comprehensive approach to build the industrial base to support the NDS, the capabilities outlined in the IIP and surge capacity required in times of conflict.
Procurement reform: Continue procurement reforms to deliver simplified and more efficient outcomes for both Defence and the defence industry.
Ambiguities in the implementation of legislation: Clearer legislation, enhanced oversight and a cost benefit analysis to address the regulatory burden and prevent increased costs and delays.
Read the full Defence Industry policy paper
Innes Willox - Chief Executive
The Australian Industry Group
Level 5
441 St Kilda Road
Melbourne
VIC 3004
Ai Group and partner organisations represent the interests of more than 60,000 businesses employing more than 1 million staff. Our membership includes businesses of all sizes, from large international companies operating in Australia and iconic Australian brands to family-run SMEs. Our members operate across a wide cross-section of the Australian economy and are linked to the broader economy through national and international supply chains.
Our purpose is to create a better Australia by empowering industry success. We offer our membership strong advocacy and an effective voice at all levels of government underpinned by our respected position of policy leadership and political non-partisanship.
With more than 250 staff and networks of relationships that extend beyond borders (domestic and international), we have the resources and expertise to meet the changing needs of our membership. We provide the practical information, advice and assistance you need to run your business. Our deep experience of industrial relations and workplace law positions Ai Group as Australia’s leading industrial advocate.
We listen and we support our members by remaining at the cutting edge of policy debate and legislative change. We provide solution-driven advice to address business opportunities and risks.
