Federal election date set, Australian industry responds

Posted by AFN Staff Writers on 31st January 2013

Australian Industry Group (Ai Group), the leading representative body for Australian industry, has responded to Prime Minister Julia Gillard’s announcement of an eight-month election campaign.

Prime Minister Gillard yesterday announced that the Australian federal election would be held on September 14 2013, thereby starting the longest federal election campaign on record.

Ai Group Chief Executive Innes Willox said that businesses will now be looking to both parties for a clear vision of their policies ahead of the election.

“On behalf of our members and the broader business community, Ai Group will work to ensure that the policies of all parties acknowledge the need to lift productivity, our competitiveness and to build a resilient and diversified economy,” Mr Willox said.

Although the Prime Minister said her calling of an election would provide “long term certainty”, others are not so sure. “In the short term, Australia now faces an eight-month election campaign which will mean that some significant investment decisions by business may be put on hold,” Ai Groups Mr Willox said.

Mr Willox said that Ai Group is hoping for election policies to address the following key issues:

  • The high Australian dollar looks set to continue: “Our dollar remains high even though interest rates have fallen and commodity prices are well off their peak.”
  • A ‘growth hole’ is looming for the Australian economy: “The mining investment pipeline is expected to ease earlier and from a lower peak than previously expected while the fiscal policies of the federal and state governments are detracting from, rather than contributing to growth. These sources are yet to be replaced by a meaningful pick-up in activity or earnings from other key sectors such as commercial and residential construction, manufacturing, or education exports. Consumers are not likely to step into the breach in the absence of any plans for tax cuts or boosts in income support. A ‘gap’ in the drivers of growth now looks likely.”
  • The importance of productivity growth across the economy: “Australian productivity growth is problematic, as recognised by key policy-makers in Reserve Bank of Australia, Treasury and elsewhere. Australia has fallen in international cost and competitiveness rankings in every survey that matters. No single solution will fix it. There needs to be action on several fronts, including the development of a more flexible industrial relations system; improvements in education, skills development and management abilities; and a greater focus on innovation, tax reform and infrastructure development.”
  • National regulatory harmonisation and reduction in red/green tape: “Progess in reducing and harmonising business regulation in COAG has stalled. It must pick up pace as a national productivity imperative.”
  • Energy costs and availability: “2012 saw many businesses get serious about their electricity input costs as the carbon tax pushed electricity pricing to new highs. Future gas pricing and availability is likely to be a leading concern.”
  • Climate change and environmental policy: “The carbon tax debate has moved into a new phase but will re-surface as a key political issue as business grapples which its implementation and impact.”