Optimally, the pipeline of projects would then be initiated via a public corporation charged with lining up planning approvals, and funding and then tendering out the long-term equity that participants could then in turn contract out construction activities.
Fourth, in terms of work and industrial relations, more enterprises must learn to compete on the basis of truly valuing the hard work and skills of all those who make a contribution to their success. Some do this already. They understand that building stronger business performance requires fairer remuneration for all employees – particularly for those on low pay who have not always shared in the growth of recent decades. This must mean being willing to engage constructively with the organisations that represent workers. Being heard and respected – and paid appropriately – is the only way to fully engage employees in the high-skill, high-productivity workplaces that Australia needs to prosper into the future.
Fifth, in terms of product markets, most of us know how to search out value for money when buying most smaller consumable goods. But experienced professionals may find it difficult to exercise product choice in public utility services like gas, electricity and phone contracts, health and life insurance, superannuation, tertiary training and certain specialised medical care. Many providers offer a bewildering array of complex, confusing and ever-changing products, pricing schemes and/or plans, designed to confuse customers and to prevent easy comparison with competitor options. Here simple default products can be used to drive value for consumers while drying up rents for producers.
For professional services (the law, health etc.) the Harper Review recommendations on flexibility and competition to enable household budgets to stretch further. Part of this requires hard reforms in closed shops such as the pharmacy sectors and medical professions, which would open the delivery of health services to greater innovation, efficiency and reduce the opaque nature of fee setting. Subjecting the grocery retail industry to competition reforms such as strengthening of the Trade Practices Act via an “effects test” may be helpful here.
Sixth, in financial services, there must now be a separation between providing financial advice and manufacture or sale of such products by vertically integrated financial conglomerates. Regarding superannuation, member account consolidation is in train and this will help spur fund consolidation.
Perhaps the best way forward for the superannuation sector, for example, is to go back to the future – in the 1980s the industry consisted of a few very large funds with a number of small and medium sized funds which tilted off these. Such a structure today would encourage innovation (for example, small funds can specialise in niche investments) and therefore more effectively compete for membership dollars. Certainly, a consolidated superannuation sector would be in a better position to design innovative retirement products which pool risks and so deliver value for retirees.
Looking forward, the way to raise trend growth rates is to more systematically embed economic decision-making in long-term productivity-enhancing reform agenda that all Australians can believe in.
Stephen Anthony is chief economist at Industry Super Australia
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