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ABC News
2 hours ago
- ABC News
Focus narrows on reducing regulation to boost productivity ahead of round table
Australia's productivity chief will assert that growth has not been a priority in policy making for years, citing the nation's growing tangle of regulation as evidence, in a speech ahead of Labor's economic reform round table this week. The warning coincides with a separate call from Australia's peak business bodies for red tape to be slashed by a quarter by the end of the decade, as Treasurer Jim Chalmers declared the government does "not want to settle for less" when it comes to productivity. Danielle Wood, chair of the Productivity Commission, will address the National Press Club on Monday, where she will argue there has been "less policy emphasis on growth and a declining reform appetite" across many wealthy nations in recent decades. "This manifests not just in less economic reform but in decisions by governments — federal, state and local — to pay less attention to growth trade-offs in pursuing other policy goals," she will say. "Nowhere is this more evident than in the growth of regulatory burden." Pointing to a significant increase in the number of words and conditional terms in acts and legislative instruments over the first two decades of the century, she will argue this "regulatory creep" is a symptom of the increasing demand for governments "to 'do something' every time an issue emerges". "When combined with Australians' tendency to look to government for answers — our 'Canberra fix' — we have ended up with a system that dampens growth." Business leaders, economists, unions and shadow treasurer Ted O'Brien will descend on Parliament House on Tuesday for a three-day meeting Mr Chalmers has billed as an opportunity to grapple with the big challenges facing the economy. Prime Minister Anthony Albanese will address the attendees at the beginning of proceedings on Tuesday, and later on Wednesday, he will host the attendees at the Lodge. But expectations that the forum will lead to significant reform in the short term have been tempered by the prime minister, who earlier this month talked down the prospect of tax changes emerging from the talks. The commission has released five reports in the lead up to the round table, culminating in what Ms Wood called a "to-do list" of recommendations that could "shift the dial" on growth. Among them are many aimed at improving government regulation, including things like employing digital tools to streamline approval processes. A leaked Treasury document prepared for cabinet, first reported by the ABC this week, featured a list of possible outcomes from the round table, including a pause to changes for the National Construction Code, measures to speed up housing approvals, and a national artificial intelligence plan to cut environmental red tape. It led the opposition to label the talks a "stitch up", a claim the government has dismissed, arguing it's not unusual that the department would have provided advice on some of the already received ideas ahead of time. Mr Chalmers and Mr Albanese both once again vowed they would not pre-empt any outcomes on Sunday, with the leader telling reporters in Perth that "the agenda is whatever people want to raise". He said ideas put forward will feed into the government's decision-making, including some that can be done immediately if adopted, others that will be implemented through federal budget processes, and some that tackle "the long-term challenges in the global economy, the impact on Australia, and how we deal with those issues". Ahead of the round table, 29 groups representing small, medium and large Australian businesses have launched a concerted campaign to cull red tape, warning that it needs to be easier to do business in Australia to attract investment. The alliance will also use the forum to call for reform of the approval process for planning and major projects, boosts for investment and innovation, and a process for "productive" tax reform that doesn't raise costs for consumers or businesses. Council of Small Business Organisations Australia chair Matthew Addison said the round table was an "opportunity to reset the economy in a way that supports business, not stifles it". "Our small businesses are buckling under the weight of excessive red tape, with regulatory burden and a patchwork of complex compliance obligations slowing growth," he said. Business Council of Australia chief executive Bran Black echoed that changes were needed to make it easier for businesses to operate, "so a cafe owner in Melbourne doesn't face 36 licences before they can pour a cup of coffee". He also pointed specifically to the need to cut red tape to make it faster to approve and build new homes, something the government has identified needs to happen to solve the housing crisis. Ms Wood will reference Productivity Commission research that found the time it takes to build houses and apartments has ballooned by 50 per cent over the past three decades. "It's not the time laying bricks that's blown out. It's the approvals processes: from planning, to heritage, to building approvals, environmental and traffic impact statements," she will say. "And these regulatory hairballs have found their way into almost every corner of our economy." According to Ms Wood, prioritising growth means there will be uncomfortable trade-offs, for example, heritage and density restrictions coming at the expense of more and cheaper housing, but that a "growth mindset means elevating growth and its benefits across all policy decisions". "It does not mean government should never intervene or pursue other conflicting goals, but the benefits of growth should not be traded away quietly or lightly," she will say. In an interview ahead of the round table, Mr Chalmers told the ABC that there was a lot of appetite in cabinet for cutting red tape and improving regulation where possible, and it would be a "really, really big focus" of the talks. "There are a number of reasons for our productivity challenge and we're going to chip away at trying to address it over time," he said. "We don't want to waste the next decade on productivity, the way our predecessors wasted the last, and that's what drives us." Andrew Bragg, the Coalition's shadow minister for productivity and deregulation, will also lay out the opposition's plan to increase productivity on Monday, arguing Australia has become "inefficient, bureaucratic and unproductive". "Many regulations are well intentioned, but we must now confront their cumulative effect," he will say, arguing it is costing the economy billions each year. Like Ms Wood, he will warn against the impulse of solving issues by simply announcing new laws or regulations. "More rules is always seen as good. The minister can announce the problem is solved. The caravan moves on. The dog barks," he will argue. "There is limited interest in how the new rules are enforced — unless there is a scandal." The Coalition's answer is deregulation, with a focus on "genuine enterprise with limited, rather than repressive, controls".
News.com.au
3 hours ago
- News.com.au
Hunger for growth ‘missing' from economic policy, productivity tsar says
Decision makers must adopt a 'growth mindset' to fix the productivity problem plaguing the economy, according to Australia's productivity tsar. Labor's highly anticipated Economic Reform Roundtable will kick off on Tuesday, bringing together 'a range of people with a range of views', as described by Anthony Albanese. The point of getting unions, business leaders, and policy experts in the same room as politicians is building consensus on how to boost productivity, or how efficiently an economy produces goods and services. Productivity Commission (PC) chair Danielle Wood will use a major speech on Monday to call on fellow roundtable attendees to be bold as they 'thrash out potential reforms to kickstart Australia's flagging productivity growth', warning that failure could bust the 'generational bargain' of handing over a better country to the future. 'I'm thrilled by the new appetite for economic reform that the roundtable has created over the past two months,' Ms Wood will tell the National Press Club, according to a copy of her speech seen by NewsWire. 'Ultimately the government will be judged on its actions and the outcomes they achieve. 'But it has taken an important step by recognising and pursuing economic growth, and the productivity that drives it, as a prime goal of policy. 'This 'growth mindset' – an elevation of growth and the benefits it brings – has been missing from Australian policy for far too long.' Faced with challenges posed by geopolitical turmoil, climate change and an ageing population, she will point out that young Australians do not believe they will have 'better lives than their parents'. 'The expectation that life will get better for each successive generation is Australia's generational bargain,' Ms Wood said. 'For many generations we have fulfilled its promise. Until, perhaps, this one. 'Overwhelmingly, young people today believe they won't live better lives than their parents did. 'As chair of the Productivity Commission, I'm worried too.' She will note that the PC has already given the Albanese government some options. Her agency released five reports over the past month zooming in on key areas, ranging from increasing economic agility and workforce training to harnessing artificial intelligence and the net zero transition. On economic dynamism, the PC proposed reforming Australia's corporate tax system to encourage business investment, which has declined since the Global Financial Crisis. It would cut the corporate tax rate for most businesses to 20 per cent and introduce a 5 per cent cashflow tax on all businesses, with a view to creating friendlier conditions for investors. The result, according to Ms Wood, 'would increase investment by $7.4bn and GDP by $14.6bn'. 'Big enough to get out of bed for, I would think,' she will say. On AI, the PC warned against a new overarching regulatory framework for AI and instead update existing regulations to address risks like fraud and discrimination. 'This would translate to an additional $116bn in economic activity – equivalent to boosting incomes for each Australian by $4300 a year over that period,' Ms Wood will say. 'A growth mindset means that we must not regulate our way out of this opportunity.' Less regulation was an overarching theme in all the PC's reports. Using those the reports as guides, Ms Wood will put forward three 'lessons about what a growth mindset looks like'. 'Regulate with growth in mind,' she will say, calling for 'leadership from the top when the policy sausage is being made'. In a nod to AI, she will say, 'Real growth comes from new ideas and technology,' arguing that productivity growth comes from new ideas, products, processes, and ways of managing people. While physical inputs have limits, human ingenuity does not, Ms Wood will say. Therefore, a growth mindset should focus on fostering innovation and enabling Australia to benefit from its own inventions and those of others. Her final lesson is that productivity 'is a game of inches'. 'There is simply no single policy reform that can bring productivity growth back to its long-term average of 1.6 per cent,' Ms Wood will say. 'To shift the dial, governments will have to make a lot of pro-productivity decisions.' Though, acknowledging the mammoth task, she will say she is 'optimistic that there is a package here that can make a difference to Australia's prosperity'. 'Governments must embed the importance of growth in every decision they make,' Ms Wood will say. 'This means engaging with trade-offs, better program delivery and design, and the 'boring but important work' of reducing administrative burden. 'We must ensure that governments pursue a growth agenda, for the benefit of businesses and workers today and, more importantly, for the generations to come. 'And that's worth a few days locked in a room.'
7NEWS
5 hours ago
- 7NEWS
Banked $10,000 30 years ago instead of buying shares? You've cost yourself $180,000
When investor Adrian Blazic first put his money into the share market, it was a leap of faith. 'No one knows what's going to happen,' he says. 'It's not about predicting the future, it's about sticking to a strategy.' That strategy — staying invested through the ups and downs — has delivered for him. 'I'd be expecting to average 9.5 to 10 per cent per annum,' Blazic says. His story echoes the findings of Vanguard's 2025 Index Chart, released on Friday, which lays bare the extraordinary gap in returns between long-term investing and parking money in cash. According to Vanguard, a $10,000 investment in Australian shares made on July 1, 1995 would have grown to $143,786 by June 30 this year. The same amount invested in US shares would now be worth $214,332, more than $180,000 ahead of the cash equivalent and about $72,000 more than Australian shares. By contrast, a $10,000 deposit left in a savings account over the same 30-year period would have grown to just $33,677. The average annual returns since mid-1995 were: US shares: 10.8 per cent Australian shares: 9.3 per cent International shares (ex-Australia): 8.3 per cent Australian listed property: 8 per cent Australian bonds: 5.5 per cent Cash: 4.1 per cent All figures assume income was reinvested and exclude investment acquisition costs, fees and taxes. 'Share market investors on average achieved at least triple the dollar returns of individuals who chose to keep their cash tied up in savings accounts over the last 30 years,' says Daniel Shrimksi, managing director of Vanguard Australia. The three-decade period tracked by the Index Chart includes some of the most severe market events in modern history, including the dot com crash in 2000, the September 11 terrorist attacks, the Global Financial Crisis in 2008–09, the COVID-19 plunge in 2020, and more recent volatility driven by high US tariffs on some countries. Each event triggered steep declines. September 11 sent global stocks tumbling. The GFC wiped trillions from markets. COVID sparked a 34 per cent crash. Yet every time, markets recovered. 'The index chart demonstrates how investment markets have kept rising strongly over time despite several significant share market corrections, economic downturns, changes in governments and world leaders, wars, natural disasters, and the impacts stemming from the COVID-19 pandemic,' added Shrimksi. He argues investing should be approached like a long-distance race. 'Just like superannuation, investors should be focused on achieving longer-term outcomes rather than on shorter-term wins and losses,' he said. 'The most successful investors have a disciplined approach and understand that volatility is typically transient. The best investment results are generally achieved through compound growth over time, not by trying to time when to buy and sell, that's a futile exercise.' Scott Phillips from The Motley Fool says volatility can rattle even experienced investors. 'It can look really volatile, and sometimes it is,' he says. Vanguard's data shows why chasing last year's winners can be risky. Asset class rankings often change dramatically from one year to the next. 'The best and worst performing asset classes in any one financial year rarely mirrors the returns of the previous financial year for a whole range of reasons,' Shrimksi says. 'That's why it's so important to have a diversified mix of investments across asset classes and regions. While shares have delivered the strongest returns over the longer term, there have been years when more defensive assets such as bonds, and even cash, have achieved the best returns.' For Blazic, the takeaway from decades of data and lived experience is simple: 'With investing, it's certainly a long-term game.' The advice from the experts is just as straightforward: save consistently, invest regularly, build wealth slowly over time and avoid get rich quick schemes.
