Canberra
The National Panel for Economic Reform (the Panel) held its inaugural meeting in Canberra today, bringing together leaders from the Government, business community, union movement and community sector to work in collaboration to develop, agree and champion reforms which will drive long-term productivity growth.
The Panel consists of the Prime Minister and representatives from the Business Council of Australia, the Australian Council of Trade Unions, the Australian Industry Group, the Australian Chamber of Commerce and Industry, the Council of Small Business of Australia and the Australian Council of Social Service. Reflecting his role as the Government's primary economic manager, the Deputy Prime Minister and Treasurer is a permanent invitee to the Panel. Given unfolding events, the Deputy Prime Minister remained in Queensland to oversee the Commonwealth's contribution to supporting communities affected by the floods and did not join the Panel for its first meeting.
Through its focus on reforms which support long-term productivity, the Panel will advance the national goal of ensuring that Australia's Gross Domestic Product (GDP) per person is in the world's top 10 by 2025. As noted in the Australia in the Asian Century White Paper (the White Paper), this goal will be achieved as a result of concerted and coordinated efforts across the entire community. The Panel agreed that this improved economic performance should occur in the context of improving equity, participation and reducing disadvantage. The Government will continue to progress productivity-enhancing reforms across the five pillars of productivity - skills and education, innovation, infrastructure, tax reform and regulatory reform, which all contribute to high-performing and productive workplaces.
In recognition of the fact that Australia's greatest asset is its people, the Government has decided that the Panel's initial focus will be on human capital and the role of the skills and education system in preparing, and continuing to up-skill, Australians so they can contribute at the workplace and delivering against the needs of the economy, as well as on how to promote innovative and productive workplaces. This focus on human capital reflects that “Our greatest responsibility is to invest in our people through skills and education to drive Australia's productivity performance and ensure that all Australians can participate and contribute”, as noted in the White Paper.
Consistent with the skills and education focus of the first topic for discussion, the Minister for Employment and Workplace Relations and the Minister for Tertiary Education, Skills, Science and Research were also invited to participate in part of the meeting.
Australia's Current Economic Conditions and Fiscal Outlook
On the Deputy Prime Minister's behalf, the Treasury briefed the Panel on the current economic environment.
Australia's economic performance has been underpinned by a robust and flexible macroeconomic framework, the pursuit of policies over more than 30 years that are outward-looking and open to the economic opportunities in our region, and wide-ranging productivity-enhancing structural reforms.
The Panel noted the outlook for the Australian economy and agreed that productivity growth will need to improve in order to sustain growth in Australia's living standards. The Panel also discussed the need for short term fiscal settings to be appropriate for growth and jobs and the importance of maintaining sustainable public finances over the medium term.
Human Capital
Australia's Skills and Education System
The skills and education system plays a critical role in delivering sustainably higher living standards through forming one of the five pillars of productivity. The system has been the subject of wide-ranging reform over the last five years. Skills and education create social and economic benefits through enhancing civil society, providing greater opportunities and generally improving life outcomes.
Although there may be broad agreement as to what the objectives of the skills and education system are in Australia, there is no formal statement of them across the system as a whole. This is likely to be because the system is often looked at in a piece-meal fashion due to its size and complexity. The Panel agreed a high-level statement of system objectives:
That Australia's skills and education system should deliver the skills and knowledge required for employment and participation for: Australians to achieve sustainably high living standards and lead productive and rewarding lives; the economy to be globally competitive; and to enrich our society.
The Panel agreed that it should focus on addressing questions that have the potential to significantly improve Australia's productivity performance, and which would benefit most from joint deliberations by government, business, unions and the community sector. The Panel had a preliminary discussion on the system and agreed to consider the following questions in more detail, in the context of broad-based reform, at its next meeting:
* How can we ensure the foundation skills of literacy and numeracy are built from early childhood through to mature education?
* How can we ensure the skills and education system equips people for the workplace, thinking - in the first instance - about the design and operation of the vocational education and training system?
* How could the skills, training and education system better prepare Australians to be highly productive and to support the speed of adjustment needed to adapt to structural and technological change?
* How could the skills and education system better serve disadvantaged Australians?
* What are the appropriate roles and responsibilities for individuals, institutions, governments and industry in the education and skills system?
Productive and Innovative Workplaces
The Panel noted that productivity growth requires that people have the right mix of skills and that the skills and knowledge of Australians to be applied to enable innovative and productive workplaces. The enterprises that will contribute most to increased productivity in the coming years will be highly adaptable, will respond quickly to competitive pressures and opportunities, will draw the best from their people through utilising and developing their skills, and will have relevant and effective collaboration. The Panel had a preliminary discussion on this issue and agreed to consider the following questions at its next meeting:
* Why do some enterprises systematically improve their management and work practices and skills utilisation, while others do not? How can enterprises, unions and government work together to encourage more businesses to improve in this regard?
* How can the particular issues facing small and medium-size enterprises be best addressed?
* What impacts are structural changes in the economy, including greater competition in export sectors, having on the need to improve skill utilisation?
* What can be done to ensure that those working continue to develop broad-based skills in the workplace, and are adaptable as work evolves?
* What is it that needs to be done to build more collaborative workplaces? What are examples of where it is working well?
Working Group
The Panel will be supported by a Working Group of representatives from each member organisation. The Working Group will assist the Panel by presenting relevant facts and data to the Panel to assist it in making recommendations.
Next Meeting
The Panel agreed to hold its next meeting in late April 2013.