Australia is a wonderful place to live and work, but years of economic reform inertia and poor policy decisions mean our living standards are under threat. Rio provides Australia with an opportunity to reverse our slide down the medal tally of recent Olympic Games. In a similar way, this election gives us an opportunity to climb back up the economic competitiveness rankings.
During decades of uninterrupted economic growth Australia's national income per person rose much more than in countries we usually compare ourselves with. But much of our prosperity came from past reforms and the once-in-a-lifetime boom in commodity prices.
Now the boom is over, our economy is in transition and we face real challenges.
Some of Australia's economic difficulties are due to international forces and an ageing population, but we are growing more slowly than we should. That's because of poor public policy and political gridlock.
Australia is an increasingly uncompetitive place to do business. Other countries are embracing policies that make their economies more competitive. Australia is falling behind. Over the past decade Australia fell from 10th to 21st on the Global Competitiveness Index. Our biggest weaknesses are innovation, tax and workplace relations.
If we do nothing, over the next 10 years Australia's income growth will be less than half what we have experienced in recent years. That means lower profits, weaker government revenue, smaller pay rises and lower growth in living standards.
Whoever wins the election on July 2 must have a clear plan for improving our competitiveness.
The Australian Chamber of Commerce and Industry is asking politicians, the people who want to run the country for the next three years or more, to back our Top 10 in 10 agenda: 10 policies that will lift Australia back into the top 10 most competitive countries within 10 years.
These 10 steps include encouraging more employers to offer young people apprenticeships, building the infrastructure we need without pork barrelling, giving managers and workers the freedom to adopt workplace arrangements that suit their needs, containing government spending to a level the country can afford and supporting investment through reducing the company tax rate.
Cutting the company tax rate is a hot topic. So it should be, given the significant amount of money involved and the great potential it has to spur investment, create wealth and increase jobs.
Both major parties back a company tax cut for businesses with turnover up to $2 million, and the Government wants to include all businesses eventually.
The Australian Chamber represents businesses of all sizes. Some of our members are big companies with foreign as well as Australian investors, but most are small or medium businesses.
So why not just support tax cuts for businesses with a turnover of less than $2 million? The answer is that everything is connected.
When a large company closes a factory, it has an enormous effect on local households and families and the small businesses that make up their community. And if Australia continues to have a high company tax rate, we can expect more factory closures as businesses head overseas to countries that are more competitive.
The flow of foreign investment into Australia will slow and every Australian will be worse off, regardless of whether they own, run or work in a business.
It is not foreign investors and multinationals that lose out if we are uncompetitive. They will simply put their money in the next most competitive investment in another country.
I have worked for global companies, and I can tell you that every year the head office gets competing bids for funds for its businesses in different countries.
A more competitive business tax rate means more investment, more investment means more growth in the business, and more growth in the business means higher wages and more jobs.
The Australian Treasury found that reducing the corporate tax rate to 25 per cent would boost real wages by 1.2 per cent.
The frequently touted $50 billion in reduced tax revenue over 10 years is an investment that will be dwarfed by the benefits of higher wages and more jobs, now and into the future.
The company tax cut and the other nine steps are important. But they are just the beginning.
Our Top 10 in 10 is the goal. Our Getting on With Business policy manifesto, which we are releasing today (Tuesday), is the detailed game plan for the next Australian Government to help create a more competitive Australia.
Let's make sure the success of the Green and Gold extends well beyond the sporting arena.