Housing will be the key to a smooth transition to non-mining sectors for our economy in 2014, a leading economic think tank’s annual overview says.
The Committee for Economic Development Australia’s (CEDA) 2014 Economic and Political Overview was delivered in Perth today.
The overview forecast business investment will remain subdued, while the government will face increasing pressure from the business community to deliver reforms around tax and industrial relations.
CEDA Chief Executive Professor Stephen Martin said in addition to the economic and political forecasts, this year the publication also examined government productivity, red tape and how external factors will shape Australia’s economy, in particular looking at China.
“These issues were selected because they must be put under the national spotlight this year if we are to keep the Australian economy on track to lift its productivity and international competitiveness,” Martin said.
“Reducing red tape and improving government productivity are areas that need a strategic long-term plan. The business community expected clarity on how these issues would be tackled with the change of Federal Government last year, but unfortunately the clarity has not yet come to fruition.
“To make real changes in government productivity we must have an informed public debate on the role of government and what services the public is willing to pay for, it cannot simply be about reducing the head count in the public sector.
“CEDA last year called for an increase in the Medicare levy to better cover the cost of healthcare in Australia and that is the exact type of discussion that needs to be on the table now.
“In addition, introducing measures to reduce red tape, such as periodic audits of regulators and government departments, should be a priority.”
On the political front, Martin said the Commission of Audit and spending cuts will be centre stage at a federal level along with how Tony Abbott and his team manage the Senate.
“While it is expected the Senate will favour a coalition government, key members are likely to be unpredictable and it will take enormous diplomatic skill to manage,” he said.
“At a state level, our experts predict changes of government in South Australia and Tasmania.”
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