The ever-receding finish line
It’s been said that national competitiveness is like being in a race with an ever-receding finish line.
Our task is to keep getting better because that’s exactly what our competitors are doing.
Yesterday, we saw some hope that Australia is making improvement when it comes to our international performance. The latest World Competitiveness Report released by the World Economic Forum found that for the first time in five years Australia is moving up the international rankings (from 18 to 17).
Our national competitiveness is the key to attracting investment which fuels jobs, growth and contributes to taxes.
Unfortunately, some state governments are starting to take a short sighted view to foreign investment and to our national competitiveness.
In the latest Victorian Budget, the Andrews Government has increased its foreign investor duty to 7 per cent.
New South Wales, possibly the best performing state government in Australia, is considering risking its economic credibility by embracing a foreign investor tax in the upcoming State Budget. Why a reforming government would seek to tax investors away is difficult to understand.
Our state governments must resist the temptation of playing to an isolationist (and sometimes downright racist) sentiment to make a quick tax buck. It’s not worth the risk to jobs to see this investment leave our shores.
So let’s give up ‘the gimmicks’ and focus on improving Australia’s economic fundamentals.