A report released by the Australian Institute’s Centre For Future Work has found Australian businesses’ investment in new machinery to be weaker than at any point in Australia’s post-war history.
Business spending on new research and technology has also been falling in Australia and now ranks well behind the average of other industrial countries (and even some emerging economies, like China).
“Until recently, Australia was recognised for its sophisticated and successful research and innovation capacities. Australia’s R&D commitments (especially business research spending) have been declining over the last decade,” said Dr Jim Stanford, economist and director of the Centre for Future Work.
The average amount of machinery and equipment used by the typical Australian worker has been declining since 2014, and has since fallen by 6 per cent.
“Australian businesses are not investing nearly enough in new technology,” Dr Stanford said.
However, a lack of business investment in new technology does not mean that Australian jobs are somehow safer.
“To the contrary, the failure of business investment means that even more jobs will be located in low-productivity, low-tech, low-wage industries – with terrible implications for wages and job quality,” Dr Stanford said.
This is resulting in Australia’s productivity falling, which is having an impact on the economy at large, the report found.
“Business leaders love to complain that Australia’s productivity problems are due to red tape, taxes and unions. The evidence is clear that their own failure to invest in new capital and new technology explains the stagnation in productivity. Instead of blaming others for this outcome, business leaders need to look in the mirror,” Dr Stanford concluded.
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