Invest
Not a clever country: Why Australia needs to develop highly skilled sectors
Invest
Not a clever country: Why Australia needs to develop highly skilled sectors
Australia should transition away from mining and property towards industries of the future or risk losing competitiveness over the long term, an industry expert has warned.
Not a clever country: Why Australia needs to develop highly skilled sectors
Australia should transition away from mining and property towards industries of the future or risk losing competitiveness over the long term, an industry expert has warned.
Speaking at the Tax Institute’s summit, former head of the treasury budget and revenue group Greg Smith said Australia needs to look at its advantages as a society to help develop creative and highly skilled sectors that are necessary to grow the economy.
“Australia cannot rely on the mining industry as its sole economic advantage in the long run,” Mr Smith said.
“I don’t see us being a big manufacturer. I don’t see us being able to get back to being an exporter of services, which we’ve lost a fair bit of with this pandemic.”
Instead, Mr Smith believes Australia should look to the knowledge-based part of the economy such as information technology, media or research and development and knowledge-based services such as education, consultancy or financial planning.
“At the moment, only 10 per cent of our total investment is going into intellectual property. Whereas in most of the rest of the advanced world, its 20-30 per cent of investment goes into that sector,” Mr Smith said.
He pointed to the dangers of Australia’s current economy which is dominated by the mining sector and property.
“A country that invests mostly in the primary sector and in property, I don’t think is going to be able to cut it in the 2030s and 2040s without shifting investment as well,” Mr Smith continued.
In his keynote, Mr Smith said he was a realist when it came to the achievement of that goal.
“What we need to recognise is we’re not remotely clever at the moment. That is very much an aspirational stretch and somehow Australians have to wake up to the fact that it requires a combination of public and private investment to actually deliver it.”
“Every other country in the world which is delivering on these fronts is delivering through that combination,” he said. “Everywhere in the world which is making any sort of inroad on that, do it jointly, and that’s the big mistake that Australia has made, not realising that.”
“I actually think there will be a need for another tax reform. It’s just that it’s not going to look like the one that, unfortunately, is being called for by 99 per cent of the people calling for tax reform at the moment. It’s going to be a very different type of tax reform. And I think it will be a public policy reform rather than just a tax reform,” Mr Smith concluded.
RELATED ARTICLES
About the author
About the author
Economy
Economist calls for July RBA rate cut following inflation data
An economist from State Street Global Advisors has called for the Reserve Bank of Australia to cut interest rates in July following today's Consumer Price Index data for June. Read more
Economy
GDP data prompts economist to predict faster RBA rate cuts
Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively. Read more
Economy
Global markets face turbulent start amid tariff concerns, but outlook remains cautious
Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks. Read more
Economy
RBA may cut rates faster if GDP data disappoints, economists say
The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May. Read more
Economy
RBA delivers widely expected rate cut as inflation optimism balances global uncertainty
The Reserve Bank of Australia has cut the cash rate by 25 basis points, delivering on widespread market expectations while signalling a clearer directional shift towards less restrictive monetary ...Read more
Economy
Economist warns strong jobs data may delay further RBA rate cuts
Strong employment growth in April has put expectations for multiple interest rate cuts at risk, though upcoming economic data may clarify the need for lower rates, according to State Street Global ...Read more
Economy
Australian inflation continues downward trend, nearing RBA target
The Australian Bureau of Statistics (ABS) has reported that the Consumer Price Index (CPI) rose 2.7 per cent in the year to August, down from 3.5 per cent in July and 3.8 per cent in June. Read more
Economy
UK markets poised for gains after election, global geopolitical risks remain
Chris Iggo, Chief Investment Officer at AXA Investment Managers, has provided an optimistic outlook for UK markets following the recent general election, while cautioning about ongoing global ...Read more
Economy
Economist calls for July RBA rate cut following inflation data
An economist from State Street Global Advisors has called for the Reserve Bank of Australia to cut interest rates in July following today's Consumer Price Index data for June. Read more
Economy
GDP data prompts economist to predict faster RBA rate cuts
Australia's latest GDP growth data has come in significantly below expectations, prompting an economist to suggest the Reserve Bank may need to ease monetary policy more aggressively. Read more
Economy
Global markets face turbulent start amid tariff concerns, but outlook remains cautious
Global equity and bond markets have experienced a turbulent start to 2025, primarily due to concerns that a potential tariff-driven trade war could heighten inflation and recession risks. Read more
Economy
RBA may cut rates faster if GDP data disappoints, economists say
The Reserve Bank of Australia may cut interest rates more quickly if next week's GDP data disappoints, economists said following today's consumer price index data for May. Read more
Economy
RBA delivers widely expected rate cut as inflation optimism balances global uncertainty
The Reserve Bank of Australia has cut the cash rate by 25 basis points, delivering on widespread market expectations while signalling a clearer directional shift towards less restrictive monetary ...Read more
Economy
Economist warns strong jobs data may delay further RBA rate cuts
Strong employment growth in April has put expectations for multiple interest rate cuts at risk, though upcoming economic data may clarify the need for lower rates, according to State Street Global ...Read more
Economy
Australian inflation continues downward trend, nearing RBA target
The Australian Bureau of Statistics (ABS) has reported that the Consumer Price Index (CPI) rose 2.7 per cent in the year to August, down from 3.5 per cent in July and 3.8 per cent in June. Read more
Economy
UK markets poised for gains after election, global geopolitical risks remain
Chris Iggo, Chief Investment Officer at AXA Investment Managers, has provided an optimistic outlook for UK markets following the recent general election, while cautioning about ongoing global ...Read more
