The Australian Services Roundtable (ASR) believes the lack of recognition of services sectors in the Abbott Government’s Industry Innovation and Competitiveness Agenda is a missed opportunity to grow the economy.
It further believes that the lack of focus on the services sectors in this plan has the potential to undermine much-needed national productivity improvements and could also jeopardise the creation of high value jobs of the future.
ASR’s CEO Ian Birks commented, “The industry agenda of the Government seems to assume that services sectors have no need for targeted support or development. This is in direct contrast with many of our international competitors in the Asia Pacific region and beyond.
By not targeting services for funding and resources, Australia risks missing the huge opportunity to be a leader in fast-growing, knowledge based services sectors such as being a regional Financial Services hub, further developing its globally competitive Education services sector and being a leader in parts of the Internet economy (already 3.4 percent of GDP in the world’s largest countries and growing exponentially),” Birks added.
The new policy seems to reverse the Coalition’s strategy developed in Opposition of focusing on strengthening the five pillars of the economy – namely Mining, Agriculture, Manufacturing, Services, and the Knowledge economy.
According to the Australian Bureau of Statistics (ABS), the Gross Value Added (GVA) contribution of these five pillars in 2012 were:
• Services sectors – 71.2 percent of national GVA
• Mining sector – 10.6 percent of the national GVA
• Manufacturing sector – 7.7 percent of national GVA
• Agriculture sector – 2.3 percent of the national GVA
• Knowledge Economy – not separately stated but reported in the Services GVA contribution and estimated at approximately 8 to 10 percent of GVA.
The services sectors are the primary economic value-adding contributors to the Australian economy, and are consistently among the fastest growing sectors in both domestic economy and trade terms.
Other sectors such as manufacturing are demonstrably in decline.
ASR believes that Australia’s successful participation in the knowledge economy is a critically important component of creating high-value services jobs of the future. Australia already has many global exemplar professional services and knowledge economy firms that could be supported to create a great springboard for future in a forward thinking industry policy approach.
With the release this week of the new Industry Innovation and Competitiveness Agenda however it has become clear that the primary Industry Growth Centers in the Government’s plan are going to be focused on:
• Food and agribusiness;
• Mining equipment, technology and services;
• Oil, gas and energy resources;
• Medical technologies and pharmaceuticals; and
• Advanced manufacturing
ASR urges the Industry Minister and the Prime Minister to reconsider the design of the Industry Innovation and Competitiveness Agenda to put a greater focus on key services sectors for the future.