Australia continues to languish outside the top 20 most competitive nations, according to the latest figures from the World Economic Forum.
In the annual global ranking of 137 countries, Australia ranked 21st overall in the WEF Index.
This was up one place from the previous rankings, but still behind similar countries including the United Kingdom (8th) New Zealand (13th), Canada (14th) and Israel (16th), and just ahead of France (22nd).
The most competitive nations are, in order: Switzerland, the US, Singapore, The Netherlands and Germany.
“Australia’s overall performance is not remarkable: in most pillars it does not rank among the top 25 countries,” the WEF said.
In the past decade Australia has fallen from 10th to 21st on the Global Competitiveness Index.
Our biggest weakness is in the areas of innovation, tax reform and workplace relations.
According to the report, Australia is being held back by restrictive labour regulations, tax rates, inefficient government bureaucracy and policy instability. They are the four most problematic factors for doing business in Australia, the report says.
Least problematic are public health, crime and theft, corruption and inflation.
However, the report highlighted a “noticeable” drop in supply of infrastructure, particularly communications infrastructure.
Company tax rates ‘must be reduced’
It also noted that Australia has comparatively high performance in higher education and training, “which reflects its capacity to produce a large pool of qualified workers.”
“The reality is that many other nations have been reforming their economies faster than us,” said James Pearson, CEO of the Australian Chamber of Commerce and Industry. (ACCI).
“We need to reduce our company tax rates to be competitive with the rest of the world and ensure we have world-class domestic policy settings to provide a business environment that unleashes our entrepreneurs.”
Mr Pearson said Australia needs to provide better assistance to employers to take on trainees, remove barriers to trade and investment, as well as slash red tape for local businesses.
“We must return to the economic reform agenda and address the issues that are holding our economy back,” he said.
“Improving our global competitiveness will ensure that all Australians benefit from the increased job opportunities and wage growth generated by a growing, competitive Australian economy.”