Ken Henry:why Australia's non-mining sector will continue to struggle .
A new approach to tackling the structural effects of Australia’s record terms of trade on non-mining industries is needed from both business and government, argues one of Australia’s most eminent economists, Dr Ken Henry.
In a speech to the Business Symposium of the Australian Conference of Economists at Victoria University in Melbourne, Dr Henry has argued Australian businesses outside the booming resources sector will continue to face falling international competitiveness and options such as “offshoring” will need to be considered.
Dr Henry argues the debate around lifting Australia’s productivity and our international competitiveness has become confused, with a common but incorrect belief that growth in the resources sector can off-set weakness in the non-resources sector.
“The truth is, of course, that if the resources sector were to grow even faster, then the non-resources sectors must grow at an even slower rate,” Dr Henry says.
Dr Henry is Special Adviser to the Prime Minister responsible for leading the development of a White Paper on Australia in the Asian Century. He is part-time executive chairman of the Institute of Public Policy at the Crawford School of Public Policy at ANU.
It is no exaggeration to say that, if Australia is going to navigate successfully the structural adjustment to the terms of trade shock presented by the extraordinary growth of China and others in the region, a new mindset will be required: a new mindset in government, certainly; but a new mindset in business and the broader community also.
Im loathe to mention politcis on this forum,yet I truely wonder whether the dog or the tail is in command.
