Why CEOs think the election presents a golden opportunity to fix nation’s productivity
Labor and the Coalition need to adopt an ‘Australia first ethos’ to turbocharge flatlining productivity and bolster competitiveness, say business leaders.
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The 2025 federal election is an invaluable opportunity to lift the economy out of its productivity slump and win votes with sensible policies aimed at growth and arresting a decade of fiscal deficits, business leaders say.
As the electorate prepares to head to the polls on May 3, entrepreneurs, executives and company directors are hopeful Labor and the Coalition will use their respective campaigns to support industries where the economy has sustainable advantages, and lay the groundwork for Australia to participate in global megatrends like the artificial intelligence boom where it can be a leader in data centre development.
Former Reserve Bank board member Mark Barnaba, who is the deputy chairman of iron ore miner Fortescue and chairman of homegrown data centre juggernaut AirTrunk, said the national debt, cost-of-living pressures and poor productivity should be at the heart of economic policy for either side of politics.
“There are large numbers of Australians around the country that are doing it very, very tough at the moment, and dealing with that has to feature in the plan and policies of whatever party wins government,” he told The Australian.
Mr Barnaba said boosting productivity would help keep a lid on inflation, but wage growth without commensurate productivity gains was a recipe for disaster.
“It is difficult to look back on the history of Australia and see a period where we had less productivity improvement than we currently have,” he said.
“And if we want to deal with inflation, we have to deal with productivity … We need to address that.”
The Reserve Bank is expected to keep interest rates on hold at 4.1 per cent when it meets next week, but its capacity to extend February’s interest rate cut will depend on keeping inflation inside its 2-3 per cent target band.
Treasurer Jim Chalmers’ federal budget handed down on Tuesday projects recurring fiscal deficits until 2035-36.
Mr Barnaba likened this to a millstone around the neck of future generations. “The balance sheet of a country is no different to a household. If you get too indebted, you will become financially distressed. There is no plan to rectify where our country’s balance sheet is,” he said. “You only have to go back to Peter Costello’s time as treasurer, which is not that long ago, and this country had a clean balance sheet, no net debt, and you look where it has arrived now. We are spending beyond our means.”
TechnologyOne chief executive Ed Chung referred to the 2024 US election outcome which returned Donald Trump to the White House and advocated for an “Australia First ethos” to bolster competitiveness.
Donald Trump has prioritised US companies over foreign-owned firms, igniting a trade war as part of his ‘Make America Great Again Pledge’.
Mr Chung said Australia’s political class needed to have the back of Australian business when the rest of the world “is not going to do us any favours”.
“Whatever the next parliament looks like, Australia has to face up to the twin crises of collapsing R&D investment and sliding productivity,” said Mr Chung, who oversees the $9.33bn Brisbane-based company.
“There is no solution to either without getting serious about supporting and building Australian tech industries. In every country with a strong local tech industry, growth, productivity and investment in ideas is higher. As the rest of the world focuses more and more on local-first, we need to build the Australia-first ethos.”
This could include an “if not, why not?” policy of buying local to support Australian tech.
Mr Chung said Australian ideas had made “overseas investors billions of dollars in the past 20 years”.
Indeed, growth in tech investment has been idle since the pandemic, languishing at 1.7 per cent of GDP, prompting the federal government to tap Tesla chair Robyn Denholm to lead a review aimed at overhauling research and development incentives.
“We now find ourselves struggling to put our university researchers on a sustainable footing, and with business investment in R&D collapsing. We need to change course quickly and value Australian industry, using everything we have in the toolbox,” Mr Chung said.
It is looking likely that Labor or the Coalition will govern in minority, according to betting markets on Friday. Sportsbet was favouring a Labor minority. But betting markets have been volatile, swinging erratically from week to week.
Prime Minister Anthony Albanese said he wanted to keep “building” while Peter Dutton has focused his campaign on “getting Australia back on track”.
Neither Labor nor the Coalition have proposed lowering the company tax rate, despite Mr Trump vowing to cut it to 15 per cent in the US, prompting the Business Council of Australia to call on the government to immediately raise the cap on R&D incentives from $150m to at least $250m.
Meanwhile, the Tech Council of Australia says if R&D spending rose to 4.6 per cent of GDP, it would inject an extra $38bn worth of productivity gains into the national economy by 2035. That number would rise to $167bn if tech investment rose to 6.9 per cent of GDP. Australia’s energy and property leaders craved unity and stability. Australian Energy Producers chief executive Samantha McCulloch said the industry was not looking for handouts; it wanted policy certainty and investment in gas supply.
“Australia needs long-term solutions that do not further distort the gas market,” she said.
Greatland Gold chief executive Shaun Day remarked: “It’s difficult to think of a period in Australian history where our productivity has been so lacklustre,” he said. “Ultimately, that is your best indicator of future standards of living in Australia.”
Meriton billionaire Harry Triguboff said: “One thing is clear: we absolutely cannot continue running deficits for another decade.
“Yes, the budget covers many areas, but housing deserves a stronger focus.”
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Originally published as Why CEOs think the election presents a golden opportunity to fix nation’s productivity
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