CEOs’ big call: Don’t waste inflation crisis, seize the moment for reform
Our annual poll of Australia’s business leaders lays out a vision that can pull the nation out of its low-growth future. But it will need a team effort.
The inflation crisis should be the trigger to unleash a wave of wholesale reform setting the Australian economy up for the long term and pulling it out of the current low-growth path, the nation’s most influential chief executives have said.
The Australian’s CEO Survey 2025 has revealed a sense of growing frustration inside the boardrooms of corporate Australia that the reform agenda to drive the bold changes needed to modernise the economy has stalled, and this risks locking the nation into a damaging cycle of high costs and declining national wealth.
The comments from chief executives to The Australian’s exclusive annual poll offer a road map for reform, but with a plea for both sides of politics to start thinking long term to facing up to the issues holding back the economy.
Among the findings from The Australian’s CEO Survey 2025:
• The level of regulation is rising rapidly, adding to the cost of doing business.
• An alarming collapse in productivity is undermining investment.
• Near record levels of government spending is crowding out jobs and adding to inflation.
• There are renewed calls for wholesale reform to the tax system, with a once-in-a-generation chance to also tackle state-based taxes and charges.
• Energy settings need stability to promote investment certainty.
The Australian’s CEO Survey 2025 spoke in depth to about 70 of the nation’s business leaders from mining, energy, banking, manufacturing and retail on their plans for investment, reform, technology and the rise of Donald Trump.
And while their assessment of the economy is that it may have passed the worst of the downturn, there are serious risks ahead. The CEO Survey 2025 continues in coming days in print and across digital channels, including the CEOs’ answers in their own words.
BHP chief executive Mike Henry said business can drive Australia forward, but it needs to be in partnership with the government.
“The Treasurer was correct when he said recently it’s the private sector which is the best source of economic growth in the long term. Well-informed and crafted government policy needs to enable competitiveness and to attract capital,” Mr Henry said.
“Australia is an export-oriented economy, and it is essential for the nation and future generations that we are able to compete on the global stage.
“Political leaders need to be examining the entire set of policy and regulatory settings and asking whether they are moving Australia towards being a more competitive place to invest and do business.”
Wesfarmers chief executive Rob Scott, who has been increasingly vocal about falling productivity, said Australia was at a “tipping point” in facing a choice for reform.
“If we don’t improve productivity now, we risk becoming the unlucky country later. Action to turn this around needs to be a collaborative Team Australia effort – government working hand-in-hand with business, to improve outcomes for all Australians,” Mr Scott told the survey.
Australia has recorded one of the worst productivity performances among developed world economies coming out of the Covid pandemic, prompting Treasury to recently downgrade its long-term forecasts, which affects the outlook on growth.
Mr Scott, whose company is one of Australia’s biggest employers with retail brands including Bunnings, Kmart, Officeworks and Priceline, said: “The productivity enhancing reforms of the 1990s showed us that when the government gets the settings right, businesses are ready to invest and do the heavy lifting to drive our economy forward.”
National Australia Bank chief executive Andrew Irvine said productivity issues were having real world consequences today, including compounding the crisis levels of a shortfall in accessible housing.
“Nowhere is weak productivity being felt more than in the housing sector, where Australia cannot build enough houses, while building companies and property developers tell us they are struggling to make projects financially viable,” Mr Irvine said.
“There’s no easy fix to this national crisis. We need more skilled migrants and to be more innovative in the types of housing and methods of construction. An enhanced focus on skills and training is vital to lifting productivity by ensuring Australia has the skilled workforce needed for the future.”
Woodside chief executive Meg O’Neill said: “If Australia is to reach its economic potential, we need a national conversation on reform options that can unlock productivity, drive competitiveness and allow Australia to thrive in an uncertain world.”
She said policies to help unlock energy – including bringing more gas to market – could be an enabler for other businesses to grow.
“All businesses, whether in the energy sector or elsewhere, need certainty and stability in fiscal policy and regulatory settings in order to invest with confidence. Unfortunately, outdated regulation is being exploited by activists using lawfare to slow or stop new investment in Australia,” she said.
Ampol’s Matt Halliday also highlighted competitive energy policy, while calling for labour market flexibility.
“Competitive energy and labour are critical foundations that flow through almost every part of the economy,” Mr Halliday said.
“To strengthen Australia’s global competitiveness, it is essential to ensure we have a labour market that is flexible, innovative and can deliver the necessary skills in areas where Australia has advantages.
“It is equally important we can deliver competitive energy across the economy, and both these elements will be instrumental in driving sustainable productivity growth and ensuring Australia’s success in global markets.”
Telstra chief Vicki Brady said it was important that policy and regulatory settings were pulling in the same direction to support investment. Then the nation needed to consider the areas where it could play a leading role, such as digital infrastructure.
“The potential of the digital economy, and the opportunity that holds for Australia, is immense. Policies that support innovation and digital transformation will be critical to ensure Australia maintains its competitiveness in the global market and grows its economy,” Ms Brady said.
“To unlock this growth, it’s critical that our regulatory and policy settings evolve so that they continue to promote competition and protect consumers, while also encouraging investment and innovation”.
Coles chief executive Leah Weckert was among those to call out the need for broad-based tax reform, given Australia’s heavy reliance on income tax.
“It will be unsustainable for the country to increasingly rely on the income tax burden of a shrinking workforce, as the population ages,” Ms Weckert said. “Tax structures that inspire Australians to innovate and create change in the workplace, rather than invest in less productive assets, would be a strong step towards a more productive and prosperous Australia.”
Of a similar vein, Medibank chief executive David Koczkar said more targeted reform of the health system, including preventive health, would ease the longer-term pressures on the budget.
“If we don’t move faster on the shift towards prevention, the government will need to spend nearly 50 per cent more on health as a proportion of GDP in 40 years’ time, with hospital spending the fastest growing part. So we need to move from a hospital system to a health system.” Mr Koczkar said.
Many point out red tape and regulation is under the spotlight, particularly as incoming US president Donald Trump has promised to pursue a deregulation agenda.
“The biggest issue we consistently hear from our client base is the significant and growing impost of federal and state government regulation which is stifling business investment and innovation,” said Adam Powick, chief executive of Deloitte Australia.
“We need a robust review of how we simplify, declutter, and better co-ordinate our business regulatory frameworks and ensure we have appropriate business leadership voices at the table when new regulations are designed and implemented”.
Others have spoken of compliance costs and industrial relations processes as all providing a barrier to business spending and employment.
New Westpac chief executive Anthony Miller argued Australia should put more focus on building up skilled labour will deliver a major boost for business.
This would involve “consistent, focused investment in skilled migration combined with skills development”.
“We can more actively manage our migrant intake to target the skills we need,” Mr Miller said.
“So many mid-size commercial businesses, especially in regional areas, talk to us about the need for more skilled workers. We can grow skilled migration aligned with areas of national interest – regional roles and businesses, housing construction, energy transition, advanced manufacturing and infrastructure.”
Next week: The AI puzzle and working from home
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