Urgent reform needed for economic bounce back: Committee for Sydney report

Australia must embrace a new era of innovation and reform if it wants to rebound from its first recession in nearly three decades: Committee for Sydney report.

‘Australia needs to make some difficult but important reforms in order to recover from recession and not be left behind by the changing world economy’: Committee for Sydney chief executive Gabriel Metcalf.

Australia must embrace a new era of innovation and reform if it wants to rebound from its first recession in nearly three decades, a new report says.

The Committee for Sydney, backed by modelling from Ernst and Young, says Australia will not regain its pre-COVID levels of prosperity without key reforms such as increased investment in research and development spending, making entrepreneur visas easier to access and supporting international students to stay in Australia after they graduate.

The body’s chief executive, Gabriel Metcalf, said the report highlighted the fact that almost 30 years of uninterrupted economic growth reduced the impetus to reform the nation’s economic and social systems.

“Australia needs to make some difficult but important reforms in order to recover from recession and not be left behind by the changing world economy,” he said.

“COVID-19 will lead to the biggest loss of economic activity in Australia since World War II. How we respond will have a fundamental impact on our economy and society. Growing the innovation econ­omy will be the key growth area for new jobs and new sources of national income; without this, Australia will not regain its living standards for many years.”

Mr Metcalf said while some of the reforms had been on the table for years, the coronavirus pandemic had made their rollout even more important. “Many of these reforms have substantial costs but the alternative — sustained economic decline –— will cost much more.”

Among the report’s suggestions for reform are speeding up the nation’s internet speeds by giving the NBN an objective target of being in the top 50 per cent of OECD countries for broadband speed by 2030 and the top 25 per cent by 2035.

It says the income threshold and upfront costs for sponsoring firms should also be reduced to make it easier for high-skilled people to work in Australia.

Another suggestion is tax reform through elimination of payroll taxes and replacing stamp duties with a broadbased land tax or an increase to the rate of GST.

The committee says the government should give more funding to the university sector and let international students count up to one year studying online with an Australian education provider towards a post-study work visa.