Australia’s peak accounting body has urged governments to stop treating increased regulations as the default response to every issue.
CPA Australia, in a statement released this week, said red tape was a direct drag on productivity.
“Governments must stop treating regulation as the default response and start proving that non‑regulatory options have been exhausted,” CPA Business and Investment Lead Gavan Ord said.
In its submission to the Federal Parliamentary Select Committee on Productivity in Australia, CPA said that unchecked public spending growth risked crowding out private investment and worsening productivity outcomes””.
“Productivity growth is driven by a strong, innovative private sector,”Mr Ord said.
“Excessive public spending can pull capital and labour away from more productive uses and ultimately make the problem worse.”
The submission says Australia’s “productivity crisis” is now serious enough to threaten economic growth, competitiveness and living standards.
“Australia is running out of time. If productivity continues to stagnate, living standards will go backwards and the economy will struggle to sustain growth,” Mr Ord said..
“This is not an abstract policy debate. Weak productivity ultimately means lower wages growth and fewer opportunities for Australian businesses and workers.”
The submission says comprehensive tax reform is fundamental if Australia is serious about lifting productivity.
“Our tax system is increasingly complex, uncompetitive and misaligned with where the economy is heading,” Mr Ord said.
“Continuing to avoid meaningful tax reform is a deliberate choice to accept weaker productivity and slower growth.”
More is available on the CPA website.
