Captains of Australian industry have a lengthy wishlist for new Prime Minister Malcolm Turnbull but also strong hopes the former tech entrepreneur can encourage innovation and energise an economy struggling with a fading resources boom.
Turnbull is lauded for his business acumen, with the technology sector particularly fond of the multimillionaire, who is an enthusiastic supporter of the innovation scene and start-ups.
The 60-year-old, who took power after defeating Tony Abbott in a Liberal Party vote on Monday, has already called for a future-looking Australia “that is agile, that is innovative, that is creative” in comments that encouraged business leaders, who count Turnbull as one of their own.
“For Australia to take advantage of the big shifts in the global economy, our government needs to act like our most innovative businesses,” Turnbull said Friday after meeting with central bank chief Glenn Stevens.
“More than anything, we must not be afraid to do things that are new,” he said in comments posted, aptly enough, on his Facebook (NasdaqGS: FB – news) page.
Where deposed leader Abbott was seen as old-fashioned and deeply supportive of traditional industries such as coal mining, Turnbull in contrast is tech-savvy and open to disruptive technologies.
The new prime minister, who sports an Apple (NasdaqGS: AAPL – news) watch, is often spotted using his tablet and smartphone in parliament, in stark contrast to Abbott, who reportedly resigned the prime ministership by fax.
The Business Council of Australia has welcomed Turnbull’s new approach, noting his highlighting of critical themes they have been raising for some time, such as the importance of a growth agenda driven by innovation.
“With massive global forces of change upon us — from digital disruption, to ongoing economic volatility, to a shift in economic activity towards a rising Asia — now is an ideal time to re-energise Australia’s economic and social policy agenda,” president Catherine Livingstone said.
Although iron ore and coal are resources-dependent Australia’s largest exports, the business community has argued the economy must become more diversified and flexible to boost weak productivity and growth.
Reforms they say are pressing include an overhaul of the tax system, such as raising the Goods and Services Tax (GST), and more flexible workplace reforms to boost weak productivity.
Streamlining national bureaucracy to remove duplication between the federal and state administrations was another key reform, wrote Tony Shepherd, who led the National Commission of Audit — a body set up to identify government waste — in the Australian Financial Review.
– Missing piece in economic jigsaw –
Analysts for Morgan Stanley (Xetra: 885836 – news) said Australia also needed to support innovation in sectors outside housing, which is a key driver of growth as resources investment winds back from an unprecedented boom.
The non-mining sectors have struggled to fill the gap left by a fall in resources investment, with weak business confidence reflected in companies’ reluctance to spend.
Wages growth has been subdued, the jobless rate has hovered near a decade-high, while fears are growing about slowing growth in China, Australia’s largest trading partner and a leading commodities consumer.
“Business groups have been clamouring for reform and more focus on the economy, and Turnbull has promised to deliver,” JP Morgan’s chief economist for Australia, Stephen Walters said.
“This may help to fill the big missing piece in Australia’s economic jigsaw — corporate animal spirits and the lack of business investment spending.”
Companies focused on emerging technologies, such as the renewables sector, were also excited about Turnbull’s ascension, with peak body the Clean Energy Council chief Kane Thornton noting the industry “endured a challenging and frustrating period” under Abbott.
“The potential of this promising sector clearly aligns with the economic aspirations the new prime minister has outlined,” Thornton said.
“We anticipate a more supportive approach that will attract the multi-billion dollar private investment that the rest of the world is realising from renewable energy.”
