The Global Competitiveness Index released overnight by the World Economic Forum in Switzerland has awarded Australia a bare pass, leaving it in 19th place, down from 10th place two years ago.
The assessment complied from interviews with more than 11,000 business leaders worldwide finds Australia wanting in the fields of tax, regulations, infrastructure and education.
The quality of Australia’s maths and science education was ranked only 24th out of the 131 nations surveyed, our staff training 20th, and education spending 45th.
Our national savings rate was bettered by more than half of the nations surveyed, putting us in 73rd place, and our interest rate spread (a measure of the extent to which our lenders overcharge) was bettered by around half of the nations surveyed...
Australia’s budgetary performance, often touted by the Prime Minister as one of the best in the world was only the 38th best.
In other areas Australia’s performance was assessed to be well above par. Our internet use is the world’s 4th highest (although the proportion of Australian using broadband to access the internet is only the 30th highest).
Australia was also found to have the world’s fourth strongest auditing standards and to be the easiest place in the world to set up a business.
Our employment regulations were judged to be about the least rigid in the world, bettered by only 3 other countries, but paradoxically our wage setting structure was judged to be among the world’s most rigid, bettered by 86 countries.
Overall Australia was ranked and France, Belgium, Malaysia, and Ireland on global competitiveness, well down from the top rung of nations – the US, Switzerland, Denmark, Sweden and Germany.
The news came as pressure mounted on the Reserve Bank board to lift interest rates again at its meeting next Tuesday.
Building approvals figures released yesterday jumped by a surprise 6.8 per cent in September with home sales up 9.9 per cent, just one month after the Reserve Bank’s August interest rate hike.
The Chief Economist of the Housing Industry Association Harley Dale said the jumps suggested the industry was “more resilient to the rate rise than thought”.
Other figures released by the Reserve Bank yesterday showed private borrowing continuing to grow strongly with business borrowing now climbing at an annual rate of 23.3 per cent - an 18 year high.
Lending for housing slowed in September and personal lending actually fell as some borrowers paid off debts.
Futures trading late yesterday pushed up the market’s expectation of a Melbourne Cup day rate hike from 86 per cent to 90 per cent. The likelihood of a follow-up hike one month later doubled, jumping from 10 per cent to 20 per cent.