International Best Practice? Australia could do betterMar 17, 2023
A couple of decades ago the phrase international best practice seemed to be on the lips of just about every business leader, business and economics journalists and the odd politician.
In fact, much of it was a justification for various overseas study tours and traditional employer attempts to reduce wages and worsen working conditions.
It is probably impossible to ascertain what is best practice simply because of the vast differences in culture, economic organisation, governance and other areas. However, it is practical to examine where Australia stands in international rankings across areas of economic, social, legal and governance performance.
In February 2021 the Labor backbencher, Julian Hill, published a report Australia’s Global Performance: Falling Behind. In summary it said: “Australia is less productive, more unequal, more corrupt, less happy, more indebted, less affluent, and less trusting of public institutions than in 2013.”
“Australia was once a world leader in so many areas – economic growth, reform, democratic innovation, industrial relations, fairness, healthcare and education. While like any country we have had our faults and historic failures, successive governments and communities were committed to working together to make things better for all Australians….Australia is no longer a world leader but increasingly a world laggard,” the report said.
How much of a laggard is reflected in the rankings Julian Hill cited and it is a useful benchmark against which you can measure how Australia is doing under Labor in the years ahead.
But meanwhile there are lots of other simple comparisons which illustrate the current situation.
For instance, Norway’s Sovereign Wealth Fund has $1.3 trillion in assets. Australia’s Future Fund has $243.5 billion. Norway taxed its oil and gas producers to build its funds while we allowed them to invoice from tax havens and failed to put resource rent taxes in place.
While Singapore is obviously much smaller than us its public housing policies would be a model we could follow if we were serious about home affordability and housing all our people.
In Australia we can’t fund $7 million to save an important national digital resource, Trove, and our arts funding has been declining. Last year France allocated culture funding equivalent to $A6.86 billion. The UK spent the equivalent of $A793 million in the same year.
According to the Australian Government agency, Geoscience Australia, “we receive an average of 58 million PJ of solar radiation per year, approximately 10 000 times larger than its total energy consumption. However, Australia’s current use of solar energy is low with solar energy accounting for only about 0.1 per cent of Australia’s total primary energy consumption. The most common use of solar energy is solar thermal water heating. Solar PV systems play an important role in off-grid electricity generation in remote areas.”
We’re doing better on electricity generation 28% provided by winds, solar and hydro. But Germany gets 50% from those sources. It is also a country with a much deeper and broader manufacturing base than Australia.
On one of the key drivers of economic performance – productivity – it is also revealing that Australia is ranked 15th highest after Ireland, Luxembourg, Norway, Belgium, Denmark, the Netherlands, France, Sweden, Iceland and Finland. We are doing better than the UK, Italy and Spain but that’s hardly anything to boast about.
Since the election of the Albanese Government legislated for an Integrity Commission, we have crept up the Transparency International rankings after years of decline under Liberal Governments but are still outside the top 10 countries with the best records. We used to rank in the top 10 for integrity.
In terms of inequality we are doing better than countries such as Italy, Spain, Romania, Israel, the UK and the US. If it’s some consolation were also better than Bulgaria, Turkey, Mexico and Costa Rica.
Our managers are very well paid but according to the World Management Survey 2004-2022 we rank below the US, Japan, Germany, Sweden, Canada, Britain and France and above Singapore and Italy in terms of management performance.
We are also outside the top 10 in the world’s best education system rankings and our largesse for private schools is about as bad as the UK. Interestingly UK Labour Leader Keir Starmer is promising to end private (read public in the UK context) schools’ charitable status. The status was granted centuries ago when the aim was to enable poor young students to become priests. Now it is a gift to investment bankers, oligarchs and oil sheiks.
We are the world’s biggest producer of the minerals needed for the batteries which will transform energy consumption. But our battery production amounts to just $1.3 billion – a fraction of the production of the Netherlands and we are well behind the Indonesian drive to build nickel smelters and manufacture batteries.
Another top 10 we fail to make is the WIPO Global Innovation Index where we are ranked 23rd out of the 131 surveyed.
On corporate climate performance an AICD survey on how the ASX 200 rated in 2022 in terms of the 1.5C climate goal found that 45% of companies have a scope 1 and 2 net zero target; 9% of companies where scope 3 emissions are deemed applicable have set net zero targets; 31% fully disclose their scope 3 emissions and 21% report on some but not all; and, 44% reported total emissions are not covered by any zero target.
Currently Australia’s performance is like many school report cards of our yesteryears. Could do better! The Albanese Government is trying to do so but the country has a long way to go.