The Gillard Government is setting an ambitious goal for Australia in the Asian Century White Paper of breaking into the world's top ten in GDP per person by 2025, with a nation-wide effort to boost our productivity growth.
Achieving this goal would mean that Australia's real income per person could rise to around $73,000 by 2025 from $62,000 in 2011.
Since the Labor Government came to office Australia has moved up four places in the world rankings to 13th by this measure, reflecting our community's hard work and resilience in the face of the worst global economic turbulence in three quarters of a century.
We cannot take these gains for granted, and while we are already a highly productive economy by world standards, reaching the top ten will require a sustained and concerted effort to lift our productivity growth.
Together, the objectives and pathways in the White Paper provide a roadmap for Australia to achieve this ambitious productivity goal.
An important part of this will be lifting our productivity performance at home, irrespective of exactly how the Asian century evolves.
That is why the Government will progress domestic reforms and investments across five pillars of productivity: skills and education, innovation, infrastructure, tax, and regulation.
This will lay the building blocks for Australia to achieve this ambitious productivity goal, and will help Australia make enormous advances in the Asian century.
Achieving this ambitious productivity goal will also hinge on our engagement and integration with the region, and cannot be achieved by the Government alone. Australia will need governments at all levels, business and the broader community to pull together over many years in order lift Australia's productivity and prosperity.
Skills and education
Investing in the skills and education of the Australian community has been absolutely core business for the Gillard Labor Government, with this focus set to intensify as we set about reaching the ambitious goals set out in the Australia in the Asian Century White Paper.
Strong increases in funding from early childhood to higher education are giving our students the best chance to excel and seize the opportunities of the Asian century.
We will deliver $5.3 billion in additional funding for universities for the period 2010-2015 and the $1.75 billion skills National Partnership to improve access, responsiveness and quality in the VET sector. The White Paper sets out the importance of all Australians improving their knowledge of Asia through the education and skills sectors. That is why Asia-literacy will be a core requirement in new educations reforms being negotiated under the National Plan for School Improvement.
As we continue on our reform path, we will ensure Australia's school systems will be in the top five schooling systems in the world, and our universities and training systems will be among the world's best.
Innovation
The White Paper sets out that we must strive to find better ways of doing business, develop new business models and create new and improved products.
This will be a primary driver of the improvements in productivity and competitiveness needed for Australia to take advantage of opportunities afforded by the Asian century.
Our vision is for Australia to have an innovation system that is in the top ten globally. To achieve this it must support dynamism in business with a creative problem solving culture. Our innovation system must also boost our evolving areas of strength to attract top researchers, companies and global partnerships.
Since coming into office in 2007, this Government has increased support for science, research and innovation by 35 per cent to $8.9 billion.
We have improved support to innovating businesses through the new R&D Tax Incentive and the introduction of Commercialisation Australia as well as increasing funding for university research by 44 per cent.
We are helping firms take advantage of the clean energy future by investing through the Clean Energy Finance Corporation and the Clean Technology Programs.
Infrastructure
The White Paper acknowledges the central role that high quality and coordinated infrastructure plays in improving our productivity.
This Government has a proud record of investing in Australia's nationally significant infrastructure to lift our productive capacity while lowering costs for business. We are investing over $36 billion in roads, rail and ports over the six years to 2013‑14, as part of our Nation Building programs.
Infrastructure Australia was established as one of the first acts of this Government to help better target the allocation of infrastructure spending towards the right projects and drive the development of a long-term, coordinated national approach to planning and investment.
The Gillard Government will put in place measures to ensure better planning and prioritisation of infrastructure, and greater private sector investment, to support a growing Australian population and increasing trade and investment with the Asian region.
This means implementing a systematic national framework, including preparing 20‑year infrastructure strategies, in conjunction with States and Territories, to identify specific transport and infrastructure priorities.
Tax reform
Ongoing tax reform is a critical way that we can continue to boost our nation's productivity.
The White Paper points out that tax reform which promotes new investment and sensible risks helps to encourage innovation and boost productivity.
The Government has rolled out a number of tax reform initiatives that boost productivity, including simpler and more generous depreciation arrangements for small business, loss carry-back, and an infrastructure tax incentive.
We will continue to explore ways to boost productivity through business tax reform that can be funded from within the business tax system.
The Government has now implemented or is implementing some 40 tax reforms which advance recommendations of the Australia's Future Tax System Review.
We are tripling the tax-free threshold from $6,000 to $18,200 to encourage workforce participation.
We have ensured the retirement income system is well placed to respond to the opportunities and challenges presented by an ageing population, by gradually increasing the Age Pension qualifying age from 65 to 67.
We are progressively increasing the Superannuation Guarantee from 9 to 12 per cent, abolishing its maximum age limit, and making the tax concessions provided for superannuation contributions fairer for both low and very high income earners.
We have also reformed inefficient tax concessions, such as the fringe benefits tax treatment of cars, living-away-from-home allowances and benefits, and 'in-house' fringe benefits, and also the tax offsets provided for golden handshakes and dependent spouses.
As well as improving the efficiency of the tax system, these decisions also improve the long-term position of the budget and make room for productivity enhancing investments like the National Plan for School improvement.
Regulatory reform
By 2025, Australia will strive to be among the most efficiently regulated countries in the world, increasing Australia's attractiveness for foreign investors.
The Government already has a strong record of undertaking regulatory reform to enhance productivity, improve competition and lower costs for business.
Specifically, Australia should aspire to reach the top five for ease of doing business. To achieve this goal, development of a new round of regulatory and competition reform is already underway through the Council of Australian Governments and its Business Advisory Forum.
This will build on the significant achievements to date through the Seamless National Economy reforms to regulation and competition, which are delivering long-term benefits for the Australian economy.
The productivity challenge
In order to achieve this ambitious productivity target and continued prosperity, everyone will need to play their part.
Through these five pillars, the Government will continue to play its part in setting a framework to support business and the community to take on these challenges.
It's vital we step up the pace in building the capabilities that will ensure our entire nation can capitalise on the immense opportunities of the Asian century.
Our greatest responsibility is to invest in our people through education, to nurture a highly skilled workforce and to put opportunities within reach of all Australians.
The Gillard Government is committed to continuing the hard work of reform to build Australia's capabilities and facilitate productivity growth so that Australians can seize the opportunities and navigate the challenges of the Asian century.