High taxes and an “inefficient” labour market are impacting Australia’s competitiveness on the global stage, according to Fiducian.
The country’s deteriorating competitiveness is evidenced by the contraction in the economy – the first seen in Australia in five years – said Fiducian investment manager Conrad Burge.
“The country’s international competitiveness has been eroded in recent years by a move back towards an inefficient, union-dominated labour market in some sectors, relatively high corporate tax rates and over-regulation that has pushed up costs, while a stubbornly high currency may require further reductions in official interest rates,” he said.
Fiducian noted the Australian share market, like those in the UK and Japan, had fallen by just under 1 per cent through January, with data from the ASX showing a 0.8 per cent decline in the value of the All Ordinaries Index.
The ASX’s activity report for January also said expected future volatility, measured by the S&P/ASX 200 VIX, rose from an average of 11.0 per cent to 13.1 per cent.