Regular readers of “The Conversation” will have probably seen the coverage of the speech delivered by Dr Ken Henry to the Australian Conference of Economists at Victoria University, Melbourne published on 12 July 2012. In this speech Dr Henry, who is a Special Advisor to the Prime Minister, observed that Australia’s two-speed economy was an almost inevitable consequence of the mining and resources boom.
His analysis was particularly gloomy for those industries that are not engaged in the resources sector and are seeking to compete within international markets. This includes many of our manufacturers and services businesses. A particularly telling quote in relation to what measures might be taken to help salvage these sectors was:
But there is simply no feasible set of such adjustments that would reverse all, or even a large proportion, of the loss of international competitiveness that is presently being experienced by Australia’s trade exposed non-resources industries. The shock to resources prices has simply been so large that a considerable structural adjustment, including a reallocation of labour, is required. It will happen.”
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