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Perth
I read transcript for a speech made by Phillip Lowe, the deputy governor of the RBA, a couple of months ago called "Demographics, productivity and Innovation" that I find is particularly relevant to this issue. The main issue that this speech addressed was how would Australia cope with it's ageing population, from a productivity perspective moving forward. During his speech, Lowe pointed out that as a society ages it inherently becomes more risk adverse at a cost to its productivity. Lowe was of the opinion that it would be critical to develop effective systems to support entrepreneurs to address this issue moving forward. Lowe made five recommendations for addressing these challenges: • The way in which we finance innovation, including the access to start-up capital for new businesses. The Financial Sector Inquiry will no doubt look at this issue. • The incentives for innovation that we establish through the tax system. • The way we support human capital accumulation and research. • Our business culture and the way we promote and support entrepreneurship. • The way in which we promote competition in our markets, for it is often competition, or the threat of it, that is the driver of innovation. I believe this speech outlines how important entrepreneurs (or people who are willing to take risks in the business environment) are at driving increases in productivity within a society through innovation. I don't need to spell out the fact that without productivity improvements a society with an ageing workforce can only go backwards. Therefore I find it particularly disturbing that in a budget that has apparently been designed to "protect our nations future", the government has chosen to slash funding in the area identified by one of our nations leading economists as being essential to addressing the challenges faced by our ageing society. It would appear that we should be investing more in finding ways to support these risk takers within our business environment as they are the ones driving the innovation essential for growth. I think that this issue reflects the overall pessimistic theme of the budget where the government is desperately looking for ways to save money, rather than supporting programs designed to drive new growth, to the great detriment of our country.