Australian economy must come 'out of ICU': Scott Morrison

Scott Morrison says it is vital to get the Australian economy “out of ICU” and “off the medication” of government support “before it becomes too accustomed to it”.

In speech on his government’s plans to reset economic growth over the next three to five years, Morrison says, “We must enable our businesses to earn our way out of this crisis.

"That means focusing on the things that can make our businesses go faster.”

Part of the address, to the National Press Club, has been released ahead of its Tuesday delivery.

Morrison’s strong emphasis on business leading the recovery further sets up the contrast with Anthony Albanese, who has outlined an agenda placing much more stress on the role of government.

The Prime Minister outlines principles that will guide the pursuit of a “JobMaker plan for a new generation of economic success”.

This speech deals with skills and training – flagging extra federal resources would be available for a better system - and with industrial relations (although the IR section hasn’t been released). Morrison has previously flagged he would like a compact involving employers and unions to promote change.

Areas including tax reform, deregulation, energy and federation will be addressed later.

Morrison says the reset’s overwhelming priority “will be to win the battle for jobs”, with the October budget important in this.

He paints a dark background against which the budget will be framed, including “an historic deficit”, debt above 30% of GDP, unemployment about 10% and global trade expected to fall by up to a third.

Five principles will guide the JobMaker plan.

First, Australia will “remain an outward-looking, open and sovereign trading economy”, that won’t “retreat into the downward spiral of protectionism” - but also won’t trade away its values for short term gain.

The second principle “is caring for country, a principle that indigenous Australians have practiced for tens of thousands of years”.

This involves “responsible management and stewardship of what has been left to us to sustainably manage for current and future generations. We must not borrow from future generations what we cannot return to them.

"This is as much true for our environmental, cultural and natural resources as it for our economic and financial ones. Governments must live with their means, to not impose impossible debt burdens on future generations.”

The third principle is leveraging and building on strengths.

These include “an educated and highly-skilled workforce that supports not just a thriving and innovative services sector, but a modern and competitive advanced manufacturing sector.

"Resources and agricultural sectors that can both fuel and feed large global populations, including our own and support vibrant rural and regional communities. A financial system that has proved to be one of the most stable and resilient in the world.

"World leading scientists, medical specialists, researchers and technologists. An emerging space sector.”

Fourthly, “ we must always ensure that there is the opportunity in Australia for those who have a go, to get a go”.

Under this falls “access to essential services, incentive for effort and respect for the principles of mutual obligation. All translated into policies that seek not to punish those who have success, but devise ways for others to achieve it.”

And fifthly is “doing what makes the boat go faster”.

“To strengthen and grow our economy, the boats we need to go faster are the hundreds of thousands of small, medium and large businesses that make up our economy and create the value upon which everything else depends.”

To go faster, businesses need skilled labour, affordable and reliable energy, research and technology they can use, investment capital and finance, markets, and economic infrastructure.

Also relevant are the amount of government regulation they must comply with, and the level and efficiency of the taxes they have to pay, in particular whether these encourage them to invest and employ people.

Morrison says changing the skills and training system will be a priority, to better prepare people for the jobs businesses will create.

Present arrangements are too clunky and unresponsive, he says. Clear information is lacking about the skills needed now and in the future, so the right training and funding can be provided. There are inconsistencies and incoherence in the funding arrangements, with little accountability back to outcomes.

Changes are required to:

• better link funding to forward looking skills businesses need

• simplify the system, with greater consistency between jurisdictions and between VET and higher education

• increase the transparency of funding and the monitoring of performance

• better coordinate the subsidies, loans and other funding sources, to make the most of the support provided.

“Our national hospital agreement provides a good model for the changes we need to make. Incorporating national efficient pricing for training and activity based funding models would be a real step forward,” Morrison says.

“That is a system my government would be prepared to invest more in.”