I have just returned from the US, where Australia is widely perceived as a strong economic player: think of US Federal Reserve Chairman Jay Powell’s
quip six months ago, “Business cycles don’t last forever, unless you’re Australia,” or the New York Times Business cover-story in April, “What the Rest of the World Can Learn from the Australian Economic Miracle”. However, back here at home, I get the sense that many people feel our economic miracle is looking a bit tired. Growth is grinding along at a rate that barely matches population expansion – and cannot reverse rising unemployment.
This month, I attended the RBA Dinner in Sydney where Governor Philip Lowe announced a rate cut for the first time in almost three years, reducing the cash rate to a record low 1.25%, and leaving the door open for a follow-up rate cut later this year. The Governor said that the economic outlook for
Australia is still “reasonable” but people needed to recognise that there are limitations on what monetary policy can achieve. He urged the government to do more to boost business investment and job creation, specifically: fiscal support for infrastructure spending and structural policies that “support firms expanding, investing, innovating and employing people”. Innovation is another lever for
growth that was raised at the dinner, by Bill Ferris, former head of Innovation Science Australia. One of the proposals he advocated in the innovation review he undertook for the Turnbull government that he thinks is worth revisiting is a collaboration premium in the R&D tax incentive to encourage increased engagement between companies and universities to better commercialise research. As you may be aware, Australia ranks near the top of countries worldwide for the excellence of our research, but near the bottom among OECD countries for commercialising that innovation.
And that takes me to my trip to the US. I was in San Francisco scoping out some of the companies we will visit with our Innovation Delegation in October. I met with some visionary people who are truly changing the way the world works. I looked at innovators in cybersecurity, aerospace, transport, e-sports, sustainability, AI and robotics. I’m very much looking forward to this mission, as are our delegation leaders,
Robyn Denholm, Chairman of Tesla, and Maureen Dougherty, President of Boeing Australia and Chairman of AmCham. If you haven’t already submitted an expression of interest, please do so this week. Our delegation will be selected very soon.
Speaking of delegations, I was delighted to be joined by several Australian business leaders to attend SelectUSA this year, including representatives from some of Australia’s industry superannuation funds, as well as leaders of Australian companies who have either recently entered the U.S. market or those who are planning to open offices in the near future. Darren
Bonney, CEO of Melbourne-based freight management solutions company MyFreight, took the opportunity of the Summit to announce Colorado as the base for their growing U.S. operations. There were many opportunities to engage with senior U.S. policymakers, many of the agencies who make decisions related to foreign investment, as well as the states, territories and economic development regions that are looking to attract investment from overseas.
I’m looking forward to seeing many of you at our July 4th celebrations. Meantime, thank you for your ongoing support.
April Palmerlee, Chief Executive Officer
American Chamber of Commerce in Australia
P 02 8031 9000