MINING giant Rio Tinto’s Australian boss has warned Australia is at a “crossroads” and must engage in serious structural reform if it is to regain its competitiveness and prosperity.
Phil Edmands, managing director Australia, argued today that the alternative to structural reform was to decline into “mediocrity and obscurity”.
Outlining that Australia faces a serious fiscal challenge, Mr Edmands, in a speech in Canberra to mark Minerals Week, said that there was a gap between Commonwealth spending and tax receipts which, without action, will only get larger given Australia’s demographic challenges.
“Restraining expenditure is certainly a necessary part of the answer — but equally important is the need for a far more efficient, less complex and better targeted tax system,” he said in his first speech since taking over from David Peever in April.
Mr Edmands also attacked Australia’s high company tax rate, saying it remained above the OECD average, adding that Australia had been pushed out of the top 20 in the latest global competitiveness report from the World Economic Forum.
“Australia has long been known as the lucky country — and indeed in many respects it is. But that has bred complacency and blinded us to how quickly and completely our luck can run out,” he said.
Rio’s Australia boss added that there was only so long that the nation could rely on commodity returns to hide the fact that it is steadily losing ground to its competitors.
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