Australia’s economic growth has stagnated in recent months, hitting a record low since the global financial crisis. The country registered a growth rate of only 0.5% in the second quarter of 2019, leaving many to wonder how Australia could turn the corner and bring about a new period of economic success.
Despite the concern surrounding Australia’s sluggish economic performance, Prime Minister Scott Morrison dismissed the idea that alarm bells are warranted. “Let’s remember, Germany just had a negative quarter of growth, the UK just had a negative quarter of growth, he said. “Australia hasn’t.”
In order to strengthen the economy, Morrison’s government is currently relying on a number of measures. These include tax reimbursements and lower interest rates, along with plans for new trade agreements, an ambitious infrastructure project with a price tag of $100 billion, as well as public funding for skills training.
There has indeed been positive speculation surrounding GDP growth in the future, given the low interest rates and other key factors. Yet it still remains to be seen whether the anticipated improvement will occur by the end of this year – or even next year.
Amid this uncertainty, as Australia struggles to find new ways of boosting its economic growth, some are proposing solutions from areas of the economy that have been relatively neglected until now. Instead of government-imposed solutions, such as increased incentives or changes in monetary policy, sources of real growth may already exist, waiting to be utilised.
Australia’s reserve of untapped human resources
A report from Deloitte Access Economics claims that more social inclusion of minorities could add $12.7 billion annually to the economy.
The report states that businesses can benefit from social inclusion in a variety of ways. “Diversity can be a source of creativity and innovation, lifting productivity,” it says. “Social inclusion can also lift profitability and help target market segments.”
“Social inclusion harnesses our diversity as a fuel for small business formation, creativity and innovation,” the report continues. “Around one-third of small businesses in Australia, representing 1.41 million employees, are run by migrants to Australia, 83% of whom did not own a business before coming to Australia.”
According to the report, around $5 billion out of the $12.7 billion could come from improved workplaces where social inclusion would have a positive effect on the creativity and productivity of workers, while the Gross Domestic Product (GDP) in the labour market could also be boosted by about $1.2 billion due to increased employment. Improved health outcomes would account for the remaining $6.5 billion.
If minorities face fewer discrimination-based setbacks, the report says, their job-seeking capability will increase, and they will be motivated to work longer hours when they do find jobs.
The report also adds that social inclusion can nullify isolation and stimulate involvement in the community, which helps relieve health issues, particularly mental health issues such as depression and anxiety.
Human resources are a critical contributor to the economic growth of a country. While Australia has a variety of ethnicities, the country’s population as a whole is relatively low in comparison to its Asian neighbours. It is therefore important for the country to make the most out of this valuable human resource, and social inclusion can play a large part in unlocking this added potential. Over six million Australian citizens and residents – equal to 26 percent of the total population – were born outside the country.