- How much risk we should expect government to regulate?
- How policy makers can provide equality of opportunity?
- What impact these decisions are likely to have on growth?
Key mega trends shaping Australia’s future include: the growth of Asia, technology, the ageing population and urbanisation. The impact of trends, such as the ageing population, are easier to predict than others, eg technology. Some trends, such as urbanisation, are also easier for government policy to influence than others. Business and community have an important role in preparing the nation for the future, we can’t just sit back and wait for the government to sort it out.
How will our approach to risk and equity influence the future prospects of a nation?
Balancing risk and return is well understood when it comes to the financial markets, but are we becoming too risk averse as a society? Do we expect government to risk and what impact is this having on innovation and growth? We need to move away from risk avoidance and become risk-wise. Policymakers should measure aggregate risks and assign them to those best placed to manage them.
Equity is a far more emotional concept but is also hard to measure. There is an important distinction between equity and equality. Whereas equality is around equal outcomes, equity can be better thought of as equal opportunities. Inequality can create greater social tension, which in turn can hinder economic growth. Policies that deal with equality of opportunities are the best starting point, especially those aimed at increasing participation in the workforce. This provides the dual benefits of increasing the size of the pie for everyone as well as the slice to those who currently have less. Education is a critical part of the solution to equity, particularly in early childhood.
To maximise growth and welfare for all, we’ll need strong leadership from government, business and society. Everyone has a role to play.