June 15, 2014

Australia’s Standard of Living to Drop 8 Percent by 2030, According to Accenture

Unless government acts to develop jobs and skills that address changing labor market

CANBERRA; June 15, 2014 – Australia’s standard of living, defined as real GDP per capita, is in danger of declining by as much as 8 percent over the next 15 years unless the government addresses structural changes in the post-mining economy, the dislocation of jobs in several key industries, the employment skills gap and an aging workforce, according to a new report by Accenture (NYSE:ACN).

The Accenture report, For Richer, For Poorer? Government’s Role in Preserving Standard of Living, suggests that changing demographics are responsible for several challenges straining the financial and human resources used to measure standard of living. As outlined in the report, workforce participation would need to increase by .31 percent per year, and productivity growth would need to climb .4 percent annually to simply maintain the current standard of living by 2030 (see chart below). Yet, according to the Australian Bureau of Statistics, the proportion of employed working age adults has decreased by .7 percent over the last two years.1

“To its credit, the Australian government has recognized the challenges in the labor market, and has undertaken policy initiatives, such as the Core Skills for Work Development Framework2 and the National Workforce Development Strategy3, to address these issues,” said Catherine Garner, who leads Accenture’s Health & Public Service work in Australia. “But, as we continue to face declining productivity growth and a shrinking demographic workforce, we need to continue to build on these efforts by taking concerted and decisive actions.”

Key Survey Findings: Citizens, Jobseekers, Employers and Public Employment Service Officials
Accenture also surveyed citizens, employers, jobseekers and public employment service officials and found growing dissatisfaction with government:

Accenture research and independent studies show that Australia faces four major challenges in addressing the threat to standard of living:

Achieving World Class Labor Markets
According to the report, government leaders who can create world-class labor markets will help reverse declining standards of living. A new comprehensive approach is needed to address Australia’s labor market challenges and deliver a more vibrant jobs and skills environment. Specifically, government and business leaders need to be:

“High performing labor markets can be defined as those with the flexibility to rapidly adapt to the inherently dynamic nature of business cycles. A government that shifts from a public management to public entrepreneurship model will be better positioned to adjust to new demands,” Garner added.

Accenture analyzed trends related to demographics, workforce participation rates and productivity in 162 countries. Together, these factors add up to gross domestic product (GDP) per capita, used as the measure of standard of living. Given that most countries’ long-term productivity growth rate is trending toward zero percent, the base scenario assumes that productivity and participation growth rate is maintained at zero. Accenture estimates that in the sample of countries studied, standard of living – defined as real GDP per capita – is set to fall between 4 percent and 12 percent by 2030. Accenture also conducted surveys with citizens, employers, jobseekers and public employment officials in 11 countries (Australia, Brazil, Canada, France, Germany, India, Italy, Japan, Singapore, the United Kingdom and the United States), with additional interviews in 12 U.S. states (California, Florida, Illinois, Indiana, Massachusetts, Michigan, Minnesota, New York, North Carolina, Ohio, Texas and Washington) and the Canadian province of Ontario. These surveys provide a comprehensive view on the jobs and skills environment. Ipsos Mori and MGuire Research Services executed the surveys between September and November 2013.

Accenture’s 2012 flagship study, Navigating the Shifts7 identified four profound structural shifts—moving from standardized to personalized services, reactive to insight driven, public management to public entrepreneurship, and piecemeal efficiency to mission productivity. Organizations doing this are delivering public service for the future—supporting a flourishing society, safe and secure nation and economic vitality for citizens.

Learn more about Delivering Public Service for the Future.

About Accenture
Accenture is a global management consulting, technology services and outsourcing company, with approximately 289,000 people serving clients in more than 120 countries. Combining unparalleled experience, comprehensive capabilities across all industries and business functions, and extensive research on the world’s most successful companies, Accenture
collaborates with clients to help them become high-performance businesses and governments. The company generated net revenues of US$28.6 billion for the fiscal year ended Aug. 31, 2013. Its home page is www.accenture.com.

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Georgia Hewett
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Joanne Veto
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Footnotes and Sources:
[1] Australia Bureau of Statistics - Labour Force, Australia, Apr 2014
2 “Core Skills for Work Development Framework, Commonwealth of Australia, 2013
3 National Workforce Development Strategy, Australian Workforce and Productivity Agency, July 2012
4 Australian Bureau of Statistics, Labour Force Commentary, February 2014, http://www.abs.gov.au/AUSSTATS/abs@.nsf/Previousproducts/6202.0Main%20Features2Feb%202014?opendocument&tabname=Summary&prodno=6202.0&issue=Feb%202014&num=&view=
5 Australia Department of Education, Employment and Workplace Relations, Skill Shortages Australia 2013, published 2014, http://docs.employment.gov.au/system/files/doc/other/skillshortagesaustralia2013.pdf\\ 6 Australian Bureau of Statistics, Towns of the mining boom, Australian Social Trends, April 2013,
7 Australian Government, Indigenous employment rates, 2008 and 2012/13, http://www.indigenous.gov.au/economic-participation/indigenous-employment-rates-2008-and-201213/