Australian Treasurer Chris Bowen on Thursday emphasized the challenges the Australian economy has been faced with and vowed to manage the economic transition by improving productivity and competitiveness.
In a speech at the National Press Club, an echo of Prime Minister Kevin Rudd's productivity agenda speech at the same location exactly a week ago, Bowen mentioned the challenges brought by a struggling economic recovery worldwide.
As for China, Australia's biggest trading partner, Bowen recognized China's effort to achieve a stable, long-term single digit growth by changing its development model.
He said the change in China may result in more volatility in prices for Australia's key commodity exports and therefore the country's terms of trade.
He said Australia is faced with two large and very important transitions in resources sector and non-resources sector. To make a smooth transition, the country needs to raise its productivity and competitiveness.
"Our challenge is to manage this transitional period. From the mining investment phase to the production phase, from resources investment to investment in services, manufacturing and clean energy," he said.
"To do this, productivity must be front and centre of Australia 's economic agenda. It is up to government to provide leadership and create the right conditions for businesses to innovate, improve and grow. Just as importantly, it's also up to business and unions to come together in partnership with government to take ownership of the reform agenda."
Bowen especially pointed out the potentials of the financial services sector, saying that there is a great opportunity for the financial services industry to become more outwardly focused.
"Encouraging competition and efficiency would improve the range and choice of financial products available to consumers and promote increased exports of financial services," he said.