25 August 2022
This opinion was first printed in the the Australian Financial Review
Big things are happening in our economy, they are happening with a velocity that is without precedent and they are changing everything.
The shifts are seismic and exponential and they are impacting every industry and every aspect of our lives.
We are hurtling at pace towards a digital and decarbonised economy. These two big forces present us with opportunities to be seized and pitfalls to be avoided.
As we approach the upcoming Jobs and Skills Summit, we need to see the event as the launch, not the landing, of some much needed, deep thinking about the economy we want a decade from now and beyond.
The Summit is to be followed by a White Paper, which sounds a very dry and bureaucratic outcome for such a promising event. White Papers have become an increasingly rare occurrence, the most recent being the Foreign Policy White Paper in 2017.
Yet a White Paper process is an important tool in a government’s kit bag, it signals and shapes big changes and we should see this one as a golden opportunity to shape our collective future.
So the opportunity presented by this Summit, and the White Paper beyond it, is one of finding economic consensus and charting a sensible pathway which lifts the quality of life for all Australians. One which not only seizes every chance to grow wealth and prosperity, but one which reduces, rather than increases, inequality. Not an easy task.
On the digital front, connectivity, data analytics, artificial intelligence, the internet of things, nanotechnology, robotics, quantum computing, biotechnology and, importantly, the increasing fusion of these developments, along with countless others, offer boundless opportunities.
As Australians, we are enthusiastic early adopters. We see this in banking every day.
In June 2021, 92% of Australians conducted a banking activity online up from 86% in May 2019 with an increase among all Australians, regardless of age or location. In March 2022, 39% of Australians with smartphones reported making a payment with a digital wallet, up from 18% just three years earlier.
However, our enthusiasm for the adoption of the new is not always matched with an appetite to retire the old.
We hang on to legacy systems. We currently operate a number of payment systems. The New Payments Platform, a multibillion investment by banks and the RBA has given Australia state of the art payments infrastructure. It runs alongside the Bulk Electronic Clearing System (BECS) with no trajectory for consolidation. We now lag our kiwi counterparts and many other countries in retiring cheques.
Our payments system is a major artery running through every part of the economy, facilitating millions of transactions every second, creating rich minefields of data, securing a safe cyber eco-system and driving financial and commercial innovation.
We need a comprehensive roadmap for the next evolution of the nation’s payment system to provide clarity to the community and certainty to investors and innovators.
As the economy digitises and decarbonises at pace, we will need to ensure our people have the right skills to harness the opportunities ahead.
The changing face of the banking workforce is just one measure of a broader trend across the economy. Rapidly increasing demand for digital and ICT jobs in banks over the past five years means that Australia’s finance industry now employ more professionals such as coders, data analysts and software engineers than clerical workers such as tellers and retail branch staff. This trend is only set to grow, with one major bank now onboarding more than 100 engineers every month.
Similarly, the shift to a low carbon economy is driving demand for new and more skills in alternative energy.
In the European Union it has been estimated that there will need to be enough skilled workers to install 3,000 solar panels, 1,000 electrical vehicles’ recharging points and 15,000 heat pumps on a daily basis.
As banks and investors contemplate funding the major energy projects we need, they need confidence that the skills are there to underpin the project.
Every day banks are hearing from businesses looking to grow and expand which are held back by labour and skills shortages. We need to tackle this head on, with new and better skilled migration programs that have paths to permanency, and lure backpackers and students.
But industry also has a big role to play in training and reskilling our existing workforce along with the next generation of Australian workers. The White Paper needs to delve deeply into the interface between the education and training sectors and the workplace.
As we tackle the skills challenge, there is an equal regulatory challenge. Even our most highly skilled workers can only perform to their best in an environment where the regulatory framework is fit for purpose.
Our new energy projects will need faster and more agile approval processes. Our housing and development approval processes will need to accelerate to house new workers and families as we import more labour. Our prudential regulations will need to be more nimble to move fast and incentivise the investment and lending that we will need to successfully transition to a new economy.
The summit will be a compelling conversation. However, the White Paper is likely to be the main game.
It can build on the contribution of business, industry, unions, academic experts, NGOs and the broader community to shape Australia’s future. Our quality of life, our global competitiveness and our social cohesion depend on it.
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