The former Treasury Secretary, Ken Henry, encouraged Australian businesses to have an open mind for offshoring to help them survive the current economic and commercial global environment. By sourcing more of the products from overseas, he said the businesses - especially those in the manufacturing sector - would offset the squeeze they experience from the mining boom.
"It's no exaggeration to say that if Australia's going to navigate successfully the structural adjustment to the terms-of-trade shock presented by the extraordinary growth of China and other countries in the region, a new mindset would be required," The Age quoted the former official.
Mr Henry said the impact of the mining boom on manufacturers is inevitable. He added the new mindset could also benefit the federal government as it steers the country to adjust to structural economic changes that arise from the mining boom and terms of trade.
He specifically pointed to initiatives that target more efficient usage of goods and services such as transport and logistics and likely beneficiaries of offshoring.
Mr Henry also debunked current thinking that productivity reforms alone would be sufficient to make enterprises outside the lucrative mining sector more competitive.
"I do not kid myself into thinking that this is somehow going to restore the level of international competitiveness in Australia's non-resources sector to where they were back in the year 2000.... It's about time people start figuring out how on earth they are going to adapt to this change," Mr Henry said at the Australian Conference of Economics held in Melbourne this week.
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