Australia has a proud history of leading the world in the design and implementation of policies that create the conditions for economic prosperity.
Continued economic reform will be critical to our ability to prosper. The Treasury will need to continue to pursue its purpose against an ever-changing operating environment.
The Australian economy's transition from the resources boom to broader-based growth is continuing. This transition has been slower than hoped and economic activity has recorded below‑trend growth rates for a number of years, which has resulted in a gradual rise in the unemployment rate. If Australia is to sustain the rate of improvement in national living standards that we have experienced over the past two decades, key priorities must be to restore fiscal sustainability, boost workforce participation and raise productivity growth.
An efficient and effective tax system is important in supporting economic growth and generating necessary government revenue. Australia's tax system, including its heavy reliance on personal and corporate income taxes, imposes significant economic costs. The tax system also faces challenges from technological change and globalisation. The Tax White Paper, to be released before the next election, provides a key opportunity to improve the international competitiveness and sustainability of our tax system.
Effective competition in our economy is a key part of its strength and dynamism. Competitive markets benefit consumers by putting downward pressure on prices, driving innovation and investment in new technologies and the development of new products and quality services that meet the needs of consumers. The Harper Review made wide-ranging recommendations to overhaul competition laws, practices and institutions to foster greater competition and so enhance the productivity of the Australian economy.
A strong financial system is important for sustaining a resilient and growing economy. The opening of the financial system to international participants dramatically improved access to and competition in the provision of financial services. Sound regulatory frameworks helped Australia weather the global financial crisis better than our international peers. The Financial System Inquiry provides recommendations to improve the efficiency, resilience and fairness of Australia's financial system.
The Treasury will continue to advise the Government and support the implementation of policies in these and other areas to support Australia's long-term growth and prosperity.