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Australia 'hopeless' if it can't find opportunity in Asia's middle class, Ken Henry says

Thursday, 8 Dec 2016 17:43:09 | Thuy Ong

Former treasury secretary Dr Ken Henry listens at the Henry Tax review forum at the Australian National University in Canberra, Monday, July 16, 2012. (AAP: Alan Porritt (file photo))

Australia would be "hopeless" if it can't make the most of a burgeoning middle class in Asia over the next 20 years, says Dr Ken Henry, a NAB chairman and former advisor to Julia Gillard.

Dr Henry made the comments at a function hosted by the Australia-Israel Chamber of Commerce, where ANZ chairman David Gonski also spoke.

Both speakers signalled to the future of jobs creation and how the Asian region would increasingly become more important to Australia as its middle class population grows.

"Over the next 20 years the number of middle class in Asia growing to 3.2 billion people more than 100 times than there are in our [country.] If we can't make opportunity we're hopeless. [There is a] need to invest in education and in skills," Dr Henry said.

The talk covered challenges in 2016 and expectations for 2017, and Mr Gonski said Australia would have to rise to challenges as the economy transitions away from mining.

"The days of being able to rely on the fact that there is minerals in those hills and that we're strong and we're wonderful are gone," he said.

"The things we could do with this wonderful opportunity are now a need."

Mr Gonski pointed to Israel's booming start-up sector, something that was born out of a need, as Israel does not have the resources Australia does, and has a smaller comparative population.

Both men also pointed to a recent global report that found Australian 15-year-olds were getting worse at science, maths and reading.

"Of course there's a threat... it's a threat to Australian living standards of course that's true," Dr Henry said.

"[We need] a population that is equipped with the right skills, appropriately educated across the spectrum of skills acquisition. It's a story of unprecedented opportunity."

Leadership a 'lost art'

The talk also covered the past year, with Dr Henry saying the governments of the world have lost the art of leadership.

"I don't think we are [seeing it now]," he said.

"This is not a point directed at Australia's government particularly, at all, I think that in the industrialised world, it's generally the case that people that we have entrusted with national leadership responsibilities have lost the art.

"If politicians are consumed by the importance of winning the battle every hour, they're not going to be focused on the long-term issues."

The comments come after a tumultuous 2016 saw disenchanted voters in Britain vote to exit the European Union, and Donald Trump clinching the US election in November in a shock victory many analysts and pollsters had not anticipated.

Dr Henry said that was also a result of people in society trusting their own networks than the institutions that have been built up over centuries.

"They are less likely to trust politicians than what they read on social media. Why is that? We need to ask ourselves this question," he sai

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