Australia is facing its most challenging set of economic circumstances in a generation and needs policy reform to remain globally competitive, a CEDA audience has heard in Brisbane.
Aurizon Managing Director and Chief Executive Officer, Lance Hockridge said Australia's uncertain political environment is undermining investment and business confidence.
While the domestic economy is slowing, Mr Hockridge said the economic outlook for Australia remains strong.
"The world has changed but whilst it has slowed it has certainly not stopped," he said.
"We at Aurizon continue to have deeply held belief in the sustainable medium and long term demand for Australian resources."
Mr Hockridge said he agrees with statements made by the Treasury Secretary Martin Parkinson that the "broken and bust" mentality of some commenters is bordering on hysteria.
But Mr Hockridge also said Australia needs serious reform to remain competitive in the global market as it faces increased competition from emerging countries such as Indonesia and Mozambique.
"The reality is that Australia is now a high cost nation in which to do business," he said.
"Therefore reducing the cost of doing business should be a searing priority for governments, business and unions in our nation."
Governments should also provide strong policy framework for businesses in order to drive competitiveness and ensure outcomes are market driven, Mr Hockridge said.
Mr Hockridge criticised key government initiatives, especially the carbon tax which he said is an example of exactly how not to introduce new policy. The road industry was given a tax break upon its introduction but the carbon tax had a negative and costly impact on rail, he said.
"Good policy would provide a level playing field and let the most efficient outcome prevail. This bad policy is having the effect of putting even more cars and trucks on our roads," he said.
Further barriers to business productivity and cost effectiveness also exist in areas such as transport infrastructure and cost efficiency.
Mr Hockridge said state barriers such as the fact that Australia has no national rail regulator are major problems for transport infrastructure and businesses.
"The role of government therefore is to create the policy environment that removes barriers and incentivises infrastructure investment and then lets business get on with it," he said.
"The challenge before us therefore is a collective one, it is the responsibility that should be shared by business leaders and policy makers alike."