The release of the fifth Intergenerational Report today paints a sobering picture of Australia's future, as the nation continues to struggle from the widespread and protracted impacts of the coronavirus pandemic.
The report identifies three concerning trends for the economy:
- Australia's population is expected to grow slower and age faster;
- While the economy will continue to grow, these gains will be less than previously estimated;
- Finances will remain in the red for decades to come, with the aging population driving down government revenue and increasing expenditure.
"Australia's future prosperity is at risk unless governments make bold, productivity-enhancing policy commitments," Chief Economist Dr Ross Lambie said.
"While these trajectories point to a deteriorating economy into the second half of the century, the report concomitantly indicates the need for Australia to embark on large-scale reforms. Without ambition for an agile and innovative economic future, we put at risk the living standards that Australians enjoy.
"The Intergenerational Report makes it clear, we have become too complacent about our prosperity. As a matter of urgency, the Government must act immediately to implement productivity enhancing supply-side reforms that enable the economy to grow faster and stronger.
"Over coming decades there will be significant challenges to simply maintain, let alone improve on, the economic growth and broader wellbeing needed to secure national prosperity and the way of life we are all accustomed to.
"Policy makers can't just tinker around the edges of reform if Australia wants to substantially improve our productivity in a post-COVID world. We have a once-in-a-generation opportunity to implement visionary reforms that can underpin our future prosperity for generations to come.
"It is therefore incumbent on all levels of government – Federal, State and Local – to take up the economic reform challenges posed by this Report. Timing is of the essence in getting a comprehensive action plan developed in response," Dr Lambie said.
"Unfortunately, there is no silver bullet here. A sustained commitment to policies across the suite of policy areas is required so that the economy has the dynamism, resilience and competitiveness to deliver the sustainable economic growth we need. Only then can we lay the foundations for a prosperous and resilient Australian future."
