The realities facing Australia are much more dangerous than revealed to the electorate in May. We must recognise the need for policies that we now think impossible.
We are kidding ourselves about how well our economy is performing, absolutely and relative to other developed countries. True, for nearly three decades from 1991 we experienced the longest economic expansion unbroken by recession of any developed country, ever. That ended in the first half of 2020.
In the Dog Days from 2013 to the pandemic, productivity, wages and median incomes grew less than in other developed democracies. Unemployment moved from being well below to well above the US. We have to stop kidding ourselves about the budget. We need unquestionably strong public finances to have low cost of capital, private and public, for our superpower transformation, and to shield us from a disturbed international economy and geopolity.
The most recent Treasury intergenerational report update tells us that the ratio of over-65 to conventionally work-age population will rise by half over the next four decades, bringing higher costs and fewer workers to carry them.In the face of these immense budget challenges, total federal and state taxation revenue as a share of GDP is 5.7 per cent lower than the developed country average.was released four months ago, to inform the discussion of economic policy during the election campaign.
In this successful Australia, rising standards of living will rely less on regulated wages and more on fiscal transfers than in the past. These two reforms would increase the budget deficit in the short term, which fitted perfectly the fiscal expansion required during the pandemic recession. That opportunity has passed, but the longer term case for the changes is stronger than ever. After a while, increased labour force participation would claw back part, but not all, of the initial revenue loss from Australian Income Security.
Australia Latest News, Australia Headlines
Similar News:You can also read news stories similar to this one that we have collected from other news sources.
The PM has announced changes to the pandemic payment. Here’s what we knowThe mandatory isolation period for positive COVID-19 cases has been reduced from seven to five days - and the Pandemic Leave Disaster Payment will reduce too. 7NEWS
Read more »
German civil servants investigated over ‘spying for Russia’Officials linked to energy supply suspected of trying to obstruct economic policies, reports Die Zeit
Read more »
Meta is shutting down a popular Facebook product, affecting millions of users.facebook has made a surprise announcement, telling users it will shut down one of its streaming apps in just two months. 7NEWS
Read more »
‘Filial piety’: The Chinese cultural obligation the young are finding impossible to fulfilFor China's one-child policy generation, social pressure to care for their ageing parents is creating extreme anxiety and forcing some to forgo having children of their own.
Read more »
Why do we need to BeReal? Reality is depressingI saw the best minds of my generation, sitting on office chairs, wearing cardigans, toiling endlessly under the yoke of capitalism.
Read more »
Chalmers calls time on unfunded budget demandsClaimed economic dividends from policy proposals are no longer enough to justify the extra spending required, Jim Chalmers has conceded.
Read more »