This report from KPMG identifies eight areas of reform for consideration and presents a realistic but also optimistic view that, building on the success of the National Reform Summit, a new reform program can be formulated and legislated.
Australia has achieved an impressive 25 years of recession-free economic growth. Consumer sentiment is positive and the outlook for economic growth is encouraging, but government and household debt are very high and non-mining private investment is flat. Despite ongoing economic growth, average Australian incomes have declined every year since the end of the mining boom.
Productivity growth, which has accounted for more than four fifths of the improvement in our living standards over the past four decades, is in the doldrums. And our population is ageing – a social positive but also a handbrake on growth.
Without appropriate policy responses, the ageing of the population will cause a transfer of wealth from future generations to the present through the accumulation of public debt and the exclusion of many aspiring first homebuyers from the market. In the absence of further reform, living standards, when they do recover, will grow slowly by Australia’s historical standards. Moreover, Australia will be highly vulnerable to external economic crises and to a prolonged period of slow global growth – something which seems increasingly likely.
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