In 1986, then-Treasurer Paul Keating warned Australia risked becoming a 'banana republic' without economic reform. Now, Treasurer Jim Chalmers faces a similar dilemma as productivity flatlines and the economy slows.
Australia's living standards have grown just 1.5% over the past decade, compared to an average of 22% across other rich nations, according to independent economist Chris Richardson. Analysts blame a slowdown in productivity growth, with the economy no more productive than in 2016.
Chalmers has convened a productivity roundtable in Canberra, but Prime Minister Anthony Albanese has ruled out new taxes this term. The treasurer has narrowed potential deliverables to regulatory reform for housing and a possible road user charge.
Economist Saul Eslake says there is no 'productivity crisis' and warns against rushed measures. 'There are no magic bullets,' he says, adding that lifting productivity growth requires long-term solutions.
Despite the lack of urgency, the roundtable follows six weeks of consultations, reflecting concerns that Australia's economic complacency could lead to a 21st-century version of Keating's warning.
