Twenty years ago, Australia’s embrace of sound economic reform, robust competition and fiscal prudence led to significant dividends for the community. We had a growth economy with record-low unemployment, inflation within the 2 — 3 per cent band, real wage gains, universal superannuation, a sovereign wealth fund and substantial tax reform. The high bar of fiscal policy was sustained budget surpluses that were sufficient to pay off Commonwealth debt. ‘Australian exceptionalism’ became a phrase used in the IMF. 

But during the course of the past 15 years, the nation has allowed the keys to such success to slip away. Australia is heading towards more public spending, bigger government to drive the economy, higher personal income taxes, historically lower unemployment, weak productivity, high energy prices, prolonged budget deficits and modest gains in living standards.

Australia is no longer exceptional in any economic respect. Canberra needs to make a robust course correction. How can the political class revive productivity and make the country more competitive and prosperous again?