Opinion piece: A new agenda for growth in the 2020s

For Australia to prosper and grow through the 2020s and beyond we need to learn the right lessons and draw the right conclusions from this year’s fortieth anniversary of the election of the Hawke‑Keating Government.

It’s not to turn back and retrace the steps of our predecessors, even our heroes, even as we admire their ambition and achievements. It’s to look forwards, upwards and outwards – to the future, to economic mobility, and to the world, like they did.

It’s to understand that the best Labor governments, the best Australian governments, pursue both growth and distribution – not growth or distribution.

It’s not to try and retrofit old agendas and policies onto the complex combination of today’s uncertainties, global and domestic.

Times have changed and we need to evolve and change too.

Paul and Bob would expect nothing less from their successors, or from a modern Australia built on their successes.

The big reform opportunities of the 1980s are now well‑known to readers of the Financial Review, and so too are the areas where Australia stands to benefit in the future.

There’s a broad consensus that our prospects for growth in the 2020s won’t be determined by tariff reform or financial deregulation – but by the intersection of opportunities in energy and critical minerals, our capacity to broaden and deepen our industrial base through value‑adding, the expansion of the care and service economies, and finding a role and a place for more people in our national economic success.

The energy transition and adoption of new technologies in new and traditional areas of economic strength will be the defining phenomena of this decade and possibly the defining opportunities for this government.

We recognise our economy is not productive enough, not competitive enough, or resilient enough and for too long there hasn’t been a strategy to grow it strongly enough.

So just as the fortieth anniversary of 1983 is relevant here, so too is the tenth anniversary of the 2013 election, which began a wasted decade of missed opportunities and warped priorities manifested in wage stagnation, skills shortages, flatlining productivity and weak business investment that has left us more vulnerable to international shocks like we see now.

No mainstream economist expects economic growth to be thick on the ground this coming year – not abroad and not here.

Just last week, the International Monetary Fund chief Kristalina Georgieva warned we face “a tough year, tougher than the year we leave behind”.

There is more than the usual level of unpredictability in the forecasts right now, with our fortunes to be largely shaped by the war in Ukraine, China’s management of COVID, the fate of the US, UK and Europe, the impact of rate rises, and the uncertainties of natural disasters.

In the face of all this we are neither pessimistic nor complacent – we are optimistic and realistic and focused on where we can make a meaningful difference.

The Budget last October was about funding our commitments, making our finances more sustainable by banking the temporary revenue surge, and investing in supply challenges.

Its most important contribution to growth was a combination of capacity‑boosting workforce policies: cheaper childcare and the extension of paid parental leave; free TAFE and more university places; increased skilled migration; and a Housing Accord to build the affordable homes we need where the jobs and opportunities are being created.

In May we will continue to make the Budget more responsible and our economy more resilient, but there’ll be a greater focus on growth as well – growth that is stronger, more sustainable and more inclusive, where more Australians get a slice of the economic success they help create.

The long arc of three decades of growth was an incredible achievement for Australia but our focus now needs to be on the next expansion, not the last one.

It will come from cleaner and cheaper, more reliable and increasingly renewable energy, creating new industries and turbocharging traditional ones.

It will come from productivity growth – a function of our investments in the potential of our people and the ways they can benefit from technology.

It will come from trillions of dollars in capital finding its way to opportunities which provide great returns and align with our values and objectives.

Not just growth with more and bigger branches, but deeper and stronger roots as well. More sustainable and enduring growth, more reliable, and more resistant to international shocks.

Growth that recognises both the central, wealth‑creating and job‑generating role of the private sector and a leadership role for government in helping to ensure capital flows most efficiently and effectively in markets which serve our shared economic objectives.

Even with our advantages – low unemployment, high prices for our exports, and the beginning of wages growth – most expect the year ahead to be a difficult one.

But recognising this is not to throw our hands in the air. We are neither immune from a global downturn nor bereft of choices.

By learning the right lessons – from what happened after 1983, and what happened after 2013 – we can steer our way through a challenging 2023 and toward a new decade of growth and prosperity after the global downturn.