What it will take to concentrate political minds on major reform

What it will take to concentrate political minds on major reform. Jeremy Lawson, Chief Economist at Standard Life Investments, said on Tuesday it could take a 1980s-style crisis to force politicians to tackle the country's shrinking income base while restructuring expenditure. If you look at Australia's history, major reform episodes tended to follow crises; it's not until it's clear that what's going on is unsustainable that you've run out of time... It's when you have that next recession, when unemployment is not 6.5 per cent but 8 or 9 or 10 per cent, where you'll really concentrate minds. In a way, I think the government's decided to tackle the wrong problems... It's invested a lot of capital in some unpopular things that actually aren't going to be the critical determinants of whether Australia's potential growth rate and productivity growth ends up being lifted. The whole obsession with quickly getting back to a surplus is really counter-productive. Read the full article via the AFR (paywall) (VIEW LINK)


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