EDITORIAL: Government must articulate growth plan

The numbers look dire. In the first three months of the year, the Australian economy grew just 0.2 per cent, below economists’ expectations.

The anaemic growth has rekindled fears that Australia is headed back towards a per capita recession, after having just emerged from one. That would further erode living standards, which have taken a hammering since the start of the pandemic.

But Treasurer Jim Chalmers used the there’s-starving-kids-in-Africa-so-be-grateful argument to justify his claim that he’s “quite optimistic about the future of our economy”.

“With all of the uncertainty in the world, any growth is a decent outcome,” he said on Wednesday.

“That 0.2 per cent in the quarter, the 1.3 per cent through the year should be seen in the context (that) most of our peers in the OECD have had negative quarters.”

Dr Chalmers admitted growth was softer than he’d like, but warned against “over-interpretation” of the data given the period coincided with the end of big government spending projects signalling a drop-off in public spending.

So how should Australians interpret it? What are punters to make of the jumble of mixed signals they are being bombarded with?

And crucially, what is the Government’s plan to pull us out of this growth and productivity slump?

One thing Anthony Albanese and his Labor Government have in abundance since their rousing election win is political capital.

But they seem at a loss as to what to do with it.

They’ve made clear their welfare agenda. They have plans to spend big on health and housing, and to wipe billions in HECS debts.

But that social spending must be accompanied by a plan to boost the opposite side of the ledger. And that, they’ve failed to articulate clearly.

In the days following the election, Dr Chalmers delighted economists by declaring his focus during Labor’s second term would be on boosting Australia’s ailing productivity. To that end, he has ordered a raft of reviews, though hasn’t committed to implementing their recommendations.

Those reviews should provide valuable guidance. But we can’t twiddle our thumbs until they report back.

As Dr Chalmers has noted, productivity is a long game. There’s no one single lever that can be pulled to magically put things on the right track; a suite of policies must work in concert.

But much of what the Government is doing — increasing the complexity of industrial relations regulations, creating extra layers of environmental bureaucracy — is actively holding productivity back.

We have a world leading resources industry, without which the economy would be in serious trouble. Yet those same industries which are sustaining what little growth we are do have are constantly under attack, being made to justify their existence by hostile forces — some of whom are within the Government.

It feels like our leaders are treading water, waiting for an answer to fall into their laps when what we need is big picture thinking to pull us through these wicked challenges.

Responsibility for the editorial comment is taken by Editor-In-Chief Christoper Dore.