Around this time two years ago, I questioned the effectiveness and fairness of the initiatives bundled into the ‘National Reconstruction Fund.’
I am still questioning.
With an election looming in early 2025, I expect a predictable flurry of press releases from both sides of the political divide, each extolling their own recycled virtues. If we were able to fast forward to 2027 and look back, I have little doubt that the progress made will have been as glacial, if discernible at all, as it has been in the past decade.
Since my initial commentary, the updated Harvard Complexity Index has marked Australia’s further decline to a rank of 102, squeezed ignominiously between Senegal and Yemen. This is a stark indictment of the nation’s diminishing capacity to engage in sophisticated manufacturing and industrial activities.
There are no short-term fixes for this relentless erosion of economic potential.
The likelihood that our grandchildren will enjoy the same standard of living my generation took for granted grows slimmer with each passing year. Tragically, the long-term structural reforms needed to reverse this trend remain conspicuously absent from the agendas of those currently in power, and those seeking it. Beyond facile declarations and populist slogans there is little real substance.
The pack of political clowns in Canberra and beyond, hold the levers necessary to drive meaningful change. However, they seem paralysed: too timid to take bold action against the vested interests of a few, too ensnared by the trappings of power today, or, perhaps most damningly, too inept to grasp the urgency of the situation.
Perhaps it is all three?
Our past prosperity was built on the back of commodities.
For most of the 20th century it was those we grew, wool, beef, and grains. From the 1970’s that reliance evolved to those we dug up and exported for others to add the value. In parallel, manufacturing crashed from close to 30% of GDP in 1970 to 5.4% according to World bank figures in 2023.
Future prosperity will have an entirely different face.
It will be constructed of applied technology delivering globally competitive solutions to challenges only just emerging.
For those we require education, scientific discovery, application of those discoveries to global challenges, and a deep well of intellectual and financial capital generation to drive the development.
This is a challenging agenda, and we need to start the surgery now. The longer we leave it, the more painful it will be, and the further behind our competitors we will be starting.
