A better Australia beckons

With 3 May just three weeks away, the federal election is an opportunity to set Australia’s path, writes Aruna Sathanapally.

This election is being held at a time of great uncertainty. The international rules-based order is under siege, and the world is more unstable than it has been in decades. The impacts of climate change are showing themselves. Many Australians, having only recently emerged from a global pandemic, have faced significant financial pressures from rising living costs.

But Australia has successfully navigated the crises of recent years while avoiding mass job losses and bankruptcies. With inflation having fallen, it is our long-standing challenges that await: an ageing population, growing demand for health and care, a housing system that doesn’t serve our most basic needs, weak productivity growth, and the urgent imperative to decarbonise our economy.

These are challenges we share with many other countries – and Australia is better placed than most to meet them. Fortunately, Australia is not starting from scratch – progress is being made on several fronts, but governments will need to stay the course on necessary but difficult reforms, and tackle others left in the too-hard basket for too long.

Productivity growth is the key to raising our living standards in the long term. While the federal government doesn’t hold all the levers, it can strengthen the foundations: a competitive economy, a well-functioning labour market, the conditions for people to flourish – housing, health, education, and social cohesion – and the right infrastructure, tax, and regulatory settings.

Making housing more affordable is a social imperative

The transition to net zero presents opportunities for new high-value industries that use renewable energy. Implementing electricity and gas market reforms and comprehensive industry policy will be essential to realising them and avoiding a disruptive and costly transition later.

Australia’s housing problems have been decades in the making. Making housing more affordable is a social and economic imperative, and will require relaxing planning constraints, boosting supply, and supporting mobility.

In health, chronic disease is the big system challenge. Australia must adopt a prevention agenda, alongside changes in how GP clinics are funded to support chronic disease management, and a greater focus on hospital efficiency, to help meet growing demand for care.

In education, we must lift our game to ensure the next generation of students gains the essential skills. The NDIS provides life-changing support to many disabled Australians, but reforms to build up foundational supports and clarify eligibility for individualised support need to be implemented well to make the scheme sustainable.

We should also improve our retirement incomes system by simplifying the system for retirees, curbing superannuation tax breaks that cost far too much, and strengthening protections for vulnerable retirees.

Australia’s institutions remain a real strength. They underpin our resilience to forces we can’t control and are essential to our future prosperity. But to maintain the trust and confidence of the people, governments should introduce reforms to reduce the influence of vested interests and improve checks and balances on decision-making.

A better Australia beckons.

Aruna Sathanapally, CEO, Grattan Institute