The recent election was won by looking ahead. But a better economic future requires an economic reform agenda, and getting agreement will not be easy. However, there are encouraging signs that the government is up to the task.

A repost from 8 May 2025

The economy, and especially the cost of living, dominated the recent election campaign. It seems likely that Anthony Albanese won because he invited us to look forward instead of looking back, as Peter Dutton invited us to do.

While real wages are still 4.8% lower than their pre-pandemic level, and interest rates are still high, the expectation is that we have turned the corner. Real wages have at least started to rise and interest rates to fall. But there is some distance to go.

Labor was also able to point to the assistance that it offered to the most needy during the cost-of-living crisis. For example, analysis by the ANU’s Centre for Social Policy Research revealed that Labor’s highly progressive first-term tax and welfare reforms boosted the incomes among the least well-off households by an average of $1672 in 2025-26. In contrast, the wealthiest households will be nearly $800 worse off, mainly because of the rejigged income tax cuts.

In addition, the government has supported pay increases for poorly renumerated employees in aged care and childcare. Childcare support has been extended, rental assistance increased and cheaper medicines have been delivered.

Tight fiscal constraints have, however, limited the amount of support that the government can provide to those who are doing it tough. Indeed, as will be argued below, a Labor Government will need more revenue if it is to fully play its role in ensuring that no-one is left behind.

But tax reform is only one part — albeit a key part — of what should be a wider agenda for economic reform. Most obviously, productivity is the key to raising our living standards over time. In addition, the Grattan Institute in its policy priorities includes:

Progress on many of these issues is occurring already, and so this article will concentrate on productivity, housing affordability and taxation reforms.

Productivity

To coin a phrase, every Galah in the pet shop has a recommendation about how to improve productivity – very often a self-serving recommendation for changes in taxation and/or the regulation of workplace relations.

The most comprehensive review of reforms to lift productivity was produced by the Productivity Commission in 2023 in its five-year Productivity Inquiry: Advancing Prosperity. There are 29 reform directives drawing on 71 separate recommendations.

These reform directives include education and skills training, the selection of skilled migrants, the adoption of digital technologies, addressing the lack of........

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