Australia has no shortage of wealth, projects or policy targets. What it lacks is a coherent strategy for building the capabilities its future society will need.

Australia is remarkably good at talking about the future while avoiding the harder question of how we might deliberately create it. We have productivity agendas, housing targets, defence reviews, net-zero commitments, infrastructure pipelines, population projections and endless announcements of projects described as ’transformational’. What we lack is an organising conception of what Australia is trying to become and a political strategy for getting from here to there.

That matters because Australia enters the coming decades from a peculiar position. We remain an extraordinarily wealthy country, endowed with minerals, energy, land, accumulated capital, educated people and functioning democratic institutions. Yet much of this prosperity disguises vulnerability. We remain heavily dependent on commodity exports, imported technologies and foreign corporations; extraordinarily committed to property and land as stores of wealth; comparatively weak in economic complexity; environmentally stressed; strategically dependent on the United States while economically embedded in Asia; and increasingly unable to provide something as basic as affordable housing to younger Australians.

Another round of ‘productivity reform’ is not an adequate response. Productivity matters, but it is a means rather than a national purpose. A highly productive economy could still be unequal, ecologically destructive, technologically dependent and incapable of housing its population. The larger question is capability: what can Australia actually do, what can Australians do, and are those capabilities expanding or contracting?

This suggests a different conception of national development. Australia needs to become a deliberately capable country not through central planning, nor through another bout of faith that markets will spontaneously produce the society we require, but through a sophisticated mixed economy in which democratic government establishes long-term purposes and builds institutions through which public investment, private enterprise, superannuation capital, universities, workers and communities can contribute.

The distinction between activity and........

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