Short-termism is holding Australia back

The next Federal Election isn’t due for nine months, but the policy conversation has already shifted.   

Barely two years into a term that saw early action in important areas, the Government now appears to be going slow on some vital and electorally sensitive policies.

Take aged-care reform, where new approaches are critical to the long-term sustainability of the sector. We’re still awaiting the response to the Government’s industry taskforce, which reported last year. 

We can’t afford to delay and must face the realities of the sector. Older Australians will need to contribute more to the costs of care or providers will not be able to meet the growing needs of our ageing population. 

Where they can afford it, older Australians should pay for daily living costs such as cleaning, food, laundry and activities.

The Government should also consider increasing the means test threshold for the family home to around $500,000, reflecting the significant rise in home values over the last decade. 

We must change how the sector is funded to be able to provide the level of care Australians require, but we keep putting it off.

The first Intergenerational Report (IGR) assessed the impacts of population ageing more than 20 years ago. We’ve had four editions since then. 

That’s a generation of Intergenerational Reports all laying out the structural challenges we face, and against which too little progress has been made.

Imagine if we had started laying the path for aged care-reforms and funding back then or tackled the tax and productivity headwinds also clearly flagged.  

These are just some of the many long-term challenges Australia has become very good at analysing, but less effective at properly addressing.   

CEDA has assessed Australia’s key economic strengths, weaknesses, opportunities and threats to shape a long-term view on our biggest policy challenges. The sad truth is that many of the trends it identifies are well-known.  

Whether it’s a housing crisis decades in the making, stagnant productivity, the inadequacy of welfare payments and support, tax reform, or our inability to close the gap on Indigenous life outcomes, Australia seems stuck in the face of both significant challenges and opportunities.  

As someone who has been around policy conversations for three decades, it is disheartening to see us embark on another cycle where we identify the same problems, come up with the same solutions, get bogged down in consultation and implementation, and nothing changes. 

This rinse-and-repeat cycle shortens the time we have left to make the changes we will inevitably need to make.  

Australia’s path to net-zero emissions is another case in point. 

Having finally adopted and legislated a target of net zero by 2050, progress is now in train. The path to this point has been too long, however, and saw effective policies like the price on carbon killed off on the way through.  

Meanwhile, options like nuclear energy have been politicised rather than objectively considered through a technology-agnostic approach to decarbonisation.  

We should be focusing on how best to get to net zero and deliver reliable, affordable energy. 

And while current evidence indicates nuclear energy does not stack up on timing or cost, that does not mean we should forever rule out technological advances and future possibilities.  

The big issues facing the nation all require long-term, well-planned policy solutions. We should be looking ahead to where we want to be 25 years from now and working towards those goals. And we must bring more of Australia into these conversations. 

That was the clear message from research we did back in 2018 that showed the majority of Australians felt disconnected from the benefits of a strong economy. Since then, mistrust in politicians, institutions and democracy more broadly has only grown.  

The short-termism engendered by our three-year electoral cycle, the 24-hour media cycle and social media makes all of this hugely difficult – eliminating nuance, shrinking debates and focusing on points of tension and difference. 

But we’ve got to address these and other barriers to change if we want to secure our future living standards.   

A good starting point would be to lift our ambition on productivity, to ensure we can build the houses we need, manage our energy transition and care for an ageing population.

If we aspire to policy that supports productivity rather than impedes it, we might have more chance of success, instead of leaving the challenge to the next generation.

And if our politicians focussed more on long-term policy solutions and less on electoral cycles it might even boost their own productivity.

That’s one productivity gain all Australians could get behind.