Former treasurer Peter Costello on Tuesday warned<\/a> Australia had shifted from having no net debt to no net worth, with government capital having run down $700b over the past 20 years.<\/p>\n\u201cThis will particularly disadvantage the young,” the Howard-era treasurer said at the Aspire conference in Sydney.<\/p>\n
Reacting to Mr Costello’s speech, AMP\u2019s chief economist Shane Oliver said Australia\u2019s strong productivity growth and boost in living standards between the beginning of Bob Hawke\u2019s prime ministership and the end of John Howard\u2019s was wasted.<\/p>\n
\u201cUnfortunately, since\u2026 just less than 20 years ago in 2007-08, governments in Australia have let the ball slip,\u201d \u00a0he told Business Now.<\/p>\n
\u201cWe’ve coasted too much on the earnings from the mining sector. We’ve had good luck on that front, but we’ve dropped the ball in terms of productivity reforms.<\/p>\n
\u201cOur tax system is no longer fit for purpose, our economy has become a lot less competitive, we’ve seen the budget turn around from surpluses to perennial deficits\u2026 it looks like budget deficits as far as the eye can see, and at the core of all of this has been this big slump in productivity growth.\u201d<\/p>\n
Australia\u2019s productivity growth currently sits around historic lows at 0.8 per cent.<\/p>\n
Between the 2004 and 2016 financial years, annual productivity growth was either 1.7 or 1.8 per cent.<\/p>\n
It took a dive over the past decade by about one per cent.<\/p>\n
Mr Oliver said the lacklustre productivity was worsened by large levels of public spending which had put pressure on inflation and interest rates.<\/p>\n
\u201cWe’re running record levels of government spending and rising levels of taxation,\u201d he said.<\/p>\n
\u201cThe only way we have a hope of getting the budget back to balance is if we just keep relying on bracket creep.\u201d<\/p>\n
Mr Oliver has previously warned Australia could face higher borrowing rates if debt to GDP rises to the point where major agencies are forced to downgrade the nation’s credit rating.<\/p>\n
Government spending sits at its highest level in 40 years \u2013 outside the pandemic \u2013 and spending as a portion of GDP will be 26.9 per cent in 2025-26.<\/p>\n","protected":false},"excerpt":{"rendered":"Australian governments over the past two decades have \u201clet the ball slip\u201d and squandered the momentum generated by…\n","protected":false},"author":2,"featured_media":502127,"comment_status":"","ping_status":"","sticky":false,"template":"","format":"standard","meta":{"footnotes":""},"categories":[11],"tags":[161852,252467,64,63,99,164,5465,5626,184679,3324,5716],"class_list":{"0":"post-502126","1":"post","2":"type-post","3":"status-publish","4":"format-standard","5":"has-post-thumbnail","7":"category-economy","8":"tag-amp","9":"tag-amps-chief-economist-shane-oliver","10":"tag-au","11":"tag-australia","12":"tag-business","13":"tag-economy","14":"tag-inflation","15":"tag-interest-rates","16":"tag-peter-costello","17":"tag-productivity","18":"tag-shane-oliver"},"_links":{"self":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/502126","targetHints":{"allow":["GET"]}}],"collection":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts"}],"about":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/types\/post"}],"author":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/users\/2"}],"replies":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/comments?post=502126"}],"version-history":[{"count":0,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/posts\/502126\/revisions"}],"wp:featuredmedia":[{"embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media\/502127"}],"wp:attachment":[{"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/media?parent=502126"}],"wp:term":[{"taxonomy":"category","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/categories?post=502126"},{"taxonomy":"post_tag","embeddable":true,"href":"https:\/\/www.newsbeep.com\/au\/wp-json\/wp\/v2\/tags?post=502126"}],"curies":[{"name":"wp","href":"https:\/\/api.w.org\/{rel}","templated":true}]}}