Our Prosperity is Slipping Away: Submission to Economic Reform Roundtable by Michael Stutchbury

Australia’s extraordinary modern prosperity, built on the supply-side economic liberalisation of the 1980s and 1990s and boosted by the China-fuelled resources boom, is being squandered.

In Our Prosperity is Slipping Away: Submission to Economic Reform Roundtable, Michael Stutchbury writes that urgent reform is needed to stop the slump.

“History shows such periods of relative affluence are rare and temporary, as seen in the 1850s–80s, early 1950s and late 1960s–early 1970s,” Stutchbury says. “Australia’s most recent peak in prosperity occurred in 2011–12 and has been in decline ever since. 
 
“Rather than taking the policy decisions necessary to sustain growth, the political process has descended into a contest over redistributing shrinking wealth.  

“The Reserve Bank’s downgrading of productivity forecasts confirms an unacceptable low-growth future.” 

The paper urges the Economic Reform Roundtable to reject this trajectory and commit to making Australia “an aspirational and enterprise-driven high-growth nation bursting with investment opportunities”.  

It argues that this means reinstating credible fiscal rules, restraining government spending, and undertaking genuine tax reform — beginning with indexing personal income tax scales to curb bracket creep 

“The tax system is weighing on the economy but piecemeal 'tax reform' should not become a mechanism to validate the increase in the size of government that already has contributed to declining absolute productivity,” Stutchbury says. 

Housing shortages, caused by restrictive zoning and planning laws, must be addressed alongside a broader removal of “thickets of regulation” that stifle business dynamism. Education reform is also critical to reverse declining literacy, numeracy, and lifetime earnings. 

Finally, energy policy must restore Australia’s low-cost advantage, reversing trends that have driven up prices, undermined competitiveness, and fueled costly protectionism. 

Michael Stutchbury is Executive Director of the Centre for Independent Studies. 

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