Australia can address economic decline

Nevertheless, The Economist suggests that the Nordic countries will need further reform given that high levels of taxation now encourage entrepreneurs to move abroad, and too many people live off welfare benefits (especially immigrants) that require much greater means-testing.

In February 2016, it was reported that Sweden's wage setting model, which has served to protect industry's competitiveness by effectively putting a cap on wages for the rest of the labour market, was coming under greater pressure. Different unions now proposed separate wage demands during upcoming wage negotiations; major unions were at odds about how to halve the pay gap between women and men by 2028; the government had intervened to award teachers higher pay to improve teachers' status; and business groups argued that refugees should be paid lower wages (even frozen) to get them into work.

The extent of any policy reform is always a matter for national debate, but any reform should be promoted and defended as a policy to aid a dynamic economy rather than hinder it.

Take the taxation of housing in Australia. While state governments enjoy high stamp duty revenue from the recent housing boom, a recent March 2016 McKell Institute report urges an annual property tax on all owned land (not housing) based on a per square metre value with no tax-free threshold. Removing stamp duty would lower up-front costs; remove penalties for those moving house to find work or those who need to repurchase after unforeseen circumstances such as divorce; aid people downsizing in older age; and gain revenue from those who live in an expensive house and pay no tax (A plan to end stamp duty: making property taxation farer in New South Wales).

To conclude, Australia can long remain a great nation with a decent economic/social policy mix. It does retain a number of advantages that will remain attractive to domestic and foreign investment. Nevertheless, in an increasingly global economy, assuming that dangerous levels of protectionist sentiment do not re-emerge, ongoing reform is needed to ensure continued prosperity for Australia's liberal democracy.