What economy is RBA Deputy Governor Andrew Hauser talking about?

Employers can no longer manage their staff effectively – or even insist they attend the office.

Growth has come mainly from the public sector, which is crowding out the private sector. This inflates government payrolls at both state and federal levels, driving up debt and guaranteeing future tax rises.

In industries such as health and child care, the government has imposed wage increases and even mandatory staffing ratios, which reduce productivity while lifting costs.

Its botched energy transition has pushed up electricity prices – a cost that ripples through every industry, further cutting profitability.

And while the transition is nominally driven by private capital, it relies on government subsidies for profitability, diverting investment from genuinely productive areas — a form of crowding-out not captured in official ABS statistics.

Hauser boasts that Australia has the second-highest median wealth in the world, yet this is less a triumph than a measure of housing unaffordability.

Housing is the RBA’s and the government’s greatest failure. It is now twice as unaffordable as it was just six years ago – the product of:

• years of artificially low interest rates that encouraged excessive borrowing and inflated prices;
• government regulation that constrains supply; and
• unprecedented immigration that turbocharged demand.

Add to this “rich Uncle Albo’s five-per-cent deposit and shared-equity scheme”, which lures young Australians into what amounts to debt bondage.

Hauser appears to think the mining industry will save us. It could – but not under the current or proposed Environmental Protection and Biodiversity Conservation Act, or the layers of state, federal, and First Nations red tape.

Australia has slipped down the list of desirable mining jurisdictions, and the average time to develop a mine is now around 20 years, according to S&P Global Market Intelligence. Western Australia and Queensland remain the best of the bunch, but Queensland recently sabotaged its position by imposing the highest coal royalties in the world.

These are deep structural flaws. They make it improbable that Australia will restore productivity growth even to the modest levels of 2010–19, let alone the stronger rates of the 1980s.