The first report from the e61-UNSW Policy Research Partnership highlights key economic challenges and necessary reforms for the next Federal Parliament. Among the key recommendations is finding new opportunities with trusted trade partners as global shifts like steel tariffs come into effect.
The next Federal Government will face major economic policy challenges that will shape Australia’s position in the global landscape, according to a new report from the e61 Institute and UNSW Sydney.
Navigating United States–China trade relations, reassessing immigration and high population growth, and boosting stagnant productivity are among the key economic obstacles facing the country. Regardless of which party holds power, the Parliament’s response will be critical to the wellbeing of all Australians.
Australia’s policy challenges today are as significant as at any time in nearly half a century, said Scientia Professor Richard Holden from the School of Economics at UNSW Business School, and co-author of the new report Five Economic Themes That Will Dominate the Next Parliament.
“This report highlights five economic themes that will shape Australia’s policy debate in the life of the next parliament and beyond,” said Prof. Holden. “We hope it will assist policymakers as they adapt to the new global order and tackle domestic pressures by framing the big policy challenges and identifying where policy needs to adapt.”
These five economic themes will be paramount for the new Parliament to grapple with:
- Negotiating a new global order: As the world moves away from a rules-based system (the current political, legal and economic framework governing international relations), Australia must leverage its comparative advantages in security and resources to its geopolitical and trading partners. In particular, Australia must find opportunities in a strategic move to ‘‘friend-shoring’’ – integrating supply chain production more with trusted trading partners.
- Re-examining a high population growth model: Australia has one of the highest population growth rates in the developed world, up by 35% in the past two decades (OECD average is just 13%). But this high-growth approach faces political pressure, in large part due to rising housing costs. With both major parties seeking to slow the rate of immigration, policymakers must rethink strategies to support an ageing population while maximising the benefits of skilled migration.
- Boosting productivity growth: Australia’s productivity performance has been flat since the start of COVID-19. With changing global and domestic conditions, it is imperative we address productivity challenges, including low job mobility and a growing care sector.
- Restoring fiscal sustainability: Australia’s budgetary pressures are set to grow, and future budget surpluses are at the whim of iron ore prices and reliant on bracket creep. Restoring fiscal sustainability via a balanced budget and low debt can help Australia weather global shocks.
- Achieving a sustainable intergenerational bargain: Without addressing housing affordability, fiscal pressures and improving productivity growth, Australia risks younger generations being worse off than their parents and grandparents.
e61-UNSW Policy Research Partnership
The report launches the new e61-UNSW Policy Research Partnership, which aims to contribute to the next stage of significant reform in Australia. Combining rigorous academic capability, newly available datasets and a strong public policy focus, the partnership will shed light on the critical challenges facing decision-makers and identify areas where policy needs to adapt.
“We live in a time of stark political and strategic disruption, and policymakers face an unenviable task of confronting complex challenges without ready-made, well-defined solutions,” said Michael Brennan, CEO of the e61 Institute and co-author of the report. “The report aims to assist policymakers as they adapt to the new global order and tackle domestic pressures by framing the big policy challenges.”
The partnership between e61 and UNSW will generate several strategic initiatives, including an international visitor program to host leading global scholars, an annual “micro-4-macro” conference, and a yearly joint research theme on a nationally significant topic.
“e61 was born from a motivation to bring together problem-solvers from academia, industry and government to push the knowledge frontier so that we can tackle the big problems facing our society,” said Mr Brennan. “The new e61-UNSW partnership will help break down the complexity and uncertainty facing policymakers by making sense of the world and providing new evidence to guide future policy direction.”
“The e61 Institute also acknowledges and thanks Macquarie University for the significant role it has played in e61’s establishment and early success. While our formal partnership with Macquarie is concluding, we remain committed to maintaining strong relationships with Macquarie researchers and exploring future collaborations.”
Contact details:
For interviews with report co-author Professor Richard Holden please contact: Ben Knight, UNSW Sydney, [email protected], 0422 651 085
For interviews with report co-author and e61 CEO Michael Brennan please contact: Rose Khattar, e61 Institute, [email protected], 0434 865 796