Professor Quentin Grafton.

Boom or bust: where to Australia?

03 February 2014

The plain sailing enjoyed by the Australian economy over the last two decades is unlikely to continue and the country’s policymakers need to take timely and effective steps to ensure our future prosperity, Professor Quentin Grafton will warn today.

Speaking at the 2014 Australian Agricultural and Resource Economics Society Conference in Port Macquarie, Professor Grafton will warn of the dangers of getting our policy settings wrong.

Professor Grafton is Executive Director of the Australian National Institute of Public Policy at The Australian National University’s Crawford School. Previously he was Chief Economist and Executive Director of the Australian Bureau of Resources and Energy Economics.

Presenting the Keith Campbell Distinguished Lecture, Professor Grafton will identify a number of risks and opportunities facing the Australian economy, including a predicted decline in per capita income growth in the decade to 2023, combined with falling labour force participation and less favourable terms of trade.

He said more progress needed to be made in relation to the country’s workforce.

“Australia does not have a “deficiency of infrastructure”, but it does have a problem with human capital, and needs to dramatically improve long-term educational performance and funding models,” Professor Grafton said.

He will also discuss asset prices, trade and the impact of China on the Australian economy. He said that policymakers needed to make some careful and considered choices to navigate a course through the upcoming global economic challenges.

“Australia is not the sole master of its own destiny, but neither can it simply hope for the best or bet on its famed luck. Australia will navigate less friendly economic conditions in the years ahead to 2020,” he said.

“Inaction, or the wrong sort of actions, will make Australia more vulnerable and greatly increase the chances of a ‘hard landing’ for its economy.”

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