Danielle Wood is the CEO of the Grattan Institute, an independent think tank, Its purpose is to research and advocate policies to improve Australians’ lives.
Wood laments the dearth of policy debate in this election.
“There was a lot of optimism when we were coming out of COVID that this might be a period of genuine policy reform. It certainly was a period that laid bare a lot of challenges. We saw trust in government go up and there was a lot of talk of building back better in the sense that government might do some of those big things. But clearly, that’s not the election we’re in right now,” she says.
“We are now in a world where we’ve come out of COVID with government much bigger than what we went in. So we’ve baked in this higher spending on aged care, higher spending on defence, a higher spending on the NDIS.
"In fact, size of governments increase about 2% of GDP, which is pretty extraordinary. Yet we’ve had no conversation about how we pay for that.”
Climate change is to the fore in the minds of many economists as well as voters, and a central feature of “teal” candidates’ campaigns. But the government and Labor are not talking about it a great deal in the campaign.
“I think it’s really interesting to see economists so galvanised by that. We need to get on the path to net zero by 2050. Both major parties have signed on to that as a target. That is a massive economic transition. And frankly, if we don’t start making serious headway over the next decade, we’re going to leave ourselves with a very large and very disruptive task through the 2030s and forties.”
Anthony Albanese this week found himself under attack after advocating a 5.1% rise (reflecting the latest inflation figure) in the minimum wage. Wood says: “Locking in very high wage rises right now is not the right answer. But that’s not to say that wages growing at 2% is a good answer either. So it’s somewhere in between.”
Australia needs to increase productivity, but where should the focus be? “I would like to see a focus on education. There are things we can do in health as well, such as primary care reform, which could make a big difference […] And remember, that’s a big area in the economy and spending.”
Should we be more worried than we are about Australia’s debt level? “I’m not worried about the current levels of debt in terms of sustainability. Obviously we’ve come out of COVID with much higher debt levels than we went in with. But based on at least the current interest profile, it’s very serviceable and sustainable.”