Australia has experienced a "lost decade" due to a political system that prioritized short-term survival over necessary, long-term reforms, according to Peter van Onselen.
This period, marked by a lack of significant structural change, has resulted in mounting national debt, stagnating living standards, and a failure to address critical issues like housing affordability and productivity. The Parliamentary Budget Office has warned that combined federal and state debt could reach $2 trillion by the end of the decade without significant changes. Former Treasury secretary Martin Parkinson has also voiced concerns about the burden of public debt on younger generations.
The core issue, as described by van Onselen, is that political activity has been mistaken for genuine achievement. Reforms that permanently alter the nation's economic or social architecture, such as Medicare or compulsory superannuation, have been absent. Instead, governments have engaged in what is termed "avoidance" on key issues. Housing affordability, for instance, has been debated extensively without tackling underlying tax settings, planning failures, and supply constraints.
Productivity has become a mere slogan, and climate policy has been reduced to targets and subsidies, circumventing politically difficult trade-offs. Tax reform, declared necessary, was simultaneously treated as electoral poison, leading to piecemeal changes primarily aimed at increasing revenue for existing spending rather than fundamental restructuring. The persistent accumulation of spending promises over the past decade, without addressing the revenue side, has left a legacy of increasing debt and interest costs.
While reforms were attempted in the years leading up to 2016, such as Kevin Rudd's emissions trading scheme, Julia Gillard's significant reforms, and Tony Abbott's 2014 budget attempt at fiscal repair, these efforts ultimately failed to achieve lasting change or public approval. The decade following Malcolm Turnbull's 2016 election victory, however, saw governments cease to even attempt significant reshaping of the country. Lessons learned from past reform failures, like WorkChoices, the "carbon wars," the mining tax, and Bill Shorten's 2019 election loss, led politicians to conclude that ambition created political targets, prompting a strategy of inaction.
Turnbull's narrow 2016 victory is seen as the starting point of this "lost decade," as he abandoned white papers on tax and federation that could have provided a foundation for reform. Scott Morrison's prime ministership is characterized as transactional, with governance focused on messaging and navigating the news cycle. While the COVID-19 pandemic briefly spurred bold action, like the JobKeeper program, subsequent failures in hotel quarantine, aged care, and vaccine procurement highlighted neglected institutions.
Labor's first term under Anthony Albanese, following Morrison's perceived toxicity, was marked by caution, influenced by the trauma of the 2019 defeat and further solidified by the failure of the Indigenous Voice referendum. This caution has been interpreted as three additional years lost. The 2026 federal budget, which broke some Labor promises in the name of reform, is criticized for not securing a public mandate first, risking the perception that reform means concealed plans.
Van Onselen argues that Australia needs genuine tax reform that rewards work and investment while funding essential services. He calls for a national debate on the balance between taxation and services. Housing reform must address supply-side issues and demand driven by tax policies. Federation reform is deemed essential, alongside improvements in public service performance and parliamentary scrutiny of executive power. Crucially, he urges politicians to rediscover the belief in persuading voters through rational argument and to improve their persuasive skills.
The "lost decade" is not deemed a catastrophe, but replicating it could lead to irreversible decline. The author suggests that Australia did not lose this decade due to a lack of wealth, talent, or luck, but because its political system failed, a failure in which the public also shares responsibility by accepting the politicians they "deserve."