OECD Secretary-General Mathias Cormann gave the 2026 Neville Kennard Address on 17 October 2026 at the CIS Consilium 2026 in Queensland, Australia.
Check against delivery.
Thank you, Nicholas, Michael and Sam, ladies and gentlemen, friends all.
It is a real honour to deliver this address in the fiftieth year of the Centre for Independent Studies (CIS), and to do so in the name of Neville Kennard.
Neville built two businesses from nothing. He understood, from the inside, what economists only measure from the outside: that prosperity is created by people who take risks, who get to keep the rewards of their own effort, and who are free to build, buy and sell without first asking government's permission at every turn.
And he backed Greg Lindsay when backing a free-market think tank in Australia was perhaps an eccentric thing to do.
Australia owes him more, much more than it knows.
Five years after this Centre was founded, in April 1981, Milton Friedman stood in front of a CIS audience in Sydney and told them something they did not want to hear.
"Protectionism is rife," he said, "and in not very many places is it more so than Australia."
He had a point. But he gave that audience a second line, which was more hopeful than the first.
That was: "No country," he said, "has been able to succeed in keeping out ideas."
Ideas move in great tides of opinion. Those tides turn rarely, and slowly. But when they turn, they reshape what governments do.
In Australia, the tide turned. Within a generation, one of the most protected economies in the developed world had become one of the most open, and one of the most prosperous: a country where it did not matter where you came from, provided you were willing to have a go and work hard.
And that country – our country - was the product of choices.
My remarks tonight are really about whether, as a people, we are still prepared to make them.
In 1976, a small band of people went looking for an alternative to a consensus that had collapsed.
Inflation and unemployment were rising together, something the then prevailing orthodoxy said could not happen.
Australia was one of the most closed economies in the developed world.
The dollar was fixed, wages were set centrally, the banks were cartelised, and manufacturing sheltered behind effective rates of protection above 35 per cent.
The CIS, the Liberal backbench dries, Bert Kelly, the National Farmers Federation and a young John Howard had the courage to say what was unfashionable: that Australia was not poor because of bad luck. It was drifting because of bad policy choices.
My proposition to you tonight is that 2026 is somewhat of an echo of 1976.
I will seek to test that proposition against the evidence, from the vantage point that I do now occupy at the OECD, before setting out some pointers on what I think should happen to put Australia onto the best possible trajectory for the next fifty years.
Some of the things that I will have to say, not everyone in this room will agree with, but let’s have the battle of ideas. In doing so let’s find the best possible way forward. That is something CIS has contributed to so admirably over the past 50 years.
And I want to make one argument above all others tonight:
When you speak to anyone involved in politics today they will tell you that the cost of living is the issue Australians care about most right now – and for good reason. It is the pressure on every household budget, every week.
Behind the immediate worry and concern about cost of living pressure sits the aspiration that has always driven our country: to get ahead through your own effort, and to hand on to your children and grandchildren a country that is stronger, fairer and better off in the opportunities it offers than the one you inherited.
That is the quiet ambition of the Australian middle class, which has built this country.
Both of those things, the relief people need now and the future they want for their children, depend on the same thing.
Almost everything currently offered under the heading of 'cost of living' treats the symptom and not the underlying cause.
There is only one thing that has ever reliably and lastingly lifted what Australians can afford, and widened what their children can reach, and that is producing more for every hour we work.
Everything else is either borrowed from the future or taken from someone else. And what is borrowed from the future is borrowed from precisely the children we say we are doing it for.
Productivity is not an economist's abstraction. It is the cost-of-living policy. It is the opportunity policy.
It is the only one there is that works reliably over the long run.
The view from the OECD
Let me begin with where the world is at.
The global economy has been extraordinarily resilient in the face of successive shocks over the past six years: a once-in-a-century pandemic, Russia's invasion of Ukraine and the energy and food price shock it that followed, the sharpest surge in inflation in four decades, the return of tariffs as a routine instrument of policy, and now of course a conflict in the Middle East that has delivered a fresh energy shock.
Through all of it, the world kept growing around 3 per cent. Unevenly, but in aggregate across the global economy at 3 per cent.
But resilience is not the same as strength.
Trade barriers are at their highest in generations.
The post-Cold War assumption that open markets and the rule of law would spread indefinitely has been replaced by industrial policy, export controls and tariffs deployed as instruments of statecraft, by democracies as well as autocracies.
For a mid-sized, high-income, commodity-exporting economy at the bottom of the world, this environment poses a specific question:
When the big players retreat behind walls, should Australia build its own?
Or does a country that lives by trade have more to lose from a closed world than almost anyone, and therefore more reason to stay open, to keep its own house in order, and to be the most attractive place in the region to invest?
To me, and I hope to all of you, and I hope in time to the overwhelming majority of Australians, the answer should be obvious.
But the evidence also suggests Australia is drifting in the wrong direction.
Let’s remind ourselves what the reform era actually achieved
The case for openness in Australia is not a theory. It is a controlled experiment that our country ran on itself over forty years.
Around 1950, Australia ranked among the five richest countries in the world in income per person.
But by the early 1980s, it had slid well down the OECD table.
When you look back in 1976, inflation was going up and up and up, unemployment was going up and up and up. Australia was visibly falling behind the rest of the world.
Insulation had bred complacency, and complacency had bred relative decline.
Then, across party lines and across two decades, Australia changed course.
It started with the decision of the Whitlam government to cut tariffs by 25 per cent in 1973.
The Hawke and Keating governments floated the dollar, deregulated finance, admitted foreign banks, phased tariffs down to about five per cent, moved from centralised wage fixing to enterprise bargaining and, after the Hilmer Review, launched National Competition Policy.
The Howard government gave the Reserve Bank formal independence and an inflation target, returned the budget to surplus and paid off the Commonwealth's debt, introduced the goods and services tax (GST) and swept away a raft of inefficient state taxes, cut company and capital gains tax, implemented the Wallis financial system reforms that would later carry Australia through the global financial crisis, reformed the waterfront, moved welfare towards work and further liberalised the labour market.
None of it was plain sailing. Every one of those reforms was fought against resistance from across the political spectrum, and more than one, the float among them, was forced by crisis rather than chosen at leisure.
But the important point is, that direction held. Both sides of politics, one direction: open, competitive, outward-looking.
The results were there for all to see. Labour productivity grew at more than 2 per cent a year through the 1990s, near the top of the OECD.
The Productivity Commission later estimated that National Competition Policy alone permanently raised gross domestic product (GDP) by at least 2.5 per cent.
Australia recorded almost 29 years of uninterrupted growth, a run unmatched in the developed world.
And that growth showed up where it matters most: in pay packets.
For the better part of two decades, Australian workers received a pay rise above inflation almost every year, because the economy was producing more for every hour worked.
Productivity did two things at once in those years: It lifted what people were paid, and, through competition, it held down what they paid.
A pay rise above inflation almost every year, and a car, a television, an airfare and a phone call that cost a fraction of what they had.
That is what a falling cost of living actually looks like, from a kitchen table. It has only ever come from one source.
Remember that, because I will come back to what has happened since.
And here is the point that matters most for tonight.
Some here might say that Australia's new-millennium prosperity came not from these reforms, but from the China boom. That is a misreading. The reforms I have mentioned are what made that boom possible.
A protected, rigid economy with a fixed exchange rate could not have redeployed capital and labour to the Pilbara at the speed Australia did, nor converted the terms-of-trade windfall into higher real incomes across the whole country.
Openness was not the price of prosperity. It was the engine of prosperity.
The drift
But there is a second act.
From the mid-2000s the reform effort faded.
And the enduring resources boom hid the impact for a decade.
Today the mask has well and truly fallen away.
I’m not in a non-partisan job these days, the CIS is non-partisan. We are looking at this in an objective, evidence-based way to identify what has happened. This was not one side's failure. The appetite for reform faded across the political divide, in business and in the union movement as much as in parliament.
And it is easy to blame the politicians. I was one of them. But reform does not happen in a vacuum.
Genuine economic reform is hard at the best of times. It asks people to accept a visible cost now for a benefit that arrives later and spreads so widely that nobody ever sends a thank-you note.
In 1976, people could clearly see that and why there was a need for reform. But still, people in rooms like this one and around Australia had to really push and engage in the argument, make the case and win the arguments in the court of public opinion.
When times feel good, because a boom is hiding a slow drift, the public sees no reason to accept that bargain. Politicians who propose it are punished for solving a problem nobody can yet see or feel.
And when the lack of reform starts to bite, the same public is understandably drawn to the answers that look easy, even when they would make things worse, in particular, when the memory of the past lived experience on why they would make things worse is more than 50 years ago.
Governments of both persuasions have been working within that constraint. It is the constraint itself that has to change. That is where the CIS again has a job to do. And that is where I hope the OECD can contribute.
The Productivity Commission reports that labour productivity growth has limped along at under 0.3 per cent a year since 2015, against a thirty-year average of 1.6 per cent and 2.2 per cent in the reform era.
Its own verdict is that the reforms of the 1980s and 1990s have "run out of juice".
The OECD Economic Survey of Australia, which we published this year, found that real disposable incomes had declined markedly, that competition had waned across the economy over two decades as business dynamism fell and market concentration and profit margins rose, and that productivity in construction is lower than it was twenty years ago.
Now, the real wages story.
Through the 2010s, as productivity growth faded, real wages in Australia barely grew at all.
Then, from late 2021, they went backwards. For almost three years, until the middle of 2024, prices rose faster than pay packets.
Real wages are growing again, but only very modestly. On our latest figures at the OECD, real wages in Australia in early 2026 were still more than two per cent below where they stood in 2021, and this is the number that should concern everyone in this room – Australia is one of only six OECD countries in that position.
And that really should be a call of action for all of us to think harder on how we can reinvigorate productivity in Australia. And those stagnant wages have to stretch further here than almost anywhere, because Australia is objectively one of the most expensive countries in the OECD to live in.
Those two facts are connected, and the connection is competition.
When competitive pressure weakens, firms can raise prices and margins without becoming more productive.
Our Survey found exactly that: concentration up, margins up, dynamism down.
High prices and flat wages are the two faces of the same coin.
Think about what a price actually is: It is the cost of producing something, plus whatever margin the seller can get away with.
Productivity lowers the first. Competition disciplines the second.
A government that does nothing about either, and simply hands out money to help people pay the price, is pouring water into a bucket it refuses to fix.
Let me be specific about why the alternatives fail, because each of them is popular and each of them has been on offer.
Cash handouts and energy rebates put money into an economy that is not producing more, so prices go up to meet them, and the bill lands on the budget and then on the taxpayer. And these handouts – they buy a quarter, not a decade.
Price caps lower the price and shrink the supply, so the shortage shows up as a queue, a waiting list or a blackout instead of a bill.
Protection raises the price of everything a tariff touches, which is everything, and sends the bill to every farmer, miner and family in the country.
And simply legislating a pay rise without actually producing more does not raise real wages. It raises prices. Why can I say that? Because Australia has tried that one too before. The pay packet gets bigger in nominal terms but buys the same, or less. Australia tried it in the 1970s, and real wages actually went backwards.
Each of these transfers the cost somewhere: to the future, to the budget, to someone else. None of those approaches actually remove the cost.
Only productivity removes it, because only productivity means the same hour of work buys you more than it did.
Our public finances tell the same story, and they are a cost-of-living issue too, just one with a delay.
Every dollar of structural deficit today is a dollar of tax, or a dollar less of service, for a child now in primary school.
A country that funds today's relief by borrowing from tomorrow's workers is not solving its cost-of-living problem. It is posting its cost of living problem to its children.
Across the Commonwealth and the states combined, the deficit reached around 3.4 per cent of GDP in 2025 on OECD measures.
Spending in Australia across the Commonwealth and the states has been allowed to grow faster than the economy, and the tax system relies on bracket creep to do the fiscal work that governments will not do openly.
None of this is exotic. Every item on the OECD's list of recommendations for Australia was understood by the people who gathered at the CIS back in 1976.
What has changed is not the laws of economic or fiscal physics. It is the willingness to act on them.
And the cost of not acting is actually measurable.
The Productivity Commission estimates that restoring productivity growth to its historic average would make Australians at least fourteen thousand dollars a year better off by 2035.
Fourteen thousand dollars a year. That is two hundred and seventy dollars a week, for every Australian, not from a handout but from an economy that works better.
Set that against the alternative we are living here now: a decade in which productivity growth ran at a quarter of its historic pace, and in which, not by coincidence, real wages went nowhere and then went backwards.
So that is the real cost-of-living policy.
Everything else is redistribution of a pie that has stopped growing. And, measured per person, it has not just stopped. Through 2023 and 2024 the economy shrank for seven consecutive quarters on a per-capita basis, the longest such run on record. Population growth kept the headline number positive. It did not make any individual Australian better off. And Australians are feeling it.
The populist temptation
It is in exactly this environment that the populist offer arrives.
We all need to engage with that very seriously, because it is winning an audience as we all can see and it is winning an audience it did not have even five years ago.
The grievances it speaks to are real.
Real incomes have gone backwards.
A generation is locked out of home ownership.
Energy bills have risen.
Infrastructure has not kept pace with population.
Communities feel that decisions are made about them, without them.
Anyone who dismisses those grievances as ignorance has not understood what the data is clearly telling us.
But a correct diagnosis of the symptoms does not validate the prescription seemingly getting traction.
And the prescription on offer is one Australia has already tested, over three decades, and found to make the country poorer.
Consider the return of protection for domestic manufacturing, whether by tariff, by subsidy or by local-content rule.
Every form of it is a tax on Australian consumers and on Australian exporters.
It raises the price of inputs for every farmer, every miner and every builder, and it pushes up the exchange rate against the very industries that earn the nation's living.
Regional Australians whose support the populists court are the ones who paid most for the old tariff wall.
That is why the National Farmers Federation sat with the Liberal dries in 1976.
Consider arbitrary migration caps imposed regardless of their effect on business, on hospitals, on aged care or on the universities that are now one of Australia's largest export industries.
Let me acknowledge the public mood on this. More Australians now say the migrant intake is too high than at any time in twenty years, and the reason they give, overwhelmingly, is housing.
And that concern is legitimate. Population grew at twice the pace compared to home-building for three years. And even looking back further – housing, infrastructure and services have invariably not kept pace with population growth boosted by immigration.
But the answer is to fix what made it legitimate: housing supply, infrastructure, services and the composition of the intake, not to shrink the working age population.
Because the evidence is clear. OECD research across Australia's regions finds that where more migrants arrived, employment among Australian-born workers grew faster, not slower, with no measurable effect on their wages. Migrants to Australia in aggregate are better educated than migrants to any other OECD country. That is a policy choice that Australia has made. By international comparison Australia actually runs a highly successful and economically beneficial migration programme.
Consider what the alternative actually means for our economy and our living standards.
Because without migration, Australia's working-age population would already be shrinking today. With it, Australia is one of the very few advanced economies whose workforce is still projected to grow over the next forty years, while the OECD's workforce overall shrinks by 13 per cent and the European Union's workforce shrinks by 23.
Take that away from Australia, and the arithmetic turns on us further. The number of Australians over 85 triples regardless, health spending climbs from 4 to more than 6 per cent of national income regardless. And without migration, the people who would have paid for that care, and many of them likely provided it, are simply not there.
An ageing country that chooses to shrink its working-age population while promising to spend more on health, on care, defence, pensions has not developed a plan. It has put forward a contradiction.
We cannot have fewer workers and more hospitals, more aged care, a bigger pension bill and more defence all at the same time.
Someone has to pay for all that. You cannot shrink your way out of that bind. You can only grow your way out of it.
Consider, too, the growing hostility to foreign investment.
Australia has always needed more capital than it saves. Every generation of Australian prosperity, from the pastoral stations to the Pilbara, has been built with other people's money as well as our own. A country that makes itself a harder place to invest will not keep that capital at home. It will simply have less of it.
And consider the underlying logic, which is the same as the old protectionism: visible benefits for an assisted few, invisible costs spread across the many, and capital steered by political preference rather than competitive merit.
That logic produced the Australia of the 1970s. It will produce the same result again, with the added disadvantage that the rest of the world is now richer, faster and better educated than it was then.
A country with Australia's extraordinary endowment, including an endowment of critical minerals has a legitimate strategic interest in processing more of them and in supply chains that are not hostage to a single supplier. Of course.
But economic security is best achieved by being an indispensable, reliable and competitive supplier to the world, not by withdrawing from it or by making decisions to do things within your borders that you are not internationally competitive to do.
The test of any such measure is whether it makes Australia more competitive or less. And I would suggest to you that too much of what is now proposed under the banner of sovereignty and economic security fails that test.
A word to the inheritors of 1976
I am in a non-partisan job these days and will remain strictly non-partisan tonight.
The tradition that produced the CIS was not born inside a party. It was born among people who believed that freedom and prosperity are inseparable, and who were prepared to argue for both when it cost them.
To everyone who stands in that tradition today, from whatever side of politics, I offer one observation drawn from what I see across 38 member countries.
Mainstream parties that respond to a populist surge by adopting its economics do not recover their voters. They lose twice: once to the original, which the electorate will always prefer to the copy, and once to the centre, which has nowhere else left to go.
The evidence for that is now extensive, across Britain, France Germany and other countries around the world, where mainstream parties that borrowed the insurgents' agenda shrank while the insurgents grew.
The parties that have held their ground did so by out-performing the populists, not by imitating them.
Greece under Prime Minister Kyriakos Mitsotakis has a reforming government, which cut taxes, fixed the budget, restored growth above the European average, and in doing so hollowed out populist movements on both the left and the right.
They have achieved consistent budget surpluses, rising employment, falling unemployment, and they are one of the few advanced economies in the world whose public debt as a share of GDP is coming down. It remains high but has been on a descending trajectory. There are not many countries in the world who can say that right now.
In Poland, voters in 2023 turned back towards the mainstream when it offered them a credible economic alternative rather than a softer version of the incumbents.
The lesson is actually quite consistent and when you spell it out, you might think it’s so simple: Deliver homes, lower energy costs, real wage growth and a credible budget, and the populist tide recedes. Mimic the populists, and you simply confirm that they were right all along.
The way to defeat populism is to solve the problems it feeds on.
So let me put it as plainly as I can.
There is no shortcut to a lower cost of living.
There is no populist shortcut, through tariffs, caps and state banks.
There is no interventionist shortcut, through subsidies and regulation and handouts.
A government that tries to re-regulate its way to higher wages, or to subsidise its way to a manufacturing renaissance, is making the same error as the populist, even if cloaked in a more respectable vocabulary.
There is only the long way round: an economy that produces more, competes harder and grows faster than its costs.
It is the only agenda that has ever worked in this country. It is the only agenda that will work again. And anyone offering you a quicker route is offering you a poorer country.
And notice where populism of the left and populism of the right both end up: different grievances, different language, but the same economics. A problem that presents on both flanks of politics can only be solved by rebuilding, in the centre, the consensus for reform that both sides once shared.
Which brings me to the point I most want to leave you with tonight, and to the constraint I promised to come back to.
Structural reform of the kind Australia needs cannot be imposed. I It cannot be smuggled through or brought in through the back door. It has only ever been secured on the basis of a genuine public consensus.
In the 1980s and 1990s that consensus did not appear by accident. It was built, argument by argument, over years, by people inside and outside politics who kept making the case in public until the case was won.
That is the work. It requires a continuous, robust public conversation about what actually lifts living standards and what only appears to. It requires engagement in the battle of ideas, which is exactly what this Centre was founded to do.
There is no other way to build the broad consensus behind the reform effort needed to put Australia on the best possible trajectory: to lift growth, lift incomes, lift living standards, to widen opportunity for everyone, and to put every Australian in a stronger position against cost-of-living pressures that have grown too high.
Two things 1976 did not have to face
Now before I turn to what should be done, let me name two things that make 2026 different from 1976, one a challenge and one an opportunity, and that together make the case for productivity more urgent now than it was then.
First, there is age.
In 1976 Australia was a young country, with a median age of around 28 and more than seven people of working age for every person over 65.
Today the median age is 38, there are fewer than four, and by the 2060s there will be fewer than three for every person over 65.
That changes the arithmetic of prosperity.
For fifty years Australia grew its income partly by adding workers. From here, even with a well-run migration program, the share of the population that is of working age will fall whatever we do.
There are only two ways to offset that: a migration program that brings in the skills we need, with the homes, infrastructure and services built to match, and a step change in how much each hour of work produces.
In other words, an ageing country cannot participate its way to higher living standards. It can only produce its way there.
Productivity was the best cost-of-living policy in 1976. In 2026 it is the only one left.
Second, there is artificial intelligence, and I know you had a session on that this afternoon.
Artificial intelligence is the first technology in a generation capable of delivering that step change, and it has arrived at exactly the moment Australia needs it.
But its benefit is not automatic.
The Productivity Commission's estimate is that Australia, on current settings, will capture about half the productivity gain that the leading adopters will. Can we really afford that? Not because the technology is different here, but because the gain depends on how widely it spreads: into small businesses, into hospitals and classrooms and councils, not only into the largest firms.
And that is not something that just happens. Enablement is a policy choice: whether the power and the data centres get built, whether a regulator's first instinct is to permit or to prohibit, and whether a small business in Bunbury can get the skills to use it.
There are risks, and there will be disruption, including in the labour market. Those have to be managed.
But they have to be managed in a way that keeps Australia at the competitive and innovative edge, not one that retreats from it.
Because here is the echo.
In 1976 the instinct was to protect Australian industry from what was coming over the horizon. In 2026 the same instinct is at work, this time against the technology.
And if history teaches anything, it is that protecting yourself from an innovation you are worried about does not stop the innovation. It happens anyway. It happens anyway, somewhere else.
All protection does is widen the gap between the countries pressing ahead and the countries finding reasons not to.
You do not avoid a big wave by paddling to a quieter beach. You learn to surf it.
The only cost-of-living agenda there is
So what should Australia do? Not one thing.
The Productivity Commission is right that no single lever will do it.
But it does have a single, measurable target: productivity growth back to its thirty-year average of 1.6 per cent a year within a decade. That is where the fourteen thousand dollars comes from.
And it has to be delivered the way the last one was: somebody keeping score, and money flowing to the states only when reforms are certified as real, not merely announced.
The agenda runs across the policy spectrum. Every item on it is a cost-of-living measure, because every item on it makes the same hour of work buy more. And in an ageing country, there is no other kind. It looks like this.
When it comes to genuine tax reform, reform to make our tax system more growth friendly, we have a checkered history in this country. Essentially, ever since the Howard Government genuine growth enhancing tax reform has been in the too hard basket.
Reform our tax system to make it more growth friendly.
A more competitive tax system attracts more investment. Letting people keep more of the pay rise they earned rewards extra effort. Both lift productivity.
We need to rebalance the system away from taxes on work and enterprise.
Neither Australia's personal income tax system nor its company tax system is internationally competitive or growth-friendly enough today.
At the OECD we rank taxes by the amount of harm they do to growth. The most harmful tax to growth is company tax. The second most harmful is personal income tax. Yet in Australia, we collect about double the share of revenue from company tax than the average OECD economy and we collect 62% from company and personal income taxes combined. That is from the most and second most harmful taxes to growth. The comparable average across all other OECD countries is about 35 per cent.
And we collect much less from the much more growth friendly alternative - consumption taxes. In Australia the GST rate is half the OECD average, on barely half the base.
And we have stamp duty, the most damaging tax in the federation.
End the reliance on bracket creep by indexing thresholds, and fund it honestly through a broader consumption base and more efficient taxation of land and property.
None of this is new. The Henry tax Review set it out in 2010: a broader consumption base with legislated compensation for low-income households, stamp duty replaced by land tax, and a lower, more competitive company tax rate. The blueprint has sat on the shelf for fifteen years, under governments of both persuasions. What has been missing is not the analysis. It is the political will to make it happen.
Make company tax internationally competitive, because capital is mobile and the workers who use it are not.
That will help us attract more foreign investment, which will flow through more and better equipment, which makes every hour worked by workers more productive, which will lead to increases in real wages.
Competition and regulation: two to six thousand dollars a household.
Implement the revitalised National Competition Policy with the same discipline as the original, including payments to the states for delivery.
Attack regulatory fragmentation: one national licence for trades and professions, one approvals pathway for major projects, with statutory timeframes.
Treasury and Reserve Bank research suggests restoring competition to its early-2000s intensity could lift GDP by one to three per cent. That is two to six thousand dollars a household, every year.
And recognise trusted overseas standards rather than redesigning them for a market of 27 million that is still, in practice, eight markets. A country this far from its markets cannot afford a second border inside its own federation.
Housing: The only thing that brings rents down is more housing.
Treat housing as a supply problem, because it is. Peter Tulip's work at this Centre helped establish that fact, against considerable resistance, and it is now the conventional wisdom. A right to build medium-density housing near every rail and major bus line in the capitals, approved against a code in thirty days. One national construction code instead of eight. And Commonwealth money that flows for homes completed, not for targets announced.
Auckland did this in 2016. Construction doubled and rents fell in real terms.
Energy: we should have the most affordable, most reliable energy on the planet.
Pursue the lowest-cost, most reliable path to clean energy self-sufficiency, technology-neutral and open to every option, and reform relevant tax and regulatory arrangements to drive price competitiveness.
The fact that we do not have the cheapest energy in the developed world is a policy failure, not a geological one.
In practice that means removing the statutory prohibitions on any technology, buying reliability through one national firming auction rather than ad hoc deals, and putting transmission, storage and gas on the same approvals clock as everything else.
Work:
Restore flexibility to the labour market so that firms and workers can agree arrangements that suit them.
Re-regulation has not raised real wages. Productivity does.
Flexibility within a strong floor: an enterprise agreement approved in weeks rather than months, an award a small employer can actually read and understand in thirty pages rather than three hundred, and a worker who chooses casual or permanent rather than having the choice made for them.
And every change to workplace law, by any government, should be tested independently against the only measures that matter: employment, real wages and productivity.
Spending and fiscal rules:
We should not be posting the bill to our children. Adopt credible, binding fiscal rules so that spending grows more slowly than the economy. The care economy and the National Disability Insurance Scheme (NDIS) are legitimate public goods whose growth trajectories are not sustainable as designed.
Fixing them is not cruelty. Leaving them unfixed is.
A credible rule has a number and a referee. The number: real spending growth held below the growth of the economy until the budget is back in structural surplus. The referee: a Parliamentary Budget Office with a statutory mandate to say publicly, every year, whether the rule has been kept.
Trade:
Stay open, and go further. The Australia-European Union Free Trade Agreement concluded this year should be the start, not the end. Cut the remaining nuisance tariffs unilaterally and pursue every opportunity to diversify markets rather than closing them.
Skills and schools: the wages of 2050 are set in the classrooms of today. Arrest the decline in Australia's Programme for International Student Assessment (PISA) results, which have fallen for two decades.
They fell while real funding per student went up by around 40 per cent. It is a teaching problem, not a funding problem. There are countries across the OECD – Finland the most notable, who spend much less than we do and perform better. The evidence on what works is settled: a universal phonics check in Year 1, which Jennifer Buckingham argued for from this Centre until a Labor government in South Australia adopted it in 2017, with funded intervention for every child behind, explicit instruction and a knowledge-rich curriculum as a condition of Commonwealth money, and tertiary funding that follows completion, not enrolment.
Nothing determines the next fifty years more than whether a child in Logan or Kalgoorlie leaves school able to read, reason and calculate.
Technology: the biggest productivity lever of our lifetime. Make Australia the easiest place in the region to deploy artificial intelligence, through pro-innovation regulation, data access and energy for the data centres already lifting growth.
The productivity dividend from AI will go to the countries that adopt fastest, not to those that regulate first.
So apply the laws Australia already has, through the regulators it already has, rather than building a standalone AI regulator. Treat data centres as national infrastructure with a twelve-month approvals clock. Open government data by default. And get the technology into small businesses, hospitals and classrooms, where the productivity gap is largest.
Migration: matched by the homes we build. Run a skills-led program set by what the economy needs, and build the homes, infrastructure and services to match. Until supply catches up, by all means do not let the intake outrun it, but have a plan to align migration needs with homes and infrastructure build.
Taken together, this is not a radical program. It is the program of 1983 to 2005, updated for a world of AI, ageing and strategic competition. Much of it has been argued for, over many years, by this Centre and by people in this room.
It made Australia one of the richest countries on earth once. There is no reason it cannot do so again.
An echo, and a choice
Is 2026 an echo of 1976?
In one respect, yes. Australia is drifting, living standards are slipping, and the loudest voices offer remedies that would make it worse.
But in another respect, no.
In 2026 we have something 1976 did not: a technology capable of lifting every hour of work, if we have the sense to use it.
In 1976 the reformers had to argue from first principles against a consensus that had never been tested.
In 2026 we argue from evidence. We know what works, because Australia did it, and the results are in the national accounts.
And we also know what doesn’t work.
The question is not whether openness, competition, sound money and enterprise deliver prosperity. They are the cost-of-living policy, and they always have been. And they are how one generation of Australians has always handed a better country to the next.
The question is whether this generation has the courage its predecessors had: the courage to spend political capital on reforms whose benefits arrive after the next election.
Hawke and Keating had it. Walsh and Kelty had it. Howard and Costello had it. And it will take a new generation of leaders, in politics and in rooms like this one, to make the case to the Australian people again.
Because there are no permanent victories in economic policy. Every generation has to win the argument afresh. That is why this Centre was founded, and it is why, fifty years on, it is still needed.
I believe this generation does have that courage.
In that 1981 lecture, Friedman left this Centre one more warning. It is much easier, he said, to avoid going in the wrong direction in the first place than to reverse course once you have gone that way.
Australia has done the hard version once. It took a generation. The tide is running the other way again, and this time we know exactly where it leads.
I watched a wall come down in 1989 that was supposed to stand forever.
Consensus collapses when enough people decide to say what is true.
That is what Neville Kennard backed, and what Greg Lindsay built, and what this room has done for fifty years.
The next fifty depend on doing it again.
Thank you.
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