Australia’s economic problems have been brewing for years

The stagnant private sector economy and deterioration in living standards exposed in the national accounts this week have been years in the making.

Labour productivity has failed to improve since 2016; business investment is languishing close to 1990s recession levels; there has been no serious economic reform; undisciplined government spending is in vogue after too much stimulus during the pandemic; and the Reserve Bank of Australia has been forced to push up interest rates to grind household and business activity to a halt and bring inflation under control.