A simple projection of current trends is that in ten years Australia’s population will reach 26.3 million, GDP in nominal dollars will be just short of $2.5 trillion (and in today’s dollars a round $1.8 trillion), and GDP per head in today’s dollars will be $68,400 compared to $59,000 now. There will be 13.34 million employees. Nominal net wealth will have increased by three quarters to $14 trillion – on average, half a million dollars each.
In this projection the apparently inexorable growth of net foreign liabilities as a share of GDP over the last thirty years stabilises around the current ratio of 60 per cent of GDP. Over the decade Australian average living standards will probably have improved a little against those of Americans or Europeans or Japanese, though not against those of Chinese, Indians or Brazilians.
These outcomes are well within reach. An unremarked but startling fact about Australia today is that the economy is in many respects performing rather better than it has for a half a century. To attain the outcomes described above we need GDP to increase on average by 3 per cent a year, the workforce by 1.5 per cent a year, and labour productivity by 1.5 per cent a year. Each of these outcomes is less than the average annual increase over the last two decades. With the exception of productivity, which has averaged 1.3 per cent over the last decade, these average outcomes are also below the average outcomes for the last decade.