Emma Dawson
Thursday, 11 September 2025
Emma Dawson
Thursday, 11 September 2025
Acknowledgement and opening
Thank you for that generous introduction. Let me begin by acknowledging the Wurundjeri Woi-Wurrung people of the Kulin Nation, the Traditional Custodians of the land on which we are gathered today. Their sovereignty was never ceded. I pay my respects to Elders past and present, and extend that respect to all First Nations people here with us.
This is my first formal address in my new role, and it’s a real privilege to be doing it here, with Anglicare Australia. This network has always been a vital voice for fairness and for the people too often left out of the national economic debate. I’m grateful for the chance to join you, although my friend Danielle Wood is a hard act to follow!
Why the Focus on Productivity?
Now, I want to start with a question that’s been buzzing around a lot lately: why are we all suddenly focussed on productivity?
As Danielle laid out so clearly, productivity growth is the engine that has lifted living standards for the last two hundred years. When productivity rises, economies grow and societies can become more prosperous. That’s why it’s been such a central focus of economic reform.
The Productivity Commission itself, since its establishment in 1998, has been tasked with measuring productivity, predicting trends, and recommending the regulatory or legislative changes that might improve productivity over time. This it does well. And in recent years, the Commission has expanded its focus – looking at the care economy, at social mobility, at inequality – and doing so with a gender lens. They have acknowledged that the measurements we use for productivity in the market sector may not be suitable for measuring the contributions of care and services – that analysis of the quality of care that Danielle displayed before represents a significant shift in thinking that deserves real credit. Danielle and her team should be applauded for changing the frame of what counts in productivity debates.
But I know there’s concern in parts of civil society, including the social services sector, that “productivity” is the wrong focus: that it masks a deregulatory agenda that could deepen inequality. This is repeated in criticisms by some of the Ezra Klein and Derek Thompson book Abundance and of the Treasurer’s economic reform roundtable itself – often, I would add, by people who have neither read the book nor were at the roundtable!
I think those criticisms miss the point. Identifying the barriers to productivity growth and working out how to remove them is critical work, and that is the work of the Productivity Commission. This is the starting point for an important national conversation about what kind of country we want to be, and what kind of life we want to leave our children. It’s a critical input into a broader process of thinking about how we must reform our economy to ensure it works for all of us; that, as the Prime Minister says, it holds no-one back and leaves no-one behind.
And so the real question – and the one that the people in this room will and must be most engaged in – is: what happens next? Once we lift productivity, how will the gains be distributed? This is what will matter most when it comes to rebuilding opportunity, reducing inequality and tackling poverty and disadvantage: how and where those gains are invested, and to whom go the returns.
Those are questions of fiscal policy. And they are questions that governments – not the Productivity Commission – must answer.
What Needs to Happen for Growth to Lift Living Standards?
Of course, not all growth is equal. Growth that comes at the expense of our natural resources, that depletes the planet, is not sustainable. But I’m not a fan of the idea of “degrowth” – it is profoundly pessimistic and can lead to dangerous games centred on the idea of “zero-sum” distribution: that is, in order for some of us to win, others of us must lose.
It also misunderstands the nature and complexity of inputs to growth: yes, many of our planetary and ecological resources are finite, but there is no limit to human ingenuity, to innovation and creativity. And if we want to talk about abundance, then Australia’s supply of sun and wind – the bedrocks of renewable energy that will power the post-carbon economy – is vastly greater than we will need once we have fully implemented the technologies to harness them.
So growth can be plentiful, but it must be shared. Growth that is hoarded by a few while inequality worsens will not lift living standards for most Australians. In fact, poverty and inequality will likely grow if we leave the question of distribution entirely to the market.
We need governments to intervene – to ensure that growth is properly distributed, not just because it is fair and right, but because when we invest the fruits of our prosperity into the most productive and socially beneficial parts of our economy, we create further and more sustainable growth: that’s where better living standards come from.
Take housing as an example. Left unchecked, the market has delivered us skyrocketing house prices, declining affordability, and widening generational divides. Left to market forces without government intervention, we will simply see more high-end apartments for downsizers – that’s where the profits are in our cities now. Every housing expert unencumbered by a free-market ideology will tell you that having a decent chunk of non-market – non-profit and public – housing is the only way to ensure shelter is a human right and also to ensure that market prices do not accelerate beyond the means of the majority of households. Land does not grow. We can’t make more of it. So we must manage its distribution.
But even when products and services can and do grow, the market will follow the money. Look at consumer services in the United States, where deregulation and concentration have left people with higher costs and fewer protections. Where services that were once targeted at a broad and thriving middle class are increasingly rejigged to appeal to wealthy consumers.
The New York Times last week published a story about a working class woman taking her grandchildren to Disneyworld as her parents had done for her as a child in the 1960s, and as she had done for her own children in the 1990s. She can no longer afford to stay in her favourite hotel on site – it is now priced out of the reach of ordinary people and offers restaurant packages for over a thousand dollars a head. And as she and her grandkids waited up to three hours in the hot sun for each ride, the wealthy were able to pay to “skip the queue”.
Abigail Disney, one of the world’s most socially aware billionaires, responded to this story to say that this was not what her father and uncle had intended: that Disneyland was meant to be for all American families. But the market has recognised that, with the decline of the American middle class, its profits are now to be found among the much smaller class of millionaires that the country’s economic system has scraped off the top of the old middle class over recent decades, while sending others whose childhoods were relatively prosperous into economic insecurity and penury. Where it takes two years to save for a family trip to Disneyland, which is then a massive disappointment compared to what was experienced just a generation ago.
When we let the market rip, it is the most vulnerable who pay most, and our entire society suffers as inequality rises. While poverty in a wealthy country such as ours is indefensible, the evidence shows that it is inequality that destroys trust in democracy. And we are experiencing higher levels of inequality in the developed world than at any time since the second world war.
History shows that high levels of economic inequality cannot be sustained in democratic systems. People simply will not stand for it. We can reform our economies to restore opportunity and reduce inequality, or we can wait for what history tells us will be a revolt – typically a violent and destructive one. We are seeing this play out in the US and parts of Europe at the moment and, while we are fortunate not to be as far down that track, we must not be complacent.
History also shows that periods of rapid productivity growth have brought broad prosperity – but only when supported by strong social policies. Think of the legislative interventions in the first industrial revolution, which ensured that children as young as five could no longer be sent to work in coal mines and cotton mills, and which regulated the length of the working day.
Or of the post-war decades, when governments invested in public housing, in education, in health and in creating new industries to spread the wealth and opportunities that came from the massive growth afforded by the necessary reconstruction of our nation.
Or Australia’s approach in the 1980s, when economic globalisation and deregulation swept the world. While we took advantage of the extraordinary growth enabled by these changes, we did not sacrifice entire working-class communities as was done in the UK under Thatcherism or the US under Reaganism. Even as the share of our national prosperity going directly to wages declined during these years, the social wage approach of the Australian Labor Government ensured that working households received their fair share through the provision of universal health care and superannuation, as well as increases in welfare and family payments.
Contrast that with the 1990s and 2000s, when a purely supply-side economic agenda squandered the windfall gains of the Australian mining boom, cutting taxes and reducing spending, and inequality began to surge as more of the benefits of growth were funnelled to business profits and the wealthiest households.
Now, despite our relatively egalitarian society when compared to the US and parts of Europe, in Australia, as Danielle showed, poverty rates have been stubborn over the last 30 years. There is no excuse for a country as wealthy as ours to have between 10 and 15 per cent of people living in poverty.
While the available data limits our ability to make accurate comparisons with the past, when the Henderson Inquiry into poverty began its work over 50 years ago, its initial survey determined that around one in 16 people in Melbourne lived in poverty – that’s 6.25 per cent. So even if that data is not directly comparable to the HILDA survey we use today, it’s pretty clear that poverty rates are at least double in the neoliberal era as they were under the social democratic, full employment policies of the post-war decades.
Of course, because of cheap consumer goods and clothing, universal sewerage and electricity, and modern communications, the experience of poverty in the developed world is more comfortable in 2025 than it was in 1965. But relative poverty remains, and relative poverty matters. Because it’s not just about how much people have in absolute terms – it’s about how they compare to those around them. We don’t instinctively compare our living standards to those of our great-grandparents: we compare them to our peers, our neighbours, our contemporaries. And so we should, if we are to believe that we have all benefitted from decades of economic growth.
As I said, it’s inequality – of wealth, of opportunity, of power – that eats away at social trust, that undermines democracy, that corrodes the bonds that hold us together.
Measuring What Matters
This is why I think the Commission’s recent work on measuring the care economy is so important. It acknowledges that productivity isn’t just widgets and factories. It’s about services, and the quality of those services.
We have to be honest: much of our growth has rested on the unpaid and unrecognised labour of women and carers. For too long, the economy has assumed that this work is “social” rather than “productive.” That those of us working in care and services should accept fewer improvements in living standards than those “creating jobs” in other sectors.
That is unsustainable, especially as the labour market itself is shifting, with most households of working age now relying on two income earners. Younger workers want flexibility. Families want balance. There’s growing support for shorter working weeks – not just as a lifestyle perk, but as a necessary adaptation to the way work and care intersect.
The campaign for a four-day week has been gathering momentum, here and overseas. And of course, history tells us that reductions in working hours have always come as economies grow and societies demand a fairer share of prosperity. We once fought for an eight-hour day. Later, for a five-day week. Why should that progress stop?
The recent political debate about working from home indicates that it won’t – women and a growing number of men will demand shorter working hours as the reasonable return on productivity gains that will enable them to both fulfil their potential in the labour market and ensure that domestic labour is more equally shared.
Generational Inequality Masks the Real Problem: A Growing Class Divide
Now, while I’m not so naïve as to expect a lot of easy consensus in this reform process, there was one thing on which all roundtable participants apparently agreed: that our current economic system is perpetuating, in the words of Ken Henry, an “act of intergenerational bastardry”.
We can all agree there is a lot of intergenerational tension in this debate, and there are clear differences in the way Australians of different ages experience the economy at present. But let’s unpack this idea.
As Danielle showed, many Millennials are now earning more than their parents did at the same age. Many will inherit vast sums of wealth. That wealth will not close divides – it will entrench them. Because what looks now like generational inequality is actually growing class inequality. As that wealth is passed down, it will deepen and entrench a class divide in a country that likes to pretend it doesn’t have one.
And let me say this clearly: Boomers are not to blame. There are many Boomers who are not wealthy: indeed, a third of single women aged over 65 in Australia live in permanent income poverty, largely because they don’t own a home and have no super. But even those Boomers who have done well – yes, even those who are hobby landlords – are not at fault. They did what the system told them to do: work hard, buy a home, build assets. And it worked.
The problem is that younger generations have done what they were told to do – get educated, get a job, work hard – and it no longer works. They can’t afford to start building assets, largely because we have allowed a rampant, unchecked market to inflate the cost of the most important asset – land – beyond the reach of anyone without inherited wealth.
That is the very definition of a class-bound society.
Incidentally, when the Capital Gains Tax discount was introduced in 1999 – and you saw from Danielle’s slide earlier that this is when house prices began accelerating so fast compared to wage growth – no-one mentioned housing. John Ralph, who led the review of business taxation for Peter Costello that proposed the CGT discount, said it would turn Australia into a “nation of shareholders and entrepreneurs”. If only. That would have been a great boon to productivity growth. Instead, those tax changes created a landed gentry.
So why are we seeing this inequality play out as a generational divide? Not because Boomers are inherently selfish, but because we dismantled the social infrastructure that underpinned the opportunity and social mobility they enjoyed and which helped them build assets and security. It’s not the choices people of different generations make – such as eating too much avocado toast – that leads to their different fortunes; it’s the choices they have been offered by very different economic systems.
In the post-war decades, social democratic governments built homes, expanded universities, created TAFE and guaranteed full employment. They massively expanded the welfare state and built more public schools. They built infrastructure, such as the Snowy Hydro, and ensured all homes were connected to essential services. They played an active, interventionist role in the market to ensure it delivered for citizens.
From the 1990s onwards, we bought into the Reaganite/Thatcherite idea that government should get right out of the way and let the market not just drive growth, but dictate its distribution. In doing so, we removed the essential social and economic supports that allowed people to build a good life through their own effort and hard work.
The resulting divide, eventually and as always, will not be between generations but between classes: between those born to families with assets and those without, between those who have the social and economic capital to navigate an increasingly unequal economic system, and those locked out.
As a character in a recent UK drama about the rise of Thatcherism and its focus on growing aggregate wealth at the explicit expense of equality put it: “We used to have communities; now we have stuff.”
People will not continue to support a system that denies them opportunity, agency, and security. That’s why we are seeing growing distrust in democracy. It’s why we are seeing the rise of authoritarian movements, here and around the world. History shows us this pattern, over and over again.
What Happens Next?
So where do we go from here?
First, I’d encourage you all to engage with the Productivity Commission’s processes as it finalises its advice to government. It’s important that the voices of social services, of communities, of people at the margins, are heard. Submissions close next week so make sure you have your say!
But more importantly, we need to support governments to act. We need fiscal reform. That means taxing hoarded wealth. It means investing in human and social capital. It means diversifying our economy and making sure we get fair returns on the next generation of resource wealth in a post-carbon world.
Distribution is critical, but let me sound a note of caution: don’t fall for seemingly utopian ideas such as a Universal Basic Income. As Danielle’s research has shown, welfare dependence can entrench intergenerational poverty. Not everyone can be, or wants to be, an artist or an entrepreneur. It remains true that, in a market economy such as the one in which we live, the best redistributive tool we have is a job.
Of course, not everyone can work for money in the market – some people are physically or mentally unable to, others have caring responsibilities or are locked out due to compounding and intersectional disadvantage or marginalisation. For them, we need much more than a threadbare safety net. We must see a real increase to income supports as a result of this economic reform process, but distribution is not just about cash payments and welfare.
In fact, universal services – in health, education, social care, housing – are the best way to guarantee dignity and opportunity for all and to most efficiently and effectively redistribute our common wealth.
Productivity growth can give us the resources to ensure no one is held back – that we create a dynamic, sustainable, innovative economy in which people can thrive and fulfil their greatest potential.
But unless we pay attention to distribution – unless we rebuild the social infrastructure that underpins opportunity and social mobility – too many Australians will continue to be left behind.
That is the challenge before us. And it’s a challenge we cannot afford to duck.
Thank you.
