After generations of improvement, our living standards will be stuck in the present – or go backwards – without major economic reform.
The living standards of Australians in 2026 are "as good as it gets" unless the country can improve productivity, the boss of one of the nation's biggest banks has warned.
Speaking to the Australian Financial Review's Chanticleer column, NAB chief executive Andrew Irvine said the Reserve Bank had no choice but to raise interest rates earlier this month, because a lack of productivity growth has put the handbrake on the national economy.
"The fact is, without productivity, Australia simply can't grow any faster than it is today," he told the publication.
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"So how we're living now in 2026 is, frankly, as good as it gets, unless we lift productivity.
"This is peak Australia."
The nation's lagging productivity growth – an issue faced by most developed economies with the exception of the United States – has been highlighted as a key concern by scores of economists.
Last year, federal Treasurer Jim Chalmers held a three-day roundtable to canvas ideas to address the issue, and came out of the summit highlighting eight priority areas, including a widely supported road-user tax, where action would be taken quickly.
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The government also appears to be gearing up to hand down a significant, reform-filled federal budget, which may include changes to the contentious capital gains tax discount for property investors.
Chalmers has said the May 12 budget will include both productivity and savings measures.
Economic thinktank the e61 Institute today added its voice to the chorus calling for reform, releasing a new report which stated the tax system can't support current spending levels, and must be improved.
"There is no imminent debt crisis, but with renewed pressures ahead – like an ageing population and slow productivity growth – Australia's fiscal options are narrowing," chief executive Michael Brennan said.
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"With the tax system as it currently stands, we will be asking workers to pay a larger share of their income to fund a fiscal gap that has been building for two decades – and that's before any new spending commitments are added to the ledger," he added.
"Without tax reform, spending restraint will be needed to avoid burdening future generations with a fragile, inequitable and inefficient Australian economy."
In his comments to the AFR, Irvine said the upcoming budget was crucial, pinpointing housing and construction, energy prices, and private spending as particular areas to focus on.
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"The May budget is key, and the treasurer has indicated that we should have high expectations for that budget from a productivity perspective," he said.
"We're looking forward to hearing what he has to say."
Irvine's remarks were delivered on the same day NAB posted its first-quarter profit for the 2025-26 financial year.
Net profit was up 30 per cent year-on-year to $2.2 billion, which was welcomed by investors; the bank's share price rose some 4 per cent yesterday following the results announcement to reach a record high just north of $47.
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