Painful reforms needed by Australia - economist
Updated at 8:30 am on 4 June 2013
Professor Ross Garnaut, one of the most influential economists in Australia, has warned of a painful reckoning for the lucky country unless it undertakes painful reforms.
When Professor Garnaut talks about the economy, people generally listen.
Radio New Zealand's Sydney correspondent says Professor Garnaut was a key player in the floating of the Australian dollar 30 years ago, he predicted the ascendancy of North Asia and was a policy advisor to Bob Hawke's reforming government.
Now he says the Australian miracle as at risk because of an over-reliance on the resource sector, an over-valued exchange rate and a refusal by business and consumer groups to accept reform to boost productivity.
Essentially, Professor Garnaut is saying Australians have had it too good for too long. And with the mining boom ending, a painful adjustment is in store.
The problem is, says Radio New Zealand's Sydney correspondent, no side of politics looks willing to tell people the truth.
Australia is heading toward a federal election in September which looks likely to result in a change of government. Yet no side of politics wants to talk policy prescriptions because they inevitably involve pain.
The Coalition is reluctant to say what it will do in office. There have been hints of big cuts to public spending, but little detail. The coalition has floated the idea of an increase in the GST, but no action is expected in its first term.
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